Michael v Amaq Medical (Crows Nest) Pty Ltd
[2005] QDC 211
•17/06/2005
[2005] QDC 211
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBIN QC
No BD 2021 of 2005
| GRAHAM DOUGLAS MICHAEL | Plaintiff |
| and | |
| AMAQ MEDICAL (CROWS NEST) PTY LTD (ACN 101 740 103) and AMAQ SERVICES PTY LTD and CROWS NEST SHIRE COUNCIL | First Defendant Second Defendant Third Defendant |
BRISBANE
..DATE 17/06/2005
ORDER
CATCHWORDS: Uniform Civil Procedure Rules r 69, r 293 - judgment given for defendant Council on the plaintiff's claim for damages for failure to recognise and protect his interest in fixtures and fittings used in his medical practice conducted in the Council's premises at termination of 10 years lease - plaintiff chose not to remove his items, now being used by a new lessee - order made for addition of the plaintiff's company over objection of remaining defendants that its interest was not shown - interest obscure but
no prejudice shown - consent of proposed new plaintiff requested.
HIS HONOUR: On interlocutory applications like the present where there is no oral evidence and no cross-examination of deponents, it is not possible for the Court to know where the real truth lies. As the long hearing unfolded, it came to appear increasingly, on the third defendant's application for judgment against the plaintiff under Rule 293, that the plaintiff who is representing himself may be pursuing points of principle and not solely the advancement of his private interests. He has remarked on the strain of the proceedings and events underlying them. The Court accepts that for most people in the community becoming involved in litigation can be a nightmare.
It has also increasingly appeared through the hearing that, if not in legal terms, then judged by other tests of the kind that well-meaning people may want to apply, Dr Michael may have been wronged by the defendants and by the present applicant in particular. The Court expresses no concluded view and notes that Mr McEvoy, the Council's CEO, does not shrink in his affidavit from suggesting that Dr Michael, aided by his wife who at some relevant times was a Councillor, was out to achieve something of a monopoly in the provision of medical services in Crows Nest.
The possibility of that is an indication of the decline in fortunes of medical practice in country centres. The story starts back in 1992 when Crows Nest had at least three medical practitioners, Dr Michael, Dr Gluer and Dr Littleton. A 10-year lease commencing the 1st of December 1992 was granted by the Council to the three doctors - in some cases, to other persons or entities standing in for them - of its building known as Community Place, Crows Nest. They did not require use of the all of the premises, some of which have been sub-leased to others such as a pharmacist and a dentist. Yet another area became, from the outset, the subject of a registered sub-lease to a Government-related body.
The lease contained an option for a further 10-year term to be exercised in writing no later than the end of August 2002.
The notice was to be given by "the lessee" - which might have produced real difficulties. Dr Littleton departed the scene about 1999 so that she was unlikely to participate in the exercise of an option. Relations between Dr Michael and Dr Gluer became extraordinarily difficult, if not impossible. This seems to be attributable, on the evidence the Court has, to an illness of the latter.
Dr Michael was constrained to change the way in which he practised, apparently moving to Toowoomba for a while and then seeking to establish a new practice in Crows Nest. He wrote to the Council on the 24th of August 2002 close to the time when the exercise of the option would have to take place:
"I refer to the schedule, item 11 section 2 paragraph C, fixtures and fittings. I wish to advise you that I will exercise my right under this section of the lease to remove half of the fixtures and fittings from the above premises prior to the expiry of the lease should a mutually suitable settlement not be achieved between the co-lessees."
It is probably the case that Dr Michael has the interest he asserts in the items identified in Exhibits 1 and 2 which are lists prepared by him for another purpose which it was advantageous to admit into evidence today. Exhibit 1 is a list of "non-fixture items" and Exhibit 2 a list of "fixture items". One of the lists includes contents of Dr Gluer's room. The other does not. The items are all of a kind which would render the premises well adapted for the conduct of the practice of a general practitioner. Some are attached to walls and floors, others were moveable.
The Council responded to the above letter by one dated 6th of September 2002 sent by Mr Tranter as Council's solicitor.
