Industrial Relations Commission of New South Wales in Court Session CITATION : Ernest William Lloyd v Thermotest Australia Pty Ltd & Ors [2001] NSWIRComm 300 PARTIES : Ernest William Lloyd v Thermotest Australia Pty Ltd & Ors. FILE NUMBER: IRC 742 of 1999 CORAM: Haylen J Unfair contract - work performed for related group of companies - arrangement to employ applicant - original contract contemplates work in New South Wales - work performed in Singapore and New South Wales - respondent companies incorporated in Hong Kong - real and sufficient connection with New South Wales - jurisdiction established - respondents' solicitors ceasing to act - non appearance of respondents at final hearing - whether judgment of Commission in Court Session able to be enforced in Hong Kong as a Foreign judgment - appropriate approach to Hong Kong law - contract unfair at inception and as worked - reasonable notice - claim for withheld salary and underpayment - claim for value of shares provided in contract or arrangement but not delivered - contract and arrangement unfair - orders for payment of compensation made. CATCHWORDS : Practice and procedure - unfair contract - work performed for groups of companies - arrangement to employ applicant - respondent companies incorporated in Hong Kong - whether judgment of Commission in Court Session able to be enforced in Hong Kong as a foreign judgment LEGISLATION CITED : Industrial Relations Act 1996 s 106 Bostik (Aust) Pty Ltd v Gorgevski (No1) [1992] 41 IR 552 Chrysler Jeep Autmotive Distributors Australia Pty Ltd v Canberra Star Motors Pty Ltd (1997) 79 IR 452 CASES CITED : David Jones Ltd v Cukeric (1997) 78 IR 430 Perception Pty Ltd and anor v Myalong Pty Ltd and anor [2001] NSWIRComm 158, Peterson J Perrott v Xcellenet (1998) 84 IR 255. Rothman Distribution Services Ltd v Full Court of the Industrial Court of NSW [1994] 53 IR 157 at 160 HEARING DATES: 10/15/2001; 10/16/2001; 10/18/2001 EXTEMPORE JUDGMENT DATE : 11/26/2001 APPLICANT: Mr R. Alkadamani of Counsel SOLICITOR: Ms P. Costigan, LEGAL REPRESENTATIVES: Haywards RESPONDENTS: No appearance JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HAYLEN J 26 November 2001 Matter No. IRC 742 of 1999 Ernest William Lloyd v Thermotest Australia Pty Ltd and Ors. Application under s 106 of the Industrial Relations Act 1996. JUDGMENT [ 2001] NSWIRComm 300 INTRODUCTION 1 Mr Lloyd had long and senior managerial experience in the heat treatment industry performing work in the United Kingdom, Australia and Singapore. His association with the respondents ultimately led him to commence proceedings under s 106 of the Industrial Relations Act 1996 seeking orders declaring that his contract of employment, arrangement or collateral conditions or collateral arrangements with the respondent were unfair, harsh and unconscionable and against the public interest. He claimed that, for a lengthy period of time, he was substantially underpaid and, for a shorter but significant period of time, he was not paid at all. Acting upon legal advice, he ultimately demanded payment of what was owed to him and, when it was not forthcoming, his solicitors wrote to the respondents indicating that their repudiation of his contract had been accepted. In these proceedings, he seeks the payment of salary withheld from him by the respondents, the payment of 24 months' salary in lieu of notice and the sum of $50,000 as the worth of the five per cent interest in the second respondent which had been granted to him as part of his employment but in relation to which the share scrip had never been issued to him. 2 While it may seem curious, if not odd, that a senior manager would be subjected to underpayment for a significant period of time and then be not paid at all, those matters were simply the start of the curious course which this case took. Mr Lloyd's first response was to commence proceedings in the Supreme Court against Thermotest International Ltd and Thermotest Australia Pty Ltd. Those proceedings were filed in February 1999 and alleged that "International" was the employer or, alternatively, that "Australia" was the employer. He sought an amount of money representing underpayment of his salary and the value of his shares. A solicitor entered an appearance for both defendants. On 2 June 1999, Mr Lloyd's solicitor wrote to solicitors acting for the defendants and sought an assurance that "Australia" was not taking steps to wind down its business or to dissipate any of its assets. On 4 June 1999 solicitors for the defendants replied and on specific instructions from their clients denied that any such steps were being take by "Australia". In fact, on 2 June 1999, "Australia" was placed in administration. 