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Zahedpur v Idameneo (No 123) Pty Ltd


[2016] QCA 134





Zahedpur v Idameneo (No 123) Pty Ltd [2016] QCA 134


ACN 002 968 185


Appeal No 9215 of 2015

SC No 9836 of 2012


Court of Appeal


General Civil Appeal


Supreme Court at Brisbane – [2015] QSC 255


24 May 2016




29 February 2016


Philippides and Philip McMurdo JJA and Bond J

Separate reasons for judgment of each member of the Court, each concurring as to the orders made


  1. Appeal dismissed.
  2. Appellant to pay the respondent’s costs of the appeal.


CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH  – where the appellant medical practitioner contracted with the respondent in December 2009 to provide services from the respondent’s medical centre for a period of five years – where the relationship between the parties broke down and the appellant left the respondent’s medical centre in February 2012 alleging that the respondent had failed to remedy numerous complaints – where the respondent sued the appellant in the Trial Division for breach of contract – where the learned trial judge found the appellant was in breach of contract – where the appellant contends that the learned trial judge erred because the respondent was in fact in breach of contract by failing to remedy the complaints raised – whether the trial judge erred

DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT – GENERAL – where, at trial, the respondent calculated and particularised its losses on the basis of projected income at the respondent’s medical centre had the appellant performed the entirety of the five year period of the contract – where the learned trial judge awarded damages reflecting the loss of income between the date of the appellant’s departure from the medical centre and the recruitment of a replacement medical practitioner at the centre – where the evidence suggested some correlation between the number of doctors at the centre, patient waiting time and the centre’s profit, but could not definitively establish the respondent’s losses caused by the appellant’s departure – where the appellant contends that the learned trial judge erred in calculating and awarding damages because the respondent had not proved any loss caused by his breach – whether the trial judge erred in awarding damages for the appellant’s breach

Uniform Civil Procedure Rules 1999 (Qld), r 757

Baltic Shipping Co v Dillon (1993) 176 CLR 344; [1993] HCA 4, cited

Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, cited

Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54, applied

Idameneo (No 123) Pty Ltd v Zahedpur [2015] QSC 255, approved

Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (1997) 42 NSWLR 462; [1997] NSWSC 473, cited

Robinson v Harman (1848) 1 Ex Rep 850; (1848) 154 ER 363; [1848] EngR 135, cited

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8, cited


The appellant appeared on his own behalf

K A Barlow QC, with D de Jersey, for the respondent


The appellant appeared on his own behalf

HopgoodGanim Lawyers for the respondent

[1] PHILIPPIDES JA:  I agree with the reasons of Philip McMurdo JA and the orders proposed.

[2] PHILIP McMURDO JA:  The appellant is a medical practitioner, who from July 2010 until February 2012 practised from medical centres which were owned and operated by the respondent.  He did so under written contracts between the parties, by which he was to be paid $500,000 and to have the use of the respondent’s premises and the benefit of its administrative services, in return for the payment to the respondent of one half of the fees earnt by him.  He agreed to practise exclusively in this way for a term of five years from 29 July 2010.

[3] In February 2012, the appellant decided to practise elsewhere and he left the respondent’s centre at Springfield, complaining that the respondent was in breach of contract in many respects.  This was disputed by the respondent which claimed that it was the appellant who was in breach, by moving elsewhere.  The respondent terminated the contracts and sued the appellant in the Trial Division, claiming (relevantly for this appeal) damages for breach of contract.  The respondent was awarded damages of $199,321, which with the addition of interest, resulted in a judgment for $234,202.[1]

[4] By this appeal, it is argued that the judgment should be set aside, essentially for two reasons.  The first is that the trial judge was wrong to conclude that the respondent had duly terminated the contracts because the appellant had not committed a breach or at least one which entitled the respondent to terminate them.  The second is that the respondent failed to prove that it had suffered a loss.

[5] For the reasons that follow, the appeal should be dismissed.

The contracts

[6] On 18 December 2009 the parties made two written agreements.  One was described as a Sale of Practice Deed (which I will call the Sale Deed), by which the appellant would sell to the respondent what was said to be his then practice in Gladstone for a price of $500,000.  The sale was to be completed on 1 March 2010.  The other was described as a Practitioner Services Deed (which I will call the Services Deed).  It provided that the appellant would commence work at the respondent’s medical centre at Belconnen in the Australian Capital Territory upon the completion of the sale of his Gladstone practice and practise only through the respondent’s centre for a term of five years.  There were similar requirements of the appellant also within the Sale Deed.  The contracts were expressed to be interdependent.

[7] As it happened the appellant did not practise at Belconnen, due to limitations upon his right to work as a general practitioner, having been trained overseas and not then being a Fellow of the Royal Australian College of General Practitioners.

[8] On 18 May 2010, the parties executed a further deed by which they amended their contracts to the effect that the appellant would practise from the respondent’s medical centre at Springfield and from 1 July 2010.  On 9 June 2010, the parties executed yet a further deed amending their contracts, by which the appellant would practise instead from the respondent’s centre at Forest Lake until he obtained his Fellowship of the College when he would move to the Springfield centre.

[9] On 28 July 2010 he began practising at Forest Lake and on the following day he was paid $500,000, the agreed price on the sale of his Gladstone practice.  He worked at Forest Lake until July 2011 (when the respondent closed that centre) and worked at the Springfield centre from 15 August 2011.

[10] By clause 2 of the Services Deed, it was to commence on the so-called Commencement Date and continue for a period of five years after then until determined by either party by 30 days’ notice to the other.  It was common ground that the Commencement Date became 29 July 2010.[2]

[11] By clause 3 of the Services Deed, the respondent agreed to provide services and facilities as follows:

“3.1The Company must, at its cost and expense, provide supply and maintain to and for the Doctor, and such other persons as may at any time practise medicine and provide paramedical services from the Premises, such administrative services, clerical staff, facilities, plant and equipment as are in the opinion of the Company necessary for the Doctor to render medical services from the Premises.