It reads:
"Dear Dr Michael,
RE: Crow's Nest Medical Centre Lease
I have been given a copy of your letter of 24 August 2002 in relation to the above and asked to respond on behalf of Council.
The issue of your intention to remove fixtures and fittings from the above premises, of which you and your wife are one of three lessees of the property from the Crow's Nest Shire Council, is a matter for the lessees not Council. Council, as lessor, has no role in sanctioning or commenting otherwise on your proposed course of action except with respect to one aspect.
While the matter of removal of the fixtures and fittings is a matter for the lessees, such removal must be carried out 'doing as little damage as possible...and making good any damage to the satisfaction of the Lessor' (Clause 2(c) of the lease). Council will insist that the premises are left in a satisfactory condition on termination and again reserves its rights in this regard against each of the lessees.
Yours faithfully, Mark Tranter, Solicitor."
The removal of such of the items as Dr Michael was entitled to would have been extraordinarily disruptive. It would have been of limited value to him. It could easily have been achieved in respect of chattels. If pursued, it would have rendered the practice of medicine in the premises extremely difficult if practical at all. All concerned, including Dr Michael, appear to have taken the view that it was in the community interest for medical services to continue to be provided in those premises without disruption in the interests of the potential patients in particular. Dr Michael freely accepted that patients who wished to avail themselves of his services would follow him to the new practice he had established in Creek Street, Crow's Nest.
A Dr Bakker appears to have been the main person practising at Community Place. Given that he has or had only a limited registration, he must have been doing so as an employee of or locum for Dr Gluer, and perhaps by arrangement with Mrs Gluer who is said to have taken over management of the practice.
The circumstances in which Dr Michael held back from enforcing his strict rights have legal consequences. He contends that those circumstances were such as to place the Council under an obligation to protect his interest which he chose not to pursue for reasons outlined which are understandable, perhaps even commendable. He contends that in its own dealings in respect of the premises, the Council ought to have incorporated some protection for him.
What appears to have happened is that others are practising medicine in the premises, taking advantage of the fixtures, fittings and other chattels and equipment in which he had an interest. So far as the fixtures are concerned, it may well be that he, for legal purposes, abandoned his interest in them by taking no step to remove them at the termination of the 10 year term.
The circumstances in which others have come to use the premises for running of a medical practice are obscure. What is clear is that there is a new, registered lease running for three years from 1st February 2003 to the second defendant.
The first defendant which has a similar name practises medicine in the premises. The Court has been told that through companies such as the first defendant, the Australian Medical Association, Queensland Branch, facilitates provision of general practitioner services by providing a structure in which flesh and blood practitioners may be accommodated without having to incur the trouble and cost of establishing necessary infrastructure.
Dr Michael's contention in his pleadings is that the first defendant (which appears to have been incorporated at an early enough date) commenced practice in the premises in August
2002 - which would be well within the 10 year term. It seemed to me that the defence of the first and second defendants is somewhat cagey in admitting the medical practice in the premises but without reference to any starting date. I have made a similar observation about the third defendant's defence which is probably unjustified. It is not contested that discussions might have been occurring. I think the Council would have a proper interest in trying to ensure that residents of the Shire had access to local medical services. The affidavit of Mr McEvoy, indeed, sets out that for a significant period of Dr Bakker's practice, the Council was not claiming rent for the premises. The admission to the premises of newcomers practising medicine does not necessarily implicate the Council. It was presumably open to any of the registered lessees to authorise use of the leased premises.
The High Court case of Chan v. Zachariah 154 CLR 178 establishes the importance of premises to medical practitioners. There was a contest between partners who had fallen out when a new lease of the premises that they had used came to be negotiated. Dr Chan appeared to be the victor but it was determined against him that he held the new lease which he obtained for the benefit of both former partners.
I do not think there is any suggestion in the case that the lessor who had some knowledge of the circumstances was obliged to protect the interests of either or both of the doctors. So far as legal analysis is concerned, I do not think the Council here had any obligation to protect the interests of Dr Michael or to ensure that no one else obtained any benefit from his fixtures, fittings and chattels in the circumstances I have attempted to describe.