3 When these proceedings were commenced in 1999 under s 106 of the Act, a firm of solicitors filed a Notice of Appearance for the second and third respondents. There were a number of interlocutory matters to which they attended. In January 2001, those solicitors on the record for the second and third respondents filed a Notice of Ceasing to Act. By March 2001, new solicitors were on the record for the second and third respondents. Throughout this period it seems that the first respondent did not file an appearance. This is undoubtedly explained by the fact that the first respondent was placed in liquidation in July 1999. 4 Preparation of the case continued with sporadic interlocutory arguments leading to the second and third respondents seeking a variety of orders by way of Notice of Motion filed in September 2001. That matter was listed for hearing on 8 October, which was then stood over until 15 October, the first day of the substantive hearing of the case which was listed for five days. That action became necessary because, on 3 October 2001, solicitors for the second and third respondents filed a Notice of Ceasing to Act. Although ceasing to act, as a courtesy to the Court, the solicitors made enquiries of the Managing Director of the second and third respondents to determine his intentions with respect to the matter. On 10 October 2001, they received a letter from the Managing Director of those respondents, which was in the following terms: I refer to our telephone discussion today and your enquiries as to whether or not we intend to instruct other lawyers to appear at the hearing on Monday. I confirm my advice that we do not intend to instruct other solicitors or appear at the hearing. If this information will assist the Court in any way, please provide a copy of this letter to the Court. The matter proceeded to hearing on 15 October in the absence of any legal or other representative for any of the respondents. 5 The status of the first respondent, and the decision of the second and third respondents related companies incorporated in Hong Kong, led me to enquire of counsel for the applicant whether there was any utility in maintaining the proceedings. During the hearing, extensive efforts were made by the legal representatives of the applicant to establish the status of a judgment of this Court and whether or not it could be recognised and enforced as a foreign judgment under the laws of Hong Kong. In the course of hearing argument on this matter, I was presented with both documentary and oral evidence, including copies of Hong Kong Ordinances. I formed the view that it was not necessary for me to finally determine that a judgment of this Court in this matter would be enforceable under the laws of Hong Kong against the second and third respondents, but rather took the view that, so long as I was satisfied that prima facie such a judgment might be enforced, I was prepared, if not obliged, to continue the hearing of the applicant's case. At the conclusion of argument presented by counsel for the applicant, I was comfortably satisfied on a prima facie basis that, either by Ordinance or the operation of common law in Hong Kong, a judgment for a specific sum of money in this jurisdiction could be enforced as a Foreign judgment against the respondents under the laws of Hong Kong. 6 At the commencement of the proceedings, counsel for the applicant announced that it was not proposed to continue against the first respondent. An oral application was made seeking discontinuance against the first respondent and I was subsequently supplied with a short written argument as to whether this was possible under the Rules of the Commission. I am of the view that, prior to the reading of the affidavits and while the Court was in the process of dealing with the absence of the second and third respondents from the proceedings, an application was effectively made under r 138, there being, in my view, no particular formality required to constitute an application for discontinuance, although usually such an application would be made by way of Notice of Motion. I also agree with the submission for the applicant that r 141(1) is sufficiently wide to permit an oral application for discontinuance being dealt with by the granting of leave to dispense with the requirement of filing a relevant notice of discontinuance. In the circumstances, I formally grant leave to the applicant to discontinue these proceedings against the first respondent and I also give leave to dispense with the necessity to file a Notice of Discontinuance under r 141. This appears to me to be the most practical course bearing in mind the fact that the first respondent has never appeared in the proceedings. HOW THE RELATED BUSINESS ENTITIES OPERATED 7 At this point, it is necessary to say something about the second and third respondents and their relationship to the first respondent as a matter of history for the purposes of this proceeding. Evidence before the Court showed that Thermotest International Ltd (the second respondent) owned 399,000 of the 400,000 shares issued by Thermotest Australia Pty Ltd (the first respondent). The ultimate holding company of the shares in Thermotest Australia Pty Ltd in 1996 was Carbandy