3.2The services and facilities to be provided by the Company under Clause 3.1 include:

(a)the provision of space within the Premises suitable for the conduct (during such hours as are mutually agreed between the Company and the Doctor at any time) of a professional practice by the Doctor, the location of such space being specified from time to time by the Company; and

(b)the provision of all necessary plant, equipment, apparatus, instruments, fittings, furniture and furnishings as are in the opinion of the Company reasonably necessary for the provision of medical services by the Doctor from the Premises; and

(g)the provision of [a]…standard telephone to the Premises;”

[12] The respondent further agreed to provide accounting services to the appellant, by rendering on behalf of the appellant all accounts in respect of his practice.  In turn the appellant agreed to deliver (to the respondent), without deduction, any money received by him in payment for his services and to complete all necessary forms and documents to enable the respondent to seek payment from Medicare or other institutions in relation to his services.

[13] By clause 5 of the Services Deed, the appellant agreed to practise from the relevant medical centre, described in the contract as the Premises, as follows:

“5.1The Doctor must attend at the Premises and render medical services:

(a)from such location within the Premises as may be specified at any time by the Company; and

(b)during such hours as are mutually agreed between the Company and the Doctor at any time.

5.3The Doctor must:

(a)use the Doctor's best endeavours to promote the interests and welfare of the practice at the Premises;

5.4The Doctor must support on appropriate occasions, by word of mouth and appropriate referrals, the medical and paramedical services available at the Premises.  Such support must be given insofar as it is professionally, ethically and medically acceptable…”

[14] By clause 6 of the Services Deed the appellant agreed to pay to the respondent, by way of remuneration for the use of the Premises and the services provided by the respondent, 50 per cent of his fees.  In practical terms, this required the respondent to remit to the appellant his 50 per cent.

[15] Clause 9 of the Services Deed provided for termination by the appellant or the respondent in relevantly the following terms:


9.1The Doctor may terminate this Deed by notice in writing to the Company if the Company commits any breach of any provision of this Deed other than a breach which (being capable of being remedied) is remedied within 7 days of notice being given to the Company by the Doctor.

9.2The Company may terminate this Deed on the happening of any of the following events:

(a)the Doctor commits any serious breach of any provision of this Deed and the Doctor has failed to remedy that breach within 7 days of receiving a notice from the Company calling for that breach to be remedied;

9.3The expiration or termination of this Deed does not affect such of the provisions of this Deed as expressly or impliedly operate or have effect after that time (Clauses 7.1, 7.2 and 8.1) and is without prejudice to any rights of action already accrued to either party in respect of any breach of this Deed by the other party.”

[16] By clause 10 of the Services Deed it was agreed that the parties were not partners or in an employer/employee relationship.  It was further agreed that all medical practitioners at the Premises were not employees of the respondent and that its relationship with them was effectively the same as that between the present parties.

[17] The Sale Deed described the subject of the sale as the appellant’s medical practice owned and conducted by him at a certain address in Gladstone.  The property to be sold was said to consist of the goodwill of that practice and equipment which was ultimately described as the “doctor’s bag”.  As to the goodwill, the appellant agreed that during the “restrained period” he would not render medical services at any place within 10 kilometres of the Gladstone premises.  He further agreed not to do so within 10 kilometres of the centre at which he was to work under his contracts with the respondent.  The restraint period was alternatively defined but the longer period was five years from the completion of the sale.

[18] By clause 4 of the Sale Deed, the parties agreed to execute the Services Deed.  The appellant agreed that he would, under the Services Deed, render medical services for at least five years from the respondent’s premises and not from elsewhere.  In particular he agreed to render those services, “during those five years, for no less than 50 hours per week for 48 calendar weeks per financial year.”  He promised that he would work a certain number of hours per weekend and one evening from Monday to Friday, together with working for some public holiday periods “so as to enable [the respondent] to manage [its] premises as a medical centre which operates efficiently 24 hours a day for 365 days a year”.

[19] The Sale Deed contained express provisions for its termination by the appellant or the respondent which, in substance, mirrored the terms of clause 9 of the Services Deed.  The Sale Deed also provided that a due termination of the Sale Deed under those terms would be automatically a due termination of the Services Deed.  And it contained provisions which mirrored clause 10 of the Services Deed as to what was or was not the relationship between the parties.

The appellants departure from Springfield

[20] Almost from the outset (in frequent correspondence and meetings between the parties), the appellant expressed his dissatisfaction with the respondent’s performance of the contracts, first at Forest Lake and then at Springfield.  Towards the end of his period at Forest Lake, he threatened to move elsewhere.  The respondent replied that he was not entitled to do so according to their contracts.  After his move to the Springfield centre, he continued to make complaints, some of which were later argued in this case as breaches of contract by the respondent.

[21] Eventually the appellant wrote the respondent a letter dated 6 February 2012 which relevantly included the following:

“Beyond 2 weeks from the date of this letter ie, 19 February 2012; in case that [the respondent] fails to eliminate the abovementioned unfair conditions at the centre, or fail[s] to secure an appointment system for me at the centre, I preserve [sic] the right to temporarily seek alternative income elsewhere… [the respondent] will be held responsible for the losses I will suffer for my move-out from the centre, and the possible later move-in…for my coming back to the centre under my current contract, [the respondent] will be responsible for my losing of my patient database which I have built away from Springfield Medical Centre.”

[22] On 20 February 2012, the appellant wrote again, saying that as his deadline of 19 February had passed and none of his concerns had been properly addressed, he was “ceasing to work at Springfield Medical Centre from 20Feb2012.”  The appellant concluded that letter as follows:

“Dr Ramesh Venkataraman at Springfield Medical Centre has accepted to takeover the care of my patients.  Please deliver all of my paperwork and mail to him.”

[23] On the following day the respondent replied, saying that the appellant had no contractual right to “walk away” and that the respondent expected him to return to the centre.  On the same day the respondent sent another letter to the appellant, headed “Notice of Serious Breach”.  It was a notice given purportedly pursuant to clause 9.2(a) of the Services Deed and the corresponding provision of the Sale Deed.  It referred to the appellant’s letter of 20 February and what was said to have been his confirmation, when telephoned at a medical centre at Greenbank, that he had commenced to work there on a full time basis.  It informed the appellant that his failure to attend the Springfield centre constituted a serious breach which he was required to remedy.