There is a complaint in the statement of claim that the Council did not properly advertise when it sought expressions of interest in the premises.
It was accepted that circumstances may arise in which local governments fail to adhere to legislative requirements for tendering processes with the consequence that contracts they enter into may be challengeable, and there's an assertion, perhaps, to be found in the statement of claim to this effect. Dr Michael hasn't made it good by reference to any authority or legislation.
In this case expressions of interest were called for in a formal looking notice which is exhibit MWT4 to Mr Tranter's affidavit, in which he swears the text appeared in the local press in early to mid October 2002. It is said that there were only three expressions of interest: from the Australian Medical Association, Queensland, a sub-lessee chemist who was protecting his interests, and Dr Bakker, who shortly thereafter withdrew his expression of interest. According to the affidavit, "There is no expression of interest on behalf of the plaintiff."
Dr Michael told the Court that he had sent in an expression of interest, which the Council denies receiving. He was invited, for the information of the Court, to tender it, but says he does not have the document available. There is also some suggestion that his wife was in some way involved in the expression of interest. If there was such an expression of interest, it seems rather odd that Dr Michael did not pursue it.
The Council may have expected an expression of interest if aware of proposals that Dr Michael said he had discussed with Council officers which had to do with the integration of all the health related entities in the Shire or the town.
But the Council may also have thought, from the letter of 24th of August 2002, that if the present lessees were interested in a further term, that would occur through an exercise of the option, although I would not take that from the letter myself.
It is rather odd that the Council would write a letter, in the form of Exhibit MWT5, to the sub-lessees or sub-tenants, giving them the opportunity to protect their interests, while apparently making no approach whatever to the existing lessees, who, one would think, might be the most likely continuing or new lessees. It rather suggests a determination might have been made to exclude them.
The letter to the sub-lessees advises that, "Discussions have been held with the Australian Medication Association of Queensland regarding the new lease of the building, the conditions of which will guarantee you continued tenancy of the facility." The date of that letter was the 28th of November 2002, if I have not mentioned it.
Dr Michael has indicated to the Court that the interest that he is protecting is his interest in the fixtures, fittings and chattels, but it is really their indirect value to him which is important. He would like to have that recognised. Indeed, he has gone so far as to say he would be content if he could receive an apology from the defendants and no more. The Court cannot do much about that, but is pleased that its suggestion that release of the third defendant from the action might be facilitated if it offered an appropriate undertaking to respect whatever interest the plaintiff might establish in the items mentioned in the exhibits. Mr Byrne was able to obtain appropriate instructions and offer what seems an appropriate undertaking.
The Council may well have appropriated the fixtures by making them available to the new lessee. It has not done that in final terms prior to the end of January 2003, which would have allowed Dr Michael ample time if he was so inclined to exercise his strict legal rights in relation to those items.
He tells me and I accept that he had advice from local police and his former solicitor, Mr Bartley, to the effect that it would be better if he did not do so, which was fairly sensible, practical advice, which reflects the way Dr Michael was advising himself, in any event. It would seem unlikely that the Council has purported to make Dr Michael's chattels available for anyone else.
The court has been seeking for some basis on which the Council might be successfully pursued by this action in which the claim is for $170,000:
"Damages payable by the defendants to the plaintiff for the loss of the plaintiff's interest in a medical centre at Community Place, Crows Nest, Queensland, such interest being leasehold tenancy, business goodwill, stock and equipment owned by the plaintiff and wrongfully in the possession of the defendants and
(b) Exemplary damages and
(c) Interest from 17th August 2002."
The pleading does not, in my opinion, show a basis for liability of the third defendant.
I have already indicated that there is nothing to show at the moment, as things stand, that the third defendant was implicated in the first defendant's conducting business as the provider of medical services from 19th August 2002 or thereabouts as pleaded in paragraph 6 of the statement of claim.
