Flex Pack Service & Supplies Pty Ltd & Mark Brown v Omicron Automation Pty Ltd

IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE

Case No. N11714464

Flex Pack Service & Supplies Pty Ltd

and

Mark William Brown

First Plaintiff

Second Plaintiff

Omicron Automation Pty Ltd

Defendant

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MAGISTRATE:	Robinson
WHERE HELD:	Melbourne Magistrates’ Court
DATE OF HEARING:	24 to 27 July 2023
DATE OF DECISION:	31 October 2023
CASE MAY BE CITED AS:	Flex Pack Service & Supplies Pty Ltd & Mark Brown v Omicron Automation Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VMC 14

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CONTRACT – Construction of terms – Implied terms – Entitlement to Commission – Claim and Counterclaim dismissed.

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APPEARANCES:	COUNSEL	SOLICITORS
For the Plaintiff	Mr P Lithgow	Tucker Partners
For the Defendant	Ms O Callahan	Davis Moloney

HIS HONOUR:

Introduction

This case relates to the unravelling of a commercial relationship between Mr Mark Brown and Mr James Schneider. Mr Brown is the director of Flex Pack Service & Supplies Pty Ltd (“Flex Pack” and, together with Mr Brown, “the Plaintiffs”) and Mr Schneider is a director of Omicron Automation Pty Ltd (“Omicron”).
Mr Brown has operated Flex Pack for most of his career. He is now nearing retirement. Flex Pack supplies machines used to fill containers. Mr Schneider’s company, Omicron Automation, of which he is the founding director, manufactures machines which, as the name suggests, “automatically” do work that would otherwise be done manually. Flex Pack’s work seems to be a subset of this.
With an eye to transitioning to retirement and selling Flex Pack, Mr Brown approached Mr Schneider with a view to working jointly on selling and manufacturing Flex Pack’s machines. Mr Brown hoped that Mr Schneider – who had worked for Flex Pack, leaving in around 2010 – would eventually buy him out.
This led to the parties executing an agreement in April 2021 which provided that Mr Brown (or Flex Pack) would be paid commission in respect of sales generated by or attributable to him, which Omicron would fulfil. The dispute centres on what the parties agreed would be required for commission to be earned and at what rate it would be paid. Mr Brown claims that he is owed $94,971.25 in unpaid commission.
A further issue has arisen relating to “additional design work” that was needed to be done by Omicron to complete the “projects” brought to it by Mr Brown. In this respect, Omicron counterclaims against Flex Pack the sum of $38,016. Although it was not explained clearly, I take it that “projects” relate to the use of more than one machine working together, or the modification of a machine to suit a particular role. The agreement itself refers to both “product(s),” and commission being based on a “Per Project basis”.

Summary of Evidence

Sales Agent Commission and Consulting Agreement

On 13 April 2021 Mr Brown and Mr Schneider signed the Sales Agent Commission and Consulting Agreement (the “April agreement”).[1] It described Mr Brown as the agent and Omicron as the principal. Flex Pack was not mentioned in the agreement other than in Mr Brown’s email address.
[1] Plaintiff’s CB at 90-93.
Under the heading “Undertaking,” the April agreement contained:
·Clause II: “Whereas the Agent is prepared to sell the Products on behalf of the Principal in return for a Commission;” and
·Clause III: “If the Principal engages the Agent on a Consulting basis, the Principal agrees to pay the Agent on an agreed hourly basis, a fixed fee of retainer.”
Under the section headed “It is agreed as follows”:
·clause 1(C) says “It is understood that the Agent will represent the Principal by getting customers, and the Customer dealings will be with the Principal by way of invoicing, correspondence, payments, warranties, etc”; and
·paragraph 2 of the April agreement provides that “the Agent can set the Prices on Product(s) but the Principal will have final confirmation.”
There is no further elaboration of what was required by Mr Brown to earn the Commission. However, as will become clear later, I think the term about the setting of price is of significance.
After making the agreement, the parties undertook a number of projects in accordance with the April agreement and, specifically, with commission determined at different rates for each project. In July, however, the parties met to discuss their future arrangements. Mr Brown says that there was agreement at the meeting to discard the “per project” approach and proceed with commission to be fixed at 12.5%. The Defendant denies this.