[24] On 22 February 2012, the appellant wrote to the effect that his stance was unchanged.  By letter of 15 March 2012, the respondent gave the appellant a notice of termination of the Sale Deed, noting that this resulted automatically in the termination of the Services Deed.  Alternatively, the letter stated, the respondent elected to terminate both agreements for the appellant’s repudiation of them.

[25] At no stage did the appellant seek to return to the respondent’s Springfield centre or otherwise perform the contracts.

The respondents claim

[26] The respondent claimed damages for breach of contract and “further or alternatively, restitution in a sum to be determined by the Court for the unjust enrichment of the defendant at the expense of the plaintiff.”  The respondent pleaded that by the appellant’s letter of 20 February 2012 and his failure to return to the Springfield centre, the appellant had acted in breach of the Sale Deed and the Services Deed and by the same conduct, had repudiated those contracts.  It pleaded that it had terminated the contracts by its notice of 15 March 2012 and that it had suffered loss and damage in an amount of $533,615, “comprising the loss of profit from the service fee revenue that the plaintiff would have earned if the defendant had rendered medical services, in accordance with the terms of the [contracts], for no less than 50 hours per week for 48 weeks in each financial year…from the Commencement Date to 28 July 2015.”

[27] There was an alternative restitutionary claim, by which the respondent alleged that it was entitled to restitution of part of the price of $500,000 (plus GST) which it had paid under the Sale Deed.  The respondent alleged that the appellant had received payment of that price “as consideration, inter alia, for the defendant’s agreement to enter into the [Service] Deed and to render medical services for the term of the [Deeds]”.

[28] At the trial, in the respondent’s written submissions which were presented at the conclusion of the evidence, that alternative claim for restitution was pressed.  It was submitted that as the appellant had left Springfield more than three years prior to the expiry of his five year term, having taken “the full benefit of the upfront payment under the Sale Deed”, the appellant “has had and received a proportionate amount of the purchase price to the use of [the respondent]”.  It was submitted that a “fair and just compensation for the benefit obtained by [the appellant] would be achieved by requiring him to pay [70 per cent] of the purchase price.”

[29] But it appears that the respondent did not persist with the restitutionary claim at the trial.  The trial judge wrote:[3]

“I turn now to the question of damages.  In so doing, I note that it was properly conceded by counsel for the plaintiff that, in dealing with the case as one of breach of contract, it is unnecessary for me to deal with the alternative claim for restitution.”

[30] The respondent filed no notice of contention seeking to rely upon its alternative claim in restitution[4] and did not seek to pursue that claim in its argument in this court.  That is unsurprising, because there was only a partial failure of the agreed consideration for its payment of the price under the Sale Deed.  The respondent did receive some of the benefits for which that payment was made, at least by the appellant practising from the respondent’s centres for a time before his departure in 2012.  The payment of $500,000 was not apportioned by the Sale Deed between different benefits to be received by the respondent.  Nor was this a case where it could be said that the Sale Deed, upon its proper interpretation, entitled the appellant to retain the payment only conditionally upon the performance of his obligations to work at the respondent’s centres for the entirety of the agreed term.[5]  The respondent’s recovery of the price, in whole or in part, by a claim in restitution was precluded by its having received part of the benefit for which it bargained.[6]  However, as I will discuss, the payment was relevant in the assessment of damages for breach of contract.

The primary judgment

[31] The trial judge considered the appellant’s pleaded complaints that the respondent had breached the contracts and concluded that none of the alleged breaches was established.[7]  On those findings, said his Honour, it followed that there was no justification for the appellant refusing to provide his services and his failure to do so was a fundamental breach of each of the contracts such that the respondent was entitled to terminate them as it had done.[8]

[32] On the question of damages, the trial judge concluded that the respondent’s compensable loss should be confined to a period from 20 February 2012, when the appellant left the Springfield centre, until 1 July 2013, which was about when another general practitioner joined the Springfield centre, effectively as a replacement for the appellant as the trial judge saw it.[9]  His Honour rejected a claim for damages for any breach of contract which predated the appellant’s departure from the centre,[10] because such a claim had not been pleaded.

[33] In rejecting a claim for damages for loss of the appellant’s services from 1 July 2013 until 28 July 2015 (the date when the five year term would have expired) his Honour said:

[91]The plaintiff itself was not in the business of providing medical services; as described by Ms Ward, it was in the business of providing administration and facilities to the doctors who themselves provided the medical services.  The plaintiff derives its income, and hence its profits, from the doctors to whom it provides its services.  When the defendant was at the Springfield centre, the plaintiff derived its income, and thereby earned its profits, from 13 doctors.  When the defendant left, that income and profit stream dropped back to 12 doctors until July 2013, when it returned to 13 doctors.

[92]There was nothing unique about the defendant as a source of income for the plaintiff.  This was not a case, for example, in which the defendant was providing highly specialised or unique services.  As a profitgenerating source for the plaintiff, the defendant was interchangeable with other general practitioners.  This must necessarily have been the case in the “walk in” model adopted by the plaintiff, and because he was not unique as a profit source for the plaintiff, the defendant was completely replaceable.”

[34] In this court, the respondent does not challenge the assessment of damages.

Breach of contract questions

[35] Although it is not entirely clear from the appellant’s submissions, I will assume that he challenges each of the findings made by the trial judge as to whether the respondent was in breach of contract.

[36] The first of those complaints is that the respondent did not allow patients to make appointments with the appellant.  The trial judge remarked that this reflected the appellant’s dissatisfaction with the plaintiff’s “walk in” model, which his Honour described as follows:[11]

“In general terms the administrative model under which the plaintiff’s medical centres operated was that patients did not make appointments to see particular doctors, but were seen by the first available doctor rostered on for duty at the time the patient attended.  This was to be contrasted with an appointment based system, such as had previously operated at the Forest Lake centre before it was purchased by the plaintiff.  The engagement contracts of doctors who commenced practising from the Forest Lake centre before it was owned by the plaintiff allowed for an appointment based system of attendance on particular doctors.”

