IN THE INDUSTRIAL RELATIONS COURT KA CF JUDGMENT No. .ctsssssssossssonel OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 4282 of 1995 BETWEEN: Jan MOLENAAR Applicant RESPONDENT: SUN GARDENS HOTEL Pty Ltd First respondent AND: Werner BALSIGER Second respondent AND: Jane BALSIGNER Third respondent MINUTES OF ORDER 18 March 1996 TOMLINSON JR THE COURT ORDERS THAT: The respondent is to pay the applicant the sum of $20,000 within 21 days of today's date. Further the respondent is to pay the applicant all the monies due by way of unpaid salary at the rate of $ 40,000 from 27 August 1995 until 17 October 1995 within 21 days of today's date under section 376. Additionally to the previous two orders the respondent is to pay to the applicant the difference between the salary he did receive and the sum of $40,000 for the period 27 July 1995 through until 25 August 1995 within 21 days of today's date under section 376. Werner Balsiger and Jane Balsiger are to be joined as co- respondents. Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules eoceccecccce IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 4282 of 1995 BETWEEN: Jan MOLENAAR Applicant RESPONDENT: SUN GARDENS HOTEL Pty Ltd First respondent AND: Werner BALSIGER Second respondent AND: Jane BALSIGNER Third respondent REASONS FOR DECISION (Delivered ex tempore revised from the transcript) 18 March 1996 TOMLINSON JR This is an application by Mr Jan Molenaar of Botany that was filed in this court on 2 November 1995 dated 1 November 1995 by the solicitor, Mr Gilles, who appears in today's proceedings on behalf of the applicant. It is noted that a notice of employer's appearance is dated 11 November 1995 signed by Werner Balsiger as managing director of the respondent company, Sun Garden Hotels Pty Limited. The respondent at all times has been unrepresented and Mr Gilles, in advising the court, stated the respondent did no attend the conciliation proceedings. It is noted a facsimile transmission on the court file indicates that Mr Werner Balsiger would not be back in the jurisdiction of this court or in the country until 2 April 1996, the facsimile transmission to Mr Gilles indicating: "Due to urgent business matters I will leave Australia on Thursday, 29 February 1996." There has been no appearance by the respondent nor anyone on his behalf at these proceedings this morning. In his sworn evidence, Mr Molenaar advised the court he had been in the hotel business for some 15 years and commenced employment with the respondent on 18 June 1995. Tendered as exhibit | in these proceedings is an employment agreement signed between the applicant, Mr Molenaar, Mr Werner Balsiger and Jane Anne Balsiger on behalf of the respondent. It was agreed between the parties the salary of the applicant was to be $40,000. It was the evidence of the applicant that on or about 31 August 1995 he was appointed a director of the respondent company. The court was advised that as a result of a notice to produce there was no document produced by the respondent indicating that the applicant, Mr Molenaar, had ever signed a consent to act as a director. It was further brought to the attention of the court that as a result of a similar notice to produce there were no board minutes produced by the respondent company indicating that at any time there was a general consensus on the part of the directors that Mr Molenaar be appointed a director. Accordingly, I have grave doubts that in fact the applicant ever truly became a director within the legal meaning of that phrase. The applicant stated that he worked 12 hours a day five days a week, that additionally he often worked on Saturdays and Sundays. His job was to manage a small hotel and there was never any criticism as to his competency or the manner in which he performed his work. It was the evidence of the applicant that he was to approach existing hotels and motels to attempt to obtain contracts. for the respondent company to manage and run those hotels. It was the evidence of the applicant that in September a Mr Cooper joined as a property consultant to the respondent group. Mr Cooper allegedly was on a similar package and also was to get shares, as was the applicant. It was the evidence of the applicant that during his initial conversations and shortly when he was to become a director of the respondent with Mr Balsiger, Mr Balsiger was to transfer to the respondent a share worth $7500. No proof was offered to this court nor indeed to the applicant as to how that value was ever arrived at. Shortly after Mr Cooper arrived it was the evidence of Mr Molenaar that he was asked for a capital injection. Apparently Mr Cooper declined the offer and left the scene. It was the evidence of the applicant that during the course of his employment Mr Balsiger stated that he was experiencing cash flow problems and that he would downgrade the applicant's salary from $40,000 to $30,000 a year but that this was to be short-lived. Mr Molenaar protested at this and to my mind never agreed to accept the lower salary of $30,000. It was the evidence of the applicant that the last time he received payment was on 26 August 1995 and from then until the last day worked, which this court finds to be 18 October 1995, the applicant was not paid for his work. On 17 October 1995 there was a meeting with Mr Balsiger when it was indicated that Mr Balsiger was to visit the bank as he was having cash flow troubles, that he needed approximately the sum of $13,500 to cover printing, brochure printing costs and change of commercial premises rental costs. Mr Balsiger came back from the bank and on that day asked the applicant in his capacity as a director to sign a guarantee of the overdraft of the respondent company. Words to the effect were said by Mr Balsiger, "if you are not prepared to take risks you are no longer employed by the company. This is a serious threat." It was the evidence of the applicant that he discussed the matters with his wife and then on 18 October 1995 he advised Mr Balsiger that he was not prepared to sign the overdraft agreement as it would put his real estate in jeopardy. It was the evidence of the applicant that thereupon Mr Balsiger said, "If you don't sign you are fired, you