The July Meeting

This difference of recollections represents the main dispute between the parties. There were five people at the July meeting: Mr Brown, his daughter Lisa, Mr Alex Sy (Mr Brown’s business consultant), and Mr Schneider and Mr Thorne (who had recently joined Omicron).
Mr Brown’s evidence was that, after discussing the matter with his accountant, he was seeking to “simplify” the business arrangement with Omicron. Specifically, they considered that a fixed rate of commission of 12.5% for all future work done by him as an agent would facilitate this. He said that he sought this at the meeting and it was agreed by all parties.
Lisa Brown assists in the running of Flex Pack. She said that she was aware that Mr Brown had received advice from an accountant that it would be “simpler” to have one set rate of commission. Quite contrary to the witnesses for Omicron, Ms Brown said that, at the meeting, “they” (who could only be Mr Schneider and Mr Thorne) were also attracted to a single rate of commission since they could build this into their costs. Ms Brown recalled that her father was seeking the rate to be set at 15%, but that the parties compromised at 12.5%.
Mr Alex Sy is a “business consultant” to Flex Pack and Mr Brown. He prepared both the April agreement and the agenda for the July meeting. He also took notes of the meeting. These were written on the agenda during the meeting. Under payment terms at item C of the agenda is “Commission Payment to Flex Pack.”[2] The annotation next to that item says “status quo at 12.5 comm.”[3] Mr Sy recounted that commission was previously on a “per project” basis but “understood” that it was agreed to be 12.5% following the July meeting. However, he could not recall any specific statements made about this. His general recollection was that most of the meeting was devoted to discussing “operational issues.”
[2] Plaintiff’s CB at 98.
[3] Ibid.
Unlike the evidence of the Browns, Mr Sy’s evidence clearly does not go so far as to be a positive recollection of any agreement being made in respect of commission. But I do accept that the agenda item devoted to commission, and the contemporaneous note he made during the meeting, show that the issue of the rate of commission was raised at the meeting and that this included reference to the status quo (ie, the per project basis) and Mr Brown’s preferred set single rate of 12.5%. Further, Mr Sy’s “understanding” that the rate was agreed at 12.5% does provide some partial corroboration of Mr and Ms Brown’s evidence. Certainly, he had no recollection of there being any refusal on Omicron’s part to agree to 12.5%.
In his evidence in chief, Mr Schneider said that the usual practice of the parties had been that the commission rate was nominated by Mr Brown and that he (Mr Brown) would seek to achieve a 50/50 profit split, based on what the machines would likely cost to build and what the customer would pay. I do not recall this being put to Mr Brown, but I do not think much turns on it in any event. Mr Schneider agreed that commission was discussed at the July meeting, but could not recall any agreement on a specific rate. Mr Schneider said a set rate of 12.5% could, in some cases, be “unfair” for Omicron.
Mr Schneider also spoke of his growing frustration with Mr Brown. In particular, the projects often involved Omicron needing to do substantial re-design of Flex Pack’s machines to be “specced” for the particular project. Also, Omicron would need to prepare the Operator’s Manual and system schematics which, again, was a lot of work. Further, Mr Schneider said that Mr Brown was often unreliable in providing parts to Omicron that were needed to complete various projects, leading to frustrated customers and Mr Schneider and Mr Thorne wasting their time by having to change their production schedule. Mr Schneider’s concerns were documented on 30 June 2021 in a draft email that he sent to Mr Thorne. Mr Schneider and Mr Thorne later agreed not to send the email since it may have been “too confrontational”.[4]