[37] His Honour rejected this first complaint for two reasons.  The first was that the appellant could not make this complaint having contracted with the respondent, according to his Honour’s findings, in the knowledge that the “walk in” administrative system was “operative in the plaintiff’s medical centres.”[12]  Secondly, his Honour found that in fact, a patient who wanted to see the appellant was not prevented from doing so as a consequence of the “walk in” arrangements.  His Honour found as follows:[13]

“If a patient attended at the medical centre and wished specifically to be seen by the defendant, that request would be accommodated.  The only effective proviso was that the patient would have to ‘wait in line’ until patients who had arrived at the centre ahead of that particular patient had been attended to by the doctors (including the defendant) available at the centre at that time.”

Neither of those reasons provided an obvious answer to the appellant’s complaint.  The appellant’s knowledge of the “walk in” model may not have been a circumstance which qualified the relevant terms of the Deeds.  And the “walk in” arrangement was a different thing from a patient being able to make an appointment with the doctor.  But the appellant’s task was to prove that the system of not facilitating appointments was a breach of an obligation stipulated by one or both of the Deeds and the problem for the appellant was that under the Deeds, the respondent was given some scope as to how it should provide its services.  Clause 3.1 of the Services Deed required the respondent to provide:

“…such administrative services, clerical staff, facilities…as are in the opinion of the [respondent] necessary for the [appellant] to render medical services from the Premises.”

The appellant did not seek to prove that in the respondent’s opinion, the particular service of the making of appointments was necessary.  And nor was the trial judge apparently persuaded that on an objective view, that service was necessary in order for the appellant to render his services.

[38] The second complaint is related to the first, in that the appellant alleged that reception staff at the Springfield centre were prevented from asking patients who had been treated by the appellant previously if they wished to consult the appellant again rather than another doctor.  His Honour referred to the evidence of a witness who had worked as a receptionist at the Springfield centre at a relevant time, according to which she would ask whether the patient would like to see the first available doctor or a particular doctor.  She said that if the preference was to see the doctor who had treated that patient previously, she would identify the doctor from the respondent’s records and the patient would be directed to that doctor.  The evidence of this witness is not specifically challenged by the appellant’s submissions and his Honour’s acceptance of that evidence disposed of the second complaint.[14]

[39] The next complaint is that the respondent did not display the names of the doctors in its medical centres.  His Honour held that there was no contractual obligation on the respondent to do so, this being a matter for which there was no established effect on the doctor’s capacity to render medical services from the centre.[15]  There was no error in that conclusion.

[40] The next complaint, which received particular attention in the appellant’s submissions in this court, was that he was not allowed to make telephone calls from the centre to mobile telephones of patients, without having an employee dial the number for him.  The appellant argued that this unduly restricted his ability to render his services.  According to the evidence of Ms Ward, who had been the respondent’s state manager from November 2011, this was a common restriction in the respondent’s medical centres and was imposed as “a cost efficiency exercise” and also to “mitigate any risk of not recording any patient notes that were required to keep the record complete.”  That second consideration was explained by the risk that a busy doctor might not record the making of every call.  But that could not have provided a reason for distinguishing calls to mobile phones from calls to landlines.  The other justification, which was on the basis of “cost efficiency”, was not developed in the evidence.  Neither justification was apparently compelling.

[41] The trial judge referred to clause 3 of the Services Deed where it required the respondent to provide, amongst other things, the provision of “a standard phone” to the premises, about which his Honour said:[16]

The defendant was provided with those services.  He was not prohibited from making calls to mobile telephone numbers.  The only restriction, for the administrative purposes explained to me in evidence, related to the way in which such calls would be placed.”

His Honour referred to an argument of the appellant as to the possibility of an emergency where the doctor would not wish to be delayed in telephoning the patient, but as to which his Honour remarked that:[17]

“There was no evidence of the sort of drastic scenario posited by the defendant having actually occurred.”

The trial judge thereby reasoned that there was no practical effect upon the appellant’s work from this restriction so that it involved no breach of contract.  There was no error in that reasoning.

[42] The remaining complaint is that the respondent did not facilitate the “electronic provision of all the incoming radiology and pathology reports”.  The trial judge noted that there was no issue that pathology and radiology reports which came from service providers within the group of companies of which the respondent was a member were provided electronically to doctors at the centre and that reports from other sources were not “directly available” in electronic form.  His Honour reasoned as follows:[18]

“On the evidence, that had as much to do with IT security concerns as with a desire on the part of the plaintiff to facilitate the provision of such reports from providers within the same group of companies.  There was no evidence to suggest that the defendant was precluded from seeking such reports from external laboratories and practices.  Nor was there any evidence to suggest that the reports provided by those external providers were not supplied to the defendant.  Nor was there any evidence to suggest that there had been any instance in which the defendant’s ability to render medical services to his patients had in any way been compromised or affected by these restrictions.  Yet again, the defendant may have preferred to have received all reports, regardless of the identity of the provider, by direct electronic means.  But the fact that the system did not permit this does not mean that the plaintiff was in breach of its obligations under the [Deeds].”

I agree with that analysis.

[43] In my conclusion, therefore, the trial judge was correct to reject the appellant’s allegations of breach of contract.  His Honour further held, correctly, that none of the alleged breaches could have founded a termination of the contracts by the appellant absent a notice from him to the respondent requiring the breach to be remedied within seven days and that no such notice had been given.[19]  His Honour thereby concluded, again correctly, that there was no justification for the appellant’s failure to perform the contracts.

[44] But further, there could have been no such justification, even had any such breach been established.  None of the alleged breaches was of a term which was a condition of either contract.  The performance of the contracts, if required in the respects alleged by the appellant, was not stated to be a condition precedent to the appellant’s obligation to perform them.  And none of those breaches would have constituted a repudiation by the respondent.  In general, a party in breach of a non-essential term is not prevented from rescinding for a fundamental breach or repudiation by the other party.[20]

[45] The appellant argued that his Honour erred in finding that his departure from the centre constituted a fundamental breach or a repudiation.  In essence the appellant’s submission was that he had made it clear from his correspondence with the respondent that his absence would be only temporary.  That submission cannot be accepted.  The relevant correspondence is set out at [22].  In his letter of 20 February 2012 he asked for a certain doctor to take over the care of his patients and for his paperwork to be delivered to that person.  He had referred in earlier correspondence to preserving “the right to temporarily seek alternative income elsewhere”.  But a temporary absence was not at all indicated by his letter of 20 February or by his conduct in setting up a practice elsewhere.


