CWH lease matter to head to WA Supreme Court

tribunal hearing legal case

A high-profile pharmacist was set to lease a new pharmacy premises and even introduced the necessary doctor to the developer… but was then told the lease would go to a Chemist Warehouse

An entity controlled by Wizard Pharmacy CEO Lyndon Dyson applied for an extension of a caveat lodged over a property in Sommerville, a suburb in Kalgoorlie-Boulder.

A hearing at the Supreme Court of Western Australia concerned a premises intended for a pharmacy, on land being developed by Gullan Pty Ltd, whose sole director and secretary was Ian Johnson.

The land in question is opposite an IGA shop controlled by Mr Johnson.

According to a court transcript, from around January 2015, Mr Dyson and Mr Johnson discussed the possibility of establishing a pharmacy on the land, with Mr Dyson saying that he had pointed out that while there was already a pharmacy in Boulder, the area could support another.

The court heard that the pair discussed how a new pharmacy would require a PBS number, and how it would need to be allied to a medical centre which included at least one doctor.

Mr Johnson reportedly told Mr Dyson that while he did not know of any medical centre or doctor who might be interested, he would take the idea of the second pharmacy further if one could be found.

“Both agreed that once a new pharmacy was established it would be uncommercial for anyone else to establish a pharmacy,” the hearing’s transcript notes.

“Both Mr Johnson and Mr Dyson could see the commercial opportunity a new pharmacy represented.”

The two men agreed that they would participate in any redevelopment and they appointed their own solicitors.

In June 2015, Lyndon Dyson’s Sommerville Kalgoorlie Pty Ltd had its solicitor draft a deed granting it right of first refusal to buy a part of the redevelopment, but Mr Johnson said he preferred to retain all of the redevelopment, and instead lease it the premises for a pharmacy.

The parties agreed that Sommerville Kalgoorlie would participate as a tenant, with an option to buy the leased premises.

By 2017, Mr Johnson’s solicitor had produced a disclosure statement for the proposed lease and the draft lease, and a lease agreement was made in October 2017. At that point, the lessor was said to be another entity controlled by Mr Dyson, though this was changed to Somerville Kalgoorlie Pty Ltd in around January 2018.

By the time the elements of the agreement were in place, Mr Dyson had introduced Mr Johnson to a doctor, Jaggadish Krishnan, who it was hoped would establish the medical practice necessary for the pharmacy to proceed.

Mr Dyson signed a lease agreement, and was of the understanding that Dr Krishnan and another doctor had also signed agreements.

But in January 2020, Mr Johnson told Mr Dyson that although the development of the land was proceeding, he no longer intended to grant the pharmacy lease to Mr Dyson’s Sommerville Kalgoorlie Pty Ltd.

Instead, he proposed to grant a lease to Chemist Warehouse.

Mr Johnson said that the lease agreement had been terminated because he had been unable to fulfil one of its conditions – that is, obtaining finance approval to complete the development within a specified time frame.

However, the entity controlled by Mr Dyson made a number of submissions and said that it continued to have the right to enforce the lease agreement; it also claimed “misleading or deceptive conduct and unconscionable conduct” on the part of the first defendant.

As the matter was an interlocutory application, it was not appropriate for the Court to make findings of fact, it noted.

However, the Court noted that “there is a serious question to be tried”.

It said that the matter “should be progressed to trial as soon as possible”.

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