are no longer a director and if you do not leave within five minutes I will call the police and have you removed." Mr Molenaar questioned the validity of the removal and asked if Mr Balsiger had the support of his board. Mr Balsiger allegedly responded that a meeting had taken place with the directors the night before and that he had in fact the support of the Hong Kong directors. The applicant was given no notice of a board meeting and in fact this court heard no evidence that the applicant ever attended a board meeting of the respondent company nor was privy to its financial position or its plans generally. The applicant contacted a director in Hong Kong and admitted to evidence as exhibit 3 in these proceedings a facsimile transmission from Kim Chui & Associates, stating: "Dear Jan, Thank you very much for your fax. I have not talked to Werner this week, therefore has no knowledge on decisions made or money transferred as stated in your letter." The facsimile continues: "Let us sit on it for a while and try sorting things out. I am aware that you are an asset to the company and we don't want to lose you. We realise that you have been living on your wife's earnings and your wife's income, which could be a bit tense. Let us just try to sort things out." To my mind that facsimile is indicative that this person, Kim Chui, was fully apprised of what was going on and the fact that the applicant was not in fact being paid and that the financial situation of the company more than likely was perilous. However, it seems to be that at no time was that information communicated to the applicant. Exhibit 4 in these proceedings is a letter from the applicant's solicitor, Mr Payne, STATING starfinrg that proceedings would be taken in this court. Exhibit 5 is a response received from Werner Balsiger dated 22 October 1995 stating that further claims to any such proceedings would be strenuously resisted. Exhibit 6 in these proceedings was a further letter from Gillis, Payne & Co seeking further particulars from the respondent. Exhibit 7 in these proceedings was a letter from Gillis, Payne sent upon the instructions of the applicant to the managing director of Sun Gardens Hotels expressing disappointment that nothing further had eventuated. On 20 October 1995 as a result of legal advice received the applicant signed a resignation of a directorship, that being tendered to the court as exhibit 8. However, it was the evidence of the applicant that he had in fact already been terminated. He stated he had done nothing wrong and with regard to exhibit 1 in these proceedings which was the contract of employment it was the evidence of the applicant that it was stated by Mr Balsiger that that agreement would be torn up and that it was only an interim measure that would be in place until the business relationship had settled down. Exhibit 9 in these proceedings was a document dated 14 October 1995 which was a letter on letterhead, unsigned, setting out the financial arrangements between the parties, particularly detailing the shares allegedly worth $7500 each. It was the evidence of the applicant, and I repeat this, that these share transfers were to be part of a complicated salary arrangement entered into between the applicant and the respondent. Exhibit 10 in these proceedings is a result of a subpoena issued by Mr Joe Gilles indicating that at the end of November 1995 the respondent had some $3300 odd overdrawn in its current account. Exhibit 11 is a letter from the ANZ Bank obtained by way of subpoena to that bank by Mr Gilles indicating the overdraft arrangements to be put in place with the respondent company. I am alarmed that that letter is contrary to the information given by Mr Balsiger during the course of business negotiations and does not seem to bear out the factual situation as outlined by Mr Balsinger. Exhibit 12 is a glossy brochure produced by the respondent company. Exhibit 13 is an Australian Securities Commission search noting the positions in this company held by Mr Balsiger and his wife, Mrs Jan Balsiger. Recent conversations the applicant attested to have been had with the respondent and Mr Balsiger indicating that the position has not changed, that the respondent still only has under contract one small hotel. I earlier indicated in light of the evidence the orders I proposed to make to Mr Gilles. It is the finding of this court that the applicant has been unlawfully terminated, that there was no valid reason within the meaning of section 170DE of the Industrial Relations Act. Further, it is a finding in this court within the section 170DC of this court the applicant, Jan Molenaar, was not afforded the opportunity to answer the allegations and I confirm the belief I expressed earlier that I can see no reason why the applicant should not receive the full amount of compensation. Accordingly I make the following orders: That the respondent pay to the applicant the sum of $20,000 within 21 days of today's date. Secondly, under section 376 the respondent pay to the applicant a salary at the rate of $40,000 from 25 August 1996 until 17 October 1996 within 21 days. I thirdly order that the respondent pay to the applicant the difference in salary between the amount paid and the amount due. In submission it is noted Mr Gilles has advised the court that from 25 July the salary of the applicant was unilaterally altered downwards. Accordingly, the third order is that from 25 July 1995 the respondent make good the difference due. I have reviewed the information presented by the applicant to the court. I am concerned that the applicant receive what is rightfully his and accordingly I join Werner Balsiger personally as a respondent to these proceedings upon application by Mr Gilles and in light of a submission made by Mr Gilles on behalf of his client I further join Mrs Jan Balsiger as a co-respondent in these proceedings. I certify that the previous seven (7) pages are a true and correct copy of the Reasons for Decision of Judicial Registrar Tomlinson as recorded in the transcript and revised by the Judicial Registrar.. Associate: J A Liston Date: 18 March 1996 Appearances Applicant: Mr J Gilles Giles Payne & Co. solicitors Respondent: No appearance