[46] The respondent’s case was argued at the trial by reference to an analysis by a forensic accountant, Mr Vincent, who wrote several reports and gave oral evidence.  His Honour accepted Mr Vincent’s evidence and used his calculations[21] in quantifying the award.

[47] Mr Vincent’s methodology was as follows.  He calculated an amount described as the Average Service Fee per Hour which would have been charged by the appellant, by multiplying the average number of patient consultations with the appellant per hour at the Forest Lake and Springfield centres by the amount of the relevant fees and payments per consultation.  The average number of patient consultations at Forest Lake was 2.97 per hour and at Springfield, 2.62 per hour.  The service fee per hour was thereby the average hourly income earnt by the appellant.  That could be expressed as lost fees over a certain period by assuming that the appellant rendered medical services for 50 hours per week for 48 weeks per financial year (as required by the Sale Deed).  One half of the fees not earnt by the appellant was income lost to the respondent.  This resulted in a calculation of income lost to the respondent for the period 20 February to 30 June 2012 of $52,232 and for the year ending 30 June 2013 of $153,487.  Mr Vincent calculated the variable costs of the respondent as a percentage of “sales” so as to be able to arrive at a loss of profits figure.  On his calculation, the variable costs represented 3.11 per cent of the amount of the fees which would have been earned by the appellant such that the lost profits in those two periods would have been $50,608 and $148,713.  The total of these amounts, $199,321, was the amount of damages awarded.[22]

[48] Before going to the appellant’s argument that no loss was suffered by the respondent, I will discuss the other arguments for the appellant, the first of which appeared to be that the respondent failed to mitigate its loss.  The submission was put upon the basis that the respondent had not tendered any evidence “of any effort specifically at mitigation of losses”.  However no case to that effect had been pleaded or was argued at the trial.  Moreover there was evidence, which was discussed by the trial judge,[23] to the effect that the respondent was looking to recruit a further doctor during the period for which it was awarded damages.

[49] The appellant argues that Mr Vincent’s evidence should not have been admitted because he had expressed no opinion as to whether the respondent had suffered a loss:  rather, he had expressed an opinion as to what profits would have been derived by the respondent on an assumption, as Mr Vincent described it, that “the Springfield centre had…patient demand to accommodate Dr Zahedpur during the relevant period.”

[50] The appellant is correct in describing Mr Vincent’s evidence as involving no analysis of the likely patient demand had the appellant worked at Springfield during the relevant period.  The likelihood of that demand was therefore something which was to be proved by other evidence.  Whether that was proved was and is an issue for determination.  But the assumption by Mr Vincent in this respect did not make his evidence inadmissible.

[51] At the trial, there appeared to be other submissions which questioned Mr Vincent’s impartiality and the validity of his reliance upon the respondent’s accounting records.  Those submissions, which did not seem to be pressed in the appellant’s oral argument in this court, had no foundation.

[52] The appellant had also foreshadowed an argument that the respondent could not have been given an award which was different in its amount from that which was claimed.  Again that submission was not pressed, and was baseless.

The issue of patient demand

[53] The respondent was to be awarded damages which, so far as possible, would place it in the same position as if the contracts had been performed.[24]  That required a consideration of a hypothesis: namely the operation at the Springfield centre in the relevant period with the services not only of the doctors who did work there but also those of the appellant, working according to the contracts.  In that event, would the respondent’s income from the centre have been higher than its actual income, and if so by what amount?

[54] If the respondent was to prove that its income would have been higher, it had to prove that the demand for services at the centre would have been higher than that which was met by the doctors who did work there.  The respondent sought to prove this in two ways.  The first was by evidence that there was an unsatisfied demand, in the sense that the doctors who did work at the centre were unable to service all of the patients who sought treatment there.  The second was by evidence to the effect that an increase in the number of doctors working at any of the respondent’s centres invariably results in an increase in the demand for that centre’s services.  The effect of this evidence was that, subject to the limitation of the number of consulting rooms and other facilities at a centre, the potential income from a centre could always be increased by engaging another doctor.

[55] The trial judge discussed the evidence of two witnesses, some of which was relevant to the question of patient demand.  The first was a Ms Ward.  Her work as Queensland state manager involved “looking after the practice managers, the area managers, treatment room supervisors, dental coordinators, cost control and ensuring that the service levels were being maintained within the medical centres.”  She did not have a particular involvement with the Springfield centre although she was able to speak of its facilities.  It is perhaps necessary to set out in full his Honour’s reference to her evidence:

[82]Ms Ward, who is PHC’s Chief Operating Officer and who was the plaintiff’s State Manager of Queensland for about two years from November 2009, described the plaintiff’s business in operating medical centres as follows:

‘So there’s nurses, practice managers, administrators.  So Idameneo is a service provider.  So we provide the services of administration, nursing, practice managers, facilities, so the running of the medical practice, the facilities in – stock, so consumables in the treatment room, equipment used in the medical centres.’

[83]She described there being 14 practitioner rooms at the Springfield centre, and during her time as State Manager, there were 13 doctors rendering services.  That was not the ‘maximum capacity’ of the facility.  She said that one could ‘probably recruit another three GPs into that practice’.

[84]Ms Ward said that the Springfield centre had never been filled to maximum capacity in terms of general practitioners, nor had the Forest Lake centre.  In fact none of the plaintiff’s facilities had ever been filled to maximum capacity.  She said that the plaintiff had never had to reduce the numbers of doctors in its centres due to lack of patient demand.  On the contrary, the plaintiff continued to recruit doctors into the practices because the more doctors it recruited, the more patients it had passing through the practice.  Ms Ward said:

‘Well, the practice grows with the more GPs that we put in, because the – the – we can’t seem to keep up with the amount of patients that come into our practices.  So we are continually – to – we always look at getting more GPs into the practice to keep up with the patient demand.’

[85]She confirmed that this was the case at Springfield from 2009, and it continued to be the case.

