Watermark Restaurant Pty Ltd v Hunters Beach Investments Pty Ltd

Watermark Restaurant Pty Ltd, the plaintiff, brought an action against Hunters Beach Investments Pty Ltd, the defendant, over the interpretation of certain clauses in a contract between the parties. The dispute centred on the payment of a 3% fee to Wilson and Leung, and the roles and obligations of the Counter Signatory in relation to these payments. The case was heard in the Supreme Court of New South Wales.

The primary legal issues addressed by the court were the interpretation of the contractual terms concerning the 3% fee and the role of the Counter Signatory in approving and making these payments. Specifically, the court had to determine whether the Counter Signatory had the right to refuse to sign cheques for the 3% fee, the nature of the fee as either a turnover remuneration or a consulting fee, and the method by which any replacements for Wilson and Leung should be paid.

The court found that the Counter Signatory could not refuse to sign cheques for the 3% fee provided the amount did not exceed 3% of the Gross Income payable to Wilson and Leung. The court clarified that the fee did not fall under the categories of turnover remuneration but rather constituted a consulting fee. The court also ruled that the consulting fee was not contingent on Wilson and Leung's physical presence unless a replacement was necessary, in which case the replacement had to be of equal standing and ability. The court further determined that Wilson and Leung were each entitled to a consulting fee of 3% of the Gross Income, with any replacement payments deducted from this amount.

The court ordered that the Counter Signatory could not refuse to sign cheques for the 3% fee if the amount was within the specified limit. It also ordered that the fee was not a turnover remuneration but a consulting fee, and that the only requirement for presence was when a replacement was needed, based on equal standing and ability. The court mandated that Wilson and Leung each receive a consulting fee of 3% of the Gross Income, with the company having the flexibility to either deduct and pay the replacement(s) directly or have Wilson and Leung manage the process and account for the balance.