[4] Defendant’s CB at 199.
Mr Schneider was also critical of Mr Brown’s seeking commission for projects where he did little more than introduce clients, leaving Omicron to do all the other work. For example, in the “Diversey project,” Mr Brown made no contribution to the three proposals sent to Diversey and attended only one introductory meeting, arriving late at that.
Mr Schneider was, at times, a difficult witness. For example, when counsel for Flex Pack suggested that Mr Schneider viewed Flex Pack and Mr Brown interchangeably, Mr Schneider did not wish to agree to this. However, counsel then pointed to numerous instances where Mr Schneider had appeared to do just that. In my opinion, this reluctance to agree was likely explained by Mr Schneider having an eye focused on Omicron’s pleaded case that Flex Pack was not a party to the April agreement.
On other occasions, Mr Schneider was reluctant to agree that particular invoices (sent by Mr Brown following the July meeting) nominated the percentage as 12.5%.[5] When asked why Omicron paid invoices with commission set at 12.5%, Mr Schneider said it was the “path of least resistance”. However, Mr Schneider did agree that his own annotations on a “Final Draft Proposal” for Omicron to take control of Flex Pack’s intellectual property, and for Mr Brown to become a sales agent for Omicron, recorded that Omicron would agree to pay 12.5% of the total sale price of “any contract won not utilising Flex Pack’s IP but has been brought to Omicron by FP”.[6] Otherwise, Mr Schneider would not accept that most of the post-July meeting agreements contained 12.5% commission for Flex Pack and, moreover, that this was because that was what was agreed at the July meeting. However, no other reason was given by Mr Schneider to explain this “bizarre and exact coincidence” (to adopt the words of counsel for the Plaintiffs).
[5] Plaintiff’s CB at 100-102: Tax Invoices 4956, 4976 and 4977.
[6] Defendant’s CB at 123.
The final person in attendance at the July meeting was Mr Ben Thorne. As noted above, he is also a director of Omicron and Mr Schneider’s business partner. By the time he commenced working for Omicron the April agreement was already on foot. He did a lot of the work updating the Flex Pack mechanical drawings into more modern computer formats, including making them 3-dimensional, and other work such as user manuals, schematics and other documents.
Consistently with Mr Schneider’s evidence, Mr Thorne said that Mr Brown’s commission was not so much a percentage but more of a profit share, whereby they would look at the expected profit for a given project and then determine an amount which was then expressed as a percentage. In cross-examination, Mr Thorne conceded that there was no written documenting of this profit-sharing arrangement. Further, having explained that he and Mr Schneider prepared spreadsheets which set out expected revenue and costs so that Mr Brown’s commission could be determined as a share of profit, Mr Thorne struggled to explain how the profit share (and commission) was determined in cases where no spreadsheet had been prepared, but a percentage commission had been set. At other times, Mr Thorne sought to move away from the word “commission” altogether, instead saying that Mr Brown was entitled to “compensation.”
Mr Thorne said that he was unable to recall any specific discussion of commission at the July meeting but agreed that figures had been “thrown around.” He said that the first time he saw a commission rate of 12.5% was when he received an invoice in November 2021 for the ECS project.