[86]Ms Ward said that, in her experience, the demand for doctors in Australia was very high, and she did not think there were enough GPs ‘to actually look after the amount of patients that we currently have in our medical centres’.  She said this was also the position between 2010 and 2012.  Her evidence was that the plaintiff encouraged doctors to leave their current practices and to come and practice from the plaintiff’s centres; the plaintiff was currently looking at contracting about 125 doctors per year.  She said this number was needed ‘[t]o be able to ensure that we’ve got enough GPs in our medical centres that we currently have’.  She said that the plaintiff has capacity to hold more general practitioners in all of its medical centres, and this has always been the case.

[87]In relation to the Springfield centre, Ms Ward confirmed that there were 14 rooms, and that the plaintiff could have 17 doctors working from that centre.  She confirmed that none of the plaintiff’s centres in Australia had a ‘full capacity’ of doctors, and that the occupancy rate of doctors at the Springfield centre (i.e. 12 doctors in circumstances of a ‘full capacity’ of 17 doctors) was not strikingly different from the situation at the plaintiff’s other centres.”

[56] The evidence which was there discussed dealt with two subjects.  One was the respondent’s capacity to supply services from the Springfield centre.  The other was the level of demand for those services.  It is only the level of demand which is presently relevant.

[57] Ms Ward’s references to the number of practitioner rooms as against the number of doctors working from the centre was a description of a capacity to supply.  None of the centres, including the Springfield centre, worked at “maximum capacity”, because each centre had a capacity to accommodate another doctor.  His Honour referred to a statement by Ms Ward that one could “probably recruit another three GPs into that practice”.  That evidence was given in answer to a question of what was the maximum capacity of the Springfield centre.  But there could have been no issue as to that capacity.

[58] Ms Ward’s evidence as to the demand for services was discussed by his Honour at paragraphs [84], [85] and [86].  Her evidence, as summarised in [86], that “the demand for doctors in Australia was very high”, was general and of limited weight in resolving the present question.  And a statement of her belief that there were not enough GPs “to actually look after the amount of patients that we currently have in our medical centres” was again general and not an analysis of the particular interaction of supply and demand at the Springfield centre during the relevant period.  As Ms Ward had said, the respondent operated some 71 medical centres in Australia.

[59] The other witness discussed by his Honour was Mr Aitken, a consultant who had provided medical recruitment services to the respondent over 13 years.  He gave evidence of the high demand for general practitioners in Australia and a shortage of those who were trained in this country.  He said, of his instructions from the respondent to recruit doctors, that “there’s never been a limit to the amount of capital that the board has been prepared to spend on the acquisition of practices”.  According to his instructions from the respondent, some centres were given a higher priority in respect of the recruitment of doctors and he believed that “since late 2012 [Springfield has] been considered high priority…”.  But in crossexamination he acknowledged that the prioritisation between centres was not a matter for his decision or recommendation and that he did not have “any detailed idea about if the centre has got too many doctors or too few doctors or too many patients”.

[60] The respondent also called evidence from Mr Brewer, the respondent’s chief financial officer, who discussed the suggested correlation between the number of doctors employed at the centre and the level of demand for its services.  Like Ms Ward, Mr Brewer was adamant that the addition of another doctor to a centre would inevitably increase the demand for services there and thereby the respondent’s income from that centre.  Mr Brewer gave this evidence:

“You mentioned that the profitability can be dependant - one of the factors is the number of patients.  And what governs the number of patients, are you able to say?---Well, the number of doctors.  When you’re running a bulkbilling practice…the limiting factor is really the number of doctors that are there.  There’s always patient demand within a short period of time, and I think that’s consistent across - it doesn’t really matter where the practice is across Australia.  They tend to all run - have the same - I guess, there’s a shortage of GPs out there running bulkbill practices, so there is always a demand there for the doctors.  So the more doctors, the more patients.

Are you able to track the financial effect that the taking on of a new doctor in a centre has?---Yes, we do.  I mean, when a new doctor starts, you would expect within the first couple of months that the patient numbers would increase.  If they weren’t to increase, there’s probably some more operational issue there that’s causing that not to happen.  But generally, if the practice has been running well and efficiently, you will see the patients increase - patient numbers increase, and we track that monthly.”

At a later point in his evidence, Mr Brewer claimed that:

“When a new doctor comes into a centre the patient numbers proportionately increase.”

[61] When crossexamined by the appellant, Mr Brewer was taken to evidence which indicated that at the Springfield centre, there had actually been an increase in the number of patients from the time of the appellant’s departure.  Mr Brewer’s response was to say that the figures nevertheless indicated a “trend” of an increase in demand corresponding with an increase in the number of doctors.  He was asked whether there could be an estimate of the loss to the respondent from a doctor dying in the course of his contracted period, and answered:

“You could do an estimate, but I don’t know how reliable it would be.  Again, there’s a lot of variables”. 

And when asked whether he could “make a report to show how many dollars the medical centre’s income dropped because of [the appellant]?”, Mr Brewer answered:

“No, it would be difficult.”

[62] As already discussed, Mr Vincent was asked to assume, as he did, that “the Springfield centre has surplus capacity and patient demand to accommodate Dr Zahedpur during the relevant period”.  But there were documents from the records of the respondent which Mr Vincent included within his reports which were relevant to this issue.

[63] There were the documents described as Daily Reports for the Forest Lake and Springfield centres at relevant times.  They contained information as to, amongst other things, the number of patients seen within a certain day by each doctor at the centre.  There were also the so-called Provider Performance Reports, which showed for each doctor the gross billings and the number of “visits”, which Mr Vincent explained was the number of patient consultations by each doctor during a month and a financial year.

[64] The Daily Reports are of some relevance but they do not qualify the significance of the Provider Performance Reports for present purposes.  From those reports for the Springfield centre, the following information about the centre as a whole can be extracted:


Gross Billings


Yr to 30/6/12



Yr to 30/6/13



Yr to 30/6/14



Yr to 30/6/15



[65] Within the Provider Performance Reports from which those totals are extracted were shown the amounts of gross billings, visits and average fees, doctor by doctor.  Curiously and apparently in error, the appellant was shown within the 2012/13 year although accounting for only $893.  One of the 12 other doctors is shown as billing only $335 (for two consultations) for that year and that doctor[25] is shown as not working at the centre in the 2013/14 year.  As the trial judge found, a new doctor joined the centre for the 2013/14 year.[26]  Contrary to the findings of the trial judge,[27] there were but 11 (not 12) doctors at the centre in the year to 30 June 2013 and 12 (not 13) in the following year.