Paragraph 16 provides, or states:
"The first defendant, the second defendant and the third defendant all have notice of and were aware of the plaintiff's interests at the time the practice was taken over by the first defendant and at the time the lease between the plaintiff and the third defendant expired and the defendants wilfully ignored those interests and acted contrary to those interests."
I do not think there is any basis for the plaintiff to complain about the new lease which the second defendant has. So far as earlier events are concerned, the difficulty the plaintiff has is implicating the third defendant. He was not excluded from the premises by any action of the third defendant. It was the concern about Dr Gluer that was the cause of Dr Michael's staying away, which from any point of view may have been the wise course. It does not assist him to obtain relief against the third defendant.
A few further things might be noted. Dr Michael complains that the copy of the lease made available to him did not include the page containing the option in clause 24. It does appear in the registered lease. I do not think that anything follows from his ignorance of the contents of clause 24. If anything untoward lies behind that, that should be complained of in a different or amended proceeding.
Dr Michael filed a cross application seeking addition as a plaintiff of a company, G D Michael Pty Ltd. That relief is resisted by Miss Vale, appearing for the first and second defendants. Mr Byrne indicated that if his client remains in the action, it would present the same arguments.
Dr Michael's affidavit is very vague about the interest that the company might have, deposing that
"clarity may be served by adding my company in which some of my interests have and still do vest. Under the Uniform Civil Procedure Rules, I understand that this may not be strictly necessary. However it may serve to reduce confusion".
As Miss Vale submits, that is not a particularly strong basis for joining the plaintiff if one has regard to the terms of Rule 69.
Dr Michael states from the Bar table that the company has been in existence for decades, likewise a family trust. I think it is well-known in relevant circles in the community including the courts that medical and other professional practices are highly likely to be conducted in such a way.
The lease arrangements indeed appear to make manifest that that is the way Dr Gluer ran his affairs. The company's name appears on letterheads including that used in the 2002 letter quoted above. No-one contended that any harm would ensue from the joinder of the company which may on analysis prove to be the entity entitled to at least some of the relief if the action proves successful.
Some time ago Dr Michael entered into an arrangement under Part 10 of the Bankruptcy legislation. He filed a statement of affairs in that which the Council relies on as supposedly an exhaustive statement of Dr Michael's assets which does not cover everything that has been asserted to be his in this proceeding.
That on its own is not a convincing basis for rejecting Dr Michael's claim, but the arrangement does have the consequence that he is no longer a director of the company. He said from the Bar table that his accountant and his wife are the directors now. I think the condition of the joinder of that company as a plaintiff should be that it formally acknowledge the appropriateness of the joinder.
Invited by me to present some legal argument which showed that the Council is under a potential legal liability to him, as opposed to having some obligation in honour or common morality, Dr Michael was unable to respond about that and I am not surprised.
So the orders of the Court, for the reasons articulated, are as follows:
On the third defendant undertaking by its counsel to do nothing to prevent, obstruct or limit the plaintiff in retrieving from Community Place, Crow's Nest, such of the "fixtures" and " non fixture" items listed in Exhibits 1 and 2 tendered today as the other parties may agree or the Court may determine belong to the plaintiff and may be taken from the premises by him,
Order that the third defendant have judgment against the plaintiff upon the claim under Rule 293 unless within 28 days the plaintiff obtains from the Court leave to amend the claim and replead.
Order on the plaintiff's application that G D Michael Pty Ltd ABN 595 583 488 03 ACN 010 250 138 be added as a plaintiff in the claim, subject to the filing of an affidavit by one or more of its directors consenting to its being added.
...
HIS HONOUR: I have considered those points already, Mr Byrne. But what I will do is, on your application, add the words, "No order as to costs, but in the event that such leave is obtained, costs reserved." (As the discussion just had indicates, my decision is that the claim ought not proceed for the purpose of Dr Michael obtaining disclosure from the Council, which might well flush out a case. For the moment, he cannot show a case. Another reason for refusing the Council costs is its status as a government acting in the community interests, as Dr Michael appears to have done, too.)
...
HIS HONOUR: On Dr Michael's application, costs in the cause as between the first and second defendants.
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