Consideration

Omicron submitted that Mr Brown was “not a credible witness” and was “evasive and vague in his answers.” I do not agree with that characterisation. There was nothing about his evidence that led me to conclude that he was anything other than an honest witness. In fact, under cross-examination he appeared to me to concede matters readily which did not, on their face, appear to assist his case. For example, Mr Brown conceded that, at the July meeting itself, he signed two project agreements which had the commission rate set at 15% and 21% respectively.
Omicron was similarly critical of Lisa Brown. However, if anything, it was my observation that, as between the parties, it was Omicron’s own witnesses who, in some instances, sought to tailor their evidence to support its case. Similarly, I found the Omicron witnesses were more unwilling to accept basic propositions or make concessions when they considered that to do so would be detrimental to its case.
The proposed change to a set commission was a more important issue for Mr Brown than for Mr Schneider and Mr Thorne. In the leadup to the July meeting, Mr Schneider and Mr Thorne’s concerns were much more heavily focused on the frustrations that Mr Schneider documented in his draft email of 30 June 2021. Although clearly the amount of commission that was paid to Flex Pack was not unimportant, since it would impact on Omicron’s profit from particular projects, nowhere did Mr Schneider raise any concerns about the rate of commission in his draft grievance letter. His focus was on the reliability of Mr Brown and the “completely avoidable internal delays” and Omicron’s “wearing these costs and the burden of the problems they’re creating.”[7]
[7] Defendants’ CB at 199: “Reliability Issues” draft letter of 30 June 2023.
Whereas, clearly the commission to be earned by Mr Brown was of the utmost importance to him and his daughter. It was Mr Brown’s intention that it would become his only, or at least, major source of income. Given his stronger focus on the issue, I consider that his and his daughter’s memory of discussions about it are likely to be more reliable than Mr Schneider and Mr Brown’s. His, and his daughter’s evidence, to the effect that he sought commission at 12.5% is supported by Mr Sy’s agenda and the handwritten notes on it. Ms Brown had more a specific recollection of the discussions, recalling negotiation about the rate and eventual compromise at 12.5%.
Omicron submitted that I should draw an adverse inference against Flex Pack for its failure to call Mr Ash Jindal, the accountant who advised Mr Brown to seek a fixed rate of commission. I decline to draw such an inference. Mr Jindal was not at the July meeting. Omicron does not say specifically what evidence Mr Jindal would have been expected to give that would be relevant to the case – only that he would “not have assisted the Plaintiff’s case”.[8] The only evidence that Mr Jindal would support would be in respect of his advice to Mr Brown to seek a fixed rate of commission. In itself, that is not a controversial issue – even the Omicron witnesses do not deny that Mr Brown sought a single rate of commission set at 12.5%. Their case is that they did not agree to it. If Mr Jindal had been called only to corroborate that evidence, I would have considered that somewhat wasteful of time.
[8] Defendant’s submissions dated 4 August 2023 at [12].
Had Mr Jindal been at the July meeting (and Omicron accepts he was not), the analysis would probably be different. He could then have been asked whether the parties discussed and agreed on 12.5% as a fixed rate. In any event, the Jones v Dunkel issue was not pursued at trial, or at least with any vigour that I can recall, such that the Plaintiffs ought to have explained his absence. For all these reasons, I draw no adverse inference in respect of Flex Pack not calling Mr Jindal to give evidence.
There is one final piece of evidence that I think assists in deciding whether the parties agreed to a fixed rate of commission. Omicron submitted that, since there were no “Project Commission Contracts” for the A&I Coatings and Diversey projects, “there is no remedy available to the Plaintiffs, because the Plaintiffs did not plead an entitlement to reasonable payment for services rendered on the basis of Quantum Meruit …”.[9] In light of my findings in respect of commission below, the issue of quantum meruit does not arise. Moreover, the plaintiffs did not seek it. However, the lack of specific “Project Commission Contracts” having been executed by the parties is, in my opinion, nonetheless relevant. By varying the April agreement to remove the “per project basis” and establishing a set rate of commission, the April agreement thereafter operated without the need for the Agent to “present to the Principal by way of an Agreement.” The very absence of “Project Commission Contracts” supports the analysis that the July meeting variation did away with the need to execute such agreements on a “per project basis.”
[9] Defendant’s submissions dated 4 August 2023 at [20].
Weighing all the above, I accept that commission was discussed at the meeting and, to the extent that their evidence differs, I prefer the evidence of Mr and Ms Brown to that of the Omicron witnesses. Further, I consider that their evidence is supported, to a degree, by the agenda and Mr Sy’s note and the subsequent lack of specific project contracts. On the balance of probabilities, I find that the parties varied the April agreement to set the commission rate at 12.5% instead of the existing “per project” approach.