[66] The average number of consultations per doctor from year to year was as follows:

Yr to 30/6/12

(10 doctors)


Yr to 30/6/13

(11 doctors)


Yr to 30/6/14

(12 doctors)


Yr to 30/6/15

(12 doctors)


In the year to 30 June 2012, I have calculated the average by dividing the total consultations for that year by 10, rather than 12 doctors.  This is because there were several doctors amongst the 12 who worked at the practice for only part of that year.[28]

[67] It can be seen that the increases in the turnover of the centre in each of the years to 30 June 2013 and 2014 are consistent with the respondent’s case that an extra doctor results in an increased demand for the services of the centre, but the decrease in the year to 30 June 2015 is inconsistent with that case.  That decrease indicates what is inherently likely, which is that the level of turnover of a centre is potentially affected by very many circumstances.

[68] According to the evidence in the respondent’s case, the respondent is always looking to recruit more general practitioners for its centres across Australia.  That evidence demonstrated an optimism for an increase in the overall demand for the respondent’s centres, which for present purposes may be accepted as well founded.  But it is another thing to conclude that the level of demand for services at a particular centre can be increased simply by increasing at that centre its capacity to supply those services (by adding another doctor).

[69] The trial judge did not consider the validity of this proposition that demand could be increased at a centre by increasing the number of doctors engaged to work there.  His Honour appears to have assumed that had the appellant remained at Springfield until July 2013, there would have been enough work for him, over and above that which was performed by the doctors who did work there during that period.  The appellant’s argument was that, had he worked there during this period, the same amount of work would have been done by a higher number of doctors, so that the respondent had demonstrated no loss.  His Honour does not appear to have considered that argument and it is necessary for this court to do so.

[70] I am unable to accept that at each and every of its medical centres, by simply engaging another doctor, the respondent is able to increase the level of demand so as to keep that doctor (as well as the other doctors) fully occupied.  The level of demand at a particular centre would be affected by many variables, such as the availability of medical services at other locations in the same area serviced by the respondent’s centre.  Such a direct correlation between demand and the capacity to supply is inherently unlikely.  In the case of this centre, that correlation was disproved by the experience in the year to 30 June 2015.

[71] Nevertheless, it is likely that there was some effect upon the respondent’s income from the absence of the appellant.  This is indicated by documentary evidence, explained by Mr Brewer, as to waiting times at the centre on each day over the relevant years.  On this evidence there were many days from August 2011 to March 2015 when patients left the centre rather than waiting any longer for a doctor.  Of course there were probably very many reasons why patients did so and possibly some of them returned on another day.  But this is evidence of an unsatisfied demand for services, part of which, more probably than not, could have been satisfied by the work of another doctor.

[72] It is also probable that the level of demand was affected by a perception by patients or potential patients that there were not enough doctors working at the centre.  Patients who thought that they had had to wait too long to see a doctor could be inclined to go elsewhere.  In that way the addition of a doctor could well have increased the overall demand for services.  Mr Brewer gave evidence of this as follows:

“When a new doctor starts, they will tend to pick up those patients that probably don’t come there regularly and don’t have a regular doctor.  So they will pick up them.  When the new doctor starts, normally the wait times drop, so people are willing to – people soon realise that rather than maybe there was an hour’s wait at that medical centre, there’s only now a 10 to 15 minute wait, so people – more people will come, and pretty quickly that builds up.”

[73] The respondent thereby proved that during the period for which it was awarded damages, it suffered some loss, in that the presence of the appellant at the centre, working according to the contracts, would have yielded some additional profit.  However, without knowing the extent to which the existing demand at the centre was unsatisfied, or the extent to which an additional doctor would have increased that demand, the profits lost to the respondent could not be fairly quantified.  Therefore the respondent did not prove that there would have been a sufficient level of demand for services, above that which was satisfied by the other doctors, to yield the further profits by which the respondent’s award was quantified.

[74] But it does not follow that the respondent, having suffered a loss, was not entitled to a substantial award of damages.  Where the amount of profit from the performance of the contract cannot be demonstrated, the innocent party can still recover damages assessed by reference to the expenditure incurred by that party in its performance of the contract.  In Commonwealth of Australia v Amann Aviation Pty Ltd,[29] it was explained that this was an application of the general rule of Robinson v Harman.[30]  Mason CJ and Dawson J there said:[31]

“It would be an invitation to the repudiation of contractual obligations if the law were to deny to an innocent plaintiff the right to recoupment by an award of damages of expenditure justifiably incurred for the purpose of discharging contractual obligations simply on the ground that the contract breached would not have been or could not be shown to have been profitable.  If the performance of a contract would have resulted in a plaintiff, while not making a profit, nevertheless recovering costs incurred in the course of performing contractual obligations, then that plaintiff is entitled to recover damages in an amount equal to those costs in accordance with Robinson v Harman, as those costs would have been recovered had the contract been fully performed.  Similarly, where it is not possible for a plaintiff to demonstrate whether or to what extent the performance of a contract would have resulted in a profit for the plaintiff, it will be open to a plaintiff to seek to recoup expenses incurred, damages in such a case being described as reliance damages or damages for wasted expenditure.”

[75] Further, the law assumes that from the defendant’s due performance of the contract the plaintiff would have recovered at least its expenses of its own performance unless the defendant proves otherwise, because it is presumed that “a party would not enter into a contract in which its costs were not recoverable.”[32]

[76] The relevant expenditure here was the sum of $500,000 (and GST) paid to the appellant pursuant to the Sale Deed. This was a payment made, on the face of the contracts, to secure two kinds of benefits. The first was the acquisition of what was said to be the goodwill in the appellant’s practice at Gladstone. But in truth, this was a payment only for the second kind of benefit, which was the appellant’s services over a five year term. The respondent contracted with the appellant to obtain the services of a doctor at locations near Brisbane, rather than to benefit from whatever professional relationships the appellant had enjoyed in Gladstone. According to the evidence, whenever the respondent engages a doctor it makes a payment of this kind. The amounts vary from $250,000 to $600,000, Mr Aitken said, according to these factors: the centre at which the doctor was to be engaged, the hours that the doctor was prepared to work at that centre and the extent to which she or he would work outside normal working hours and the skills, experience and “billing practice” of the doctor. None of those related to a goodwill in a practice which the doctor was to leave. That evidence further indicates the benefit for which the payment was in truth made. The Sale Deed and the Services Deed were interdependent. The Sale Deed itself contained detailed provisions for the services to be provided by the appellant. In all the circumstances, the payment of $500,000 was, in substance, for the benefit of the appellant practising from one or more of the respondent’s centres for five years from July 2010. Consistently with that position, these payments were treated in the respondent’s accounts as goodwill acquired by the respondent at the centre where the doctor worked with the respondent, rather than as assets constituted by a newly acquired practice at, in the appellant’s case, Gladstone. The appellant’s breach deprived the respondent of most of that benefit.

[77] The trial judge considered that the respondent’s loss was confined to the period before another doctor was engaged in July 2013.  The correctness of that view need not be considered.  It may or may not have been correct if damages were to be assessed, as they were by his Honour, upon the basis of a certain loss of profit.  Because, in my view, the amount of lost profits could not be fairly quantified, it was and is open to assess the respondent’s loss by reference to its wasted expenditure.  For its expenditure of $500,000, it had the benefit of the appellant’s performance from July 2010 to February 2012, a period of about 19 months.  Most of the intended benefit from the payment was not received by the respondent and absent evidence to the contrary, it could be assumed that the respondent suffered a loss of the order of more than half of that payment.  There was no evidence which proved otherwise, except perhaps for the evidence showing the low demand at the centre in the year to 30 June 2015.  Even disregarding that year, there remained at least 28 months for which the respondent did not have the benefit of its expenditure which equated to $100,000 per year.

[78] There was no impediment to the quantification of damages upon this basis from the fact that the respondent pleaded and argued a case for damages quantified by lost profits.  A plaintiff in the respondent’s position is not put to any election between the two methods of assessment.[33]  The facts relevant to an assessment upon the basis of wasted expenditure were before the court because of the related, although distinct, claim for the recovery of effectively the same proportion of the $500,000 upon a restitutionary basis.

Conclusions about the damages case

[79] The reasoning by which damages were assessed appeared to overlook the appellant’s argument that his absence from the Springfield centre had made no difference to the respondent’s income and profit during a relevant period.  The appellant’s argument could be accepted as far as it demonstrated an uncertainty as to what level of profit was lost to the respondent.  Nevertheless the respondent did demonstrate that the appellant’s presence would have made a difference, so that the respondent suffered a loss from his breach of contract.  Although its loss of profits could not be fairly quantified, the respondent was entitled to damages assessed by reference to its wasted expenditure, in the absence of evidence proving that this would more than compensate for the appellant’s breach.  The respondent was entitled to an award at least as high as that which it received by the judgment.  Therefore the award should not be disturbed.


[80] I would order as follows:

(1)Appeal dismissed.

(2)Appellant to pay the respondent’s costs of the appeal.

[81] BOND J:  I agree with Philip McMurdo JA.


[1] Idameneo (No 123) Pty Ltd v Zahedpur [2015] QSC 255.

[2] [2015] QSC 255, [9].

[3] [2015] QSC 255, [66].

[4] Uniform Civil Procedure Rules 1999 r 757.

[5] See eg Baltic Shipping Co v Dillon (The Mikhail Lermontov) (1993) 176 CLR 344, 351; [1993] HCA 4.

[6] Ibid.

[7] [2015] QSC 255, [62].

[8] [2015] QSC 255, [65].

[9] [2015] QSC 255, [90].

[10] The breach being a failure to perform at least 50 hours of work as required by the Sale Deed.

[11] [2015] QSC 255, [52].

[12] [2015] QSC 255, [55].

[13] [2015] QSC 255, [53].

[14] [2015] QSC 255, [54].

[15] [2015] QSC 255, [57].

[16] [2015] QSC 255, [60].

[17] [2015] QSC 255, [59].

[18] [2015] QSC 255, [61].

[19] [2015] QSC 255, [63].

[20] Roadshow Entertainment Pty Ltd v (ACN 053 006 269) Pty Ltd (1997) 42 NSWLR 462, 479-480 per Gleeson CJ, Handley JA and Brownie AJA.

[21] More particularly the calculations within a table referred to in the judgment at [2015] QSC 255, [98].

[22] [2015] QSC 255, [98].

[23] [2015] QSC 255, [82]-[88].

[24] Robinson v Harman (1848) 1 Ex Rep 850, 855; (1848) 154 ER 363, 365; Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272, 286; [2009] HCA 8, [13]; Clark v Macourt (2013) 253 CLR 1, 31; [2013] HCA 56, [106].

[25] Dr Mohan.

[26] Dr Nekooee.

[27] But according to the evidence of Mr Brewer.

[28] The appellant worked there for six months from August 2011 until February 2012. Four other doctors of the 12 commenced at various dates during that year, as set out in a table at p 2905 of Exhibit 13 referred to in the respondent’s supplementary outline of argument in this court at para 2(e).

[29] (1991) 174 CLR 64.

[30] (1848) 1 Ex Rep 850; (1848) 154 ER 363.

[31] (1991) 174 CLR 64, 81.

[32] (1991) 174 CLR 64, 87.

[33] (1991) 174 CLR 64, 85.


Editorial Notes

  • Published Case Name:

    Zahedpur v Idameneo (No 123) Pty Ltd

  • Shortened Case Name:

    Zahedpur v Idameneo (No 123) Pty Ltd

  • MNC:

    [2016] QCA 134

  • Court:


  • Judge(s):

    Philippides JA, McMurdo JA, Bond J

  • Date:

    24 May 2016

Litigation History

Event Citation or File Date Notes
Primary Judgment [2015] QSC 255 03 Sep 2015 -
Notice of Appeal Filed File Number: 9215/15 15 Sep 2015 9836/12
Appeal Determined (QCA) [2016] QCA 134 24 May 2016 -

Appeal Status

{solid} Appeal Determined (QCA)