Was Commission Earned and Omicron’s Counterclaim

Whether Flex Pack was entitled to commission, and Omicron’s entitlement to be paid for “additional design work,” both involve construction of the relatively brief April agreement. Essentially, both sides seek to rely on terms of the agreement which, at least on its face, do not exist. In short, Mr Brown says that he is entitled to commission for facilitating introductions which led to sales, while Omicron says it is entitled to payment for “additional design work.” It is not easy to find support for either contention in the April agreement.
The differences are perhaps best illustrated in their own words. In correspondence with Mr Sy who, at the time was attempting to broker the sale of Flex Pack to Omicron, Mr Brown wrote:
Whether I have been directly or indirectly involved with the negotiations, final proposals, and winnings these clients, James needs to understand that these were my existing clients being introduced or referred to Omicron. I have a good relationship with these clients which helped secure the jobs for Omicron.[10]
[10] Plaintiffs’ CB at 53.
This was in response to Mr Schneider’s email in January 2022 where he said:
Moreover, the rate for a “sales commission” compensates a party for fulfilling all the duties around brokering a sale, not partial efforts in assisting with a sale. Getting a call from Mark to say “this guy is keen on a 410, better get in touch,” certainly does not entitle him to a full sales commission.[11]
[11] Ibid at 50.
The task is not to assess the parties’ respective beliefs and assertions about what each other’s role was to be under the terms of the April agreement. The task is to construe the meaning, objectively, of the written terms executed by them.
As Mason J observed in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 at [24]:
We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.

In Wilton v Farnworth[1948] HCA 20, Latham CJ said at [2]:
In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. Any weakening of these principles would make chaos of every-day business transactions.
Accordingly, whilst they assist in understanding their differences, neither Mr Brown’s nor Mr Schneider’s subjective beliefs are relevant in determining the meaning of the written terms of the April agreement.

Omicron’s Counterclaim – Additional Work Expected of Mr Brown

To the extent that the April agreement seeks to set out what the respective roles of the parties were to be, it draws a distinction between “sales” and “getting customers” on the one hand, and “consulting” (by Mr Brown) on the other. In respect of consulting work, it was to be compensated by way of an hourly rate or some other fee, compared to a commission for “sales” and “getting customers.”
Without reference to any written term, in his evidence Mr Schneider asserted that, in order to earn commission, Mr Brown was expected to secure sales, and this extended beyond simply introducing customers. As noted above, it was a feature of Mr Schneider’s evidence more generally that he was frustrated by the “additional” amount of work that Omicron had to do in projects introduced by Mr Brown. This included re-design of Flex Pack’s machines, preparing schematics, producing 3D drawings, and writing user manuals. For example, Mr Schneider recalled that, before the Diversey project was secured, there was a lot of “design” work (which Mr Brown did not do) required to get Diversey to the point of agreeing to proceed.
Notably, however, there is no mention in the April agreement of the Agent being required to undertake any such work. The obligation of the Agent is merely to “sell” and “represent the Principal by getting customers.” To the extent that any further work is mentioned, it is made clear that Omicron will handle “invoicing, correspondence, payments, warranties etc”, while it is noted that “consulting work” undertaken by Mr Brown would be paid for on an hourly basis as opposed to a commission basis.
As noted above, the April agreement distinguishes between “sales” and “consulting work” and also distinguishes between “getting customers” and “customer dealings … by way of invoicing, correspondence, warranties, payments, warranties, etc”. It is not a simple task to determine whether the type of work described by Mr Schneider that Mr Brown did not do, such as design, drawings and re-doing “proposals,” would fall under the umbrella of consulting work or “getting customers.” It could well be either. More probably, however, it is neither. It seems to me to be something that the April agreement did not provide for.
Arguably, customers could not be “got” unless they knew what they were buying, and this would presumably involve some “design” work to achieve. To “sell” to customers, therefore, Mr Brown would need to complete such tasks in order to achieve a sale. But what, then, is envisaged by “consulting work”? As far as I could tell, no party suggested that it was ever intended for Mr Brown to be involved in the production and installation of the products. Presumably, at least some products could be bought “off the shelf.” Whereas, a “project” presumably involved more complicated work – whether modifying a single product, or combining a number of products, to suit a customer’s particular needs.
In any event, in my opinion the counterclaim must fail. Omicron submitted that its counterclaim “comprises two parts: works done to improve the Plaintiff’s engineering drawings, and additional works performed by the Defendant to complete the projects.” At paragraph 8 of its Defence, Omicron sets out numerous specific roles which it alleged Mr Brown was required to perform under the April agreement. Acknowledging that these terms do not appear in the April agreement, Omicron said that they were either oral terms or to be implied. Whilst such clarity and enunciation would have been helpful if these alleged terms had been included in the April agreement itself, I agree with the Plaintiffs that the grounds for implying such terms have not been established. In a significant departure from its pleaded case, however, Omicron submitted that the “contractual basis for the Defendant charging the Plaintiffs to upgrade the plans and specifications is established by emails between the parties from 22 July 2021 until 27 January 2022.”[12] I do not accept that these emails, all written after the April agreement was made, serve to establish the contractual basis of anything under the agreement.
[12] Defendant’s submissions dated 15 August 2023 at [18].
Ultimately, I am unable to find anything in the April agreements which would require Mr Brown to improve engineering drawings or perform “additional work” to complete projects. I do not consider that Omicron has established that Mr Brown was responsible for this work under the April agreement. Moreover, I do not recall any evidence given at trial that would support a finding that Mr Brown had agreed orally to such terms.
The alleged oral agreements, or email “contractual basis” terms, or the implication of such terms appear to amount to no more than wishful thinking on Mr Schneider’s part as to what he thought Mr Brown should do as a sales agent.

The Plaintiffs’ Commission Claim

Turning now to the Plaintiffs’ commission claim, he “project price” for A&I Coatings was $46,700, with Mr Brown and Flex Pack claiming 12.5% commission in the sum of $6,421.25. The Diversey project had a total price, from 3 invoices of $644,000 with commission claimed of $88,550. Omicron says that Flex Pack and Mr Brown are not entitled to commission in respect of the A&I Coatings and Diversey projects.
If the April agreement did provide that a mere introduction that eventually led to a sale was sufficient for Mr Brown to earn his commission, then I would agree that his claim would succeed. However, primacy must be given to the written terms of the contract. To the extent that Mr Brown submitted that post-contractual conduct (ie, Omicron informed Mr Brown of the “progress of the A&I Coatings and Diversey jobs”) should be considered as an aid to construing the terms of the contract, such evidence is not admissible for that purpose: see, eg, Regreen Asset Holdings Pty Ltd v Castricum Brothers Australia Pty Ltd [2015] VSCA 286 at [132] and the authorities there cited.
Mr Brown submits that “the basis for commission is an introduction that leads to a sale. If introductions were made and a sale follows the commission is payable.”[13] However, the word “introduce” does not even appear in the April agreement. It speaks only of sales. Here, in the A&I Coatings and Diversey cases, all that can be said is that Mr Brown facilitated an introduction but the remaining aspects of the “sale” itself, that is, the specification of the design of the project, and its pricing, appears to have been done by Omicron. Mr Brown does not argue otherwise.
[13] Plaintiffs’ submissions dated 10 August 2023 at [12].
Whilst Omicron accepted that Mr Brown had facilitated the introductions to A&I Coatings and Diversey, it said that Mr Brown did not “secure” the sales. It referred to what McHugh J said in Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2 at [27]:
In the absence of contrary agreement, the law implies a term that the agent is not entitled to its commission merely because it has introduced the purchaser of the property. If the agreement is that commission is payable on “introducing” or “finding” a purchaser … the agreement will be construed as meaning that the commission is payable only when the agent has introduced or found a purchaser who is ready willing and able to complete the purchase … Moreover, the agent must prove that the introduction was the effective cause of the sale.
The April agreement refers to selling and “getting customers.” In my opinion, there is probably little to distinguish between the phrase “getting customers” and “finding” a purchaser (as referred to by McHugh in Moneywood). The April agreement must therefore be construed as requiring Mr Brown to prove that A&I Coatings and Diversey were, at the time of his introduction of them to Omicron:
(a) “ready willing and able to complete the purchase”; and
(b) that he was the effective cause of the sale.
That, he has not done, and understandably since, on his own case, all he needed to do was effect an introduction that, ultimately, led to a sale.
Moreover, paragraph 2 of the April agreement provides that “the Agent can set the Prices on Product(s) but the Principal will have final confirmation.” In these circumstances, it would be difficult for Mr Brown to prove that a purchaser was ready, willing and able to complete a purchase given that the price – an essential ingredient – was subject to Omicron’s confirmation. If Mr Brown introduced a purchaser for a given product or project, at a price that was accepted by Omicron, then it would follow that Mr Brown would be entitled to commission. But, at least in A&I Coatings and Diversey, that is not how the “sale” occurred. It required negotiation and the parties going back and forth to determine the scope of the project. It may well be that simple introductions by Mr Brown would suffice to earn him commission, but only where the sale required no further details to be settled, including price. But that was not the case for A&I Coatings or Diversey.
I note that there was little attention given to the wider circumstances of the sales, including, by example, calling representatives from the purchasers. That is probably explicable since Mr Brown has taken the view that his mere introduction of the purchasers was sufficient. The Omicron witnesses gave evidence (which I accept) that they were required to do a lot of work to achieve the sale. It follows that Mr Brown has failed to prove that he was the effective cause of the sales to Diversey and A&I Coatings. Although no doubt he played a part, it would seem that it was Omicron itself which did the required work to get the A&I Coatings and Diversey to a position where they were “ready, willing and able” to commit to their respective “projects”.
An alternative argument could be advanced for Mr Brown that cl 1(C) of the April agreement, which states that “It is understood that the Agent will represent the Principal by getting Customers, and the Customer dealings will be with the Principal by way of invoicing, correspondence, payments, warranties etc”[14] should be construed as equating “getting Customers” with an “introduction” and the rest of the tasks set out are intended to refer to the rest of the work required to be done to effect a sale. However, I think the class of “Customer dealings” referred to are all directed at matters that would be engaged only after a concluded sale is made. I do not think “invoicing, correspondence, payments, warranties, etc” are suggestive of negotiating and concluding the terms of a sale. They seem to be more of an administrative and clerical nature to be completed after a sale is made, than anything to do with negotiating and designing products and projects.
[14] Plaintiff’s CB at 91.
In the “absence of any grounds, such as a plea of non est factum, which at common law would render the contract void and of any grounds, such as misrepresentation, which might attract equitable relief, or which might elicit curial dispensation under a statutory regime”,[15] I am required to apply the April agreement according to its written terms, considered objectively. Mr Brown did not seek to overcome “the strict application of legal principle to contractual relations” by reference to any of the recognised means referred to by the High Court in Toll.[16] Instead, the case was run on the basis that the contract was to be construed as one which enlivened an entitlement to commission so long as he provided an introduction and a sale was subsequently made. I do not agree the April agreement can be construed in this manner.
[15] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [49].
[16] Ibid at [48].
It follows that both the claim and counterclaim are to be dismissed.

Other matters

In its submissions, Omicron contended that the Plaintiffs were not entitled to recover on the basis that Omicron had been unjustly enriched or that they were entitled to a quantum meruit. Since this was not pleaded by the Plaintiffs in any event, there is no requirement to consider the matter.
Flex Pack admitted that it had agreed to pay the sum of $4,850 to Omicron. Whilst I will make that order, I note that I am, consistently with my reasons above, unable to identify any contractual basis for it – at least under the April agreement the subject of this proceeding. The email correspondence reveals that this relates to “engineering we’ve carried out on your #210 and #110 machines”.[17] There is no suggestion that ownership of those machines or the engineering work done in relation to them does not remain with the Plaintiffs. I assume they retain the benefit of the “engineering”.
[17] Defendants’ CB at 545.
Finally, earlier in these reasons I referred to Omicron’s pleaded case that Flex Pack was not a party to the April agreement. In the result, I do not think it matters either way. I note, however, that there is a substantial amount of evidence that Omicron did see itself as dealing interchangeably with Flex Pack and Mr Brown. If it did matter, the April agreement could probably be rectified or, given the course of dealing, an estoppel would arise.

Orders

Subject to any offers of compromise that may have been made, it may be that there should be no order as to costs. If that is not agreed, the parties should list the matter before me as soon as possible. Otherwise, that will leave the single order that the Plaintiffs pay the Defendant the sum of $4,850. I would ask the parties to submit draft orders or otherwise notify the Court how they wish to proceed.

G Robinson

[2023] VMC 14

31 October 2023