Investments Ltd, the third respondent, because of its share ownership of Thermotest International Ltd. 8 The second and third respondents operated out of the same office address in Hong Kong and there were a number of references in the evidence to business arrangements in the first and second respondents being directed and handled by the third respondent. In this context, it is interesting to note that Mr Lloyd's 1991 contract was on the letterhead of Thermotest International Ltd and the letter recorded the offer of a position "in the newly formed Thermotest group of companies". He was then employed as Managing Director of Thermotest (Singapore) Pte Ltd. In a letter which followed shortly after he had confirmed to him that, as a founder member, he was to be a granted a five per cent shareholding in Thermotest (Singapore) Pte Ltd and Mannings Thermotest Pty Ltd. Although the companies had been formed, the share scrip had yet to be produced and he was assured that when it became available it would be forwarded to him for his personal file. Thermotest (Singapore) Pte Ltd was described as the head company for business in Singapore, Malaysia, Philippines, Indonesia and Thailand while Mannings Thermotest Pty Ltd was described as the head company for business in Australia, New Zealand, PNG and the islands of the Pacific. 9 Perhaps of more significance is the fact that, in July 1991, the Managing Director of Carbandy Investments Ltd, Mr Fraser, on Carbandy Investments Ltd letterhead offered Mr Lloyd the position of Managing Director of Thermotest (Singapore) Pte Ltd. He was offered the standard "expatriate package", and it was noted that the question of "equity" was proving difficult to deal with because of the probability of him returning to Australia in one or two years' time. In March 1992, a director of Carbandy Investments Ltd wrote to employees of Thermotest (Singapore) Pte Ltd, including Mr Lloyd, and did so on Carbandy Investment Ltd letterhead, making arrangements for their "valuable people" to be covered by Key-Man Insurance for the maximum envisaged bank loans in each location in which the company operated. Another document showing the involvement of Carbandy was a memorandum of 1995 from the group Managing Director, Mr Fraser, dealing with the Thermotest group re-organisation. It records that Mr Candeland had been appointed chairman of Thermotest International Ltd and would report directly to the Carbandy group board of directors. Under the re-organisation, Mr Lloyd was to assume responsibility for all sales and operations in the Asian/Pacific territory with the title of Managing Director (SEA). The organisational chart set out in the memorandum showed the group Managing Director, Mr Fraser, as leading the Asian/Pacific organisation with lines of authority to the companies in Australia, Malaysia, Singapore, Philippines and Indonesia. 10 A further memorandum of April 1996 from Mr Fraser as Managing Director of Carbandy Holdings Limited addressed to all Thermotest staff stated the subject to be the Carbandy group management re-organisation. Certain information was issued for the benefit of the entire Thermotest group. This document also noted that, in Thermotest Australia, Mr Garry Lloyd had been appointed Operations Director in charge of Thermotest's operation in Australia and New Zealand. In January 1996, on Carbandy Holding Ltd letterhead, a memorandum was sent to the Thermotest entities in Australia, Singapore, Malaysia, Indonesia and Europe, which stated that "as the Carbandy group expands" various forms of control would become necessary for the smooth working of the group. Therefore, a group financial policy was being introduced from 1 January 1996. Earlier, in January 1994, on Carbandy Investment Ltd letterhead, was a letter to Mr Lloyd whilst with Thermotest (Singapore), whereby the directors of Carbandy Investments Ltd acknowledged the personal guarantees which had been signed with the various banks on behalf of Carbandy's Thermotest subsidiary companies in Singapore and Malaysia. The letter of indemnity which was being given by Carbandy was to fully indemnify him against any claims which may or may not arise as a result of the guarantee. 11 A memorandum of June 1996 on Carbandy Investments Ltd letterhead set an agenda for a meeting of the group and also made arrangements for the meeting of the Thermotest group. There were a variety of documents under the Carbandy Group heading or Carbandy Investments Ltd dealing with re-organisation throughout the Thermotest entities, requiring Thermotest companies' financial returns to be signed, and listing a number of the Carbandy group companies, including Thermotest International Ltd and Thermotest "subsidiaries in Australia, Europe, Indonesia, Malaysia, Philippines, Singapore and South Africa". 12 In relation to the second respondent, Thermotest International Ltd, there are a number of business letters on its letterhead with the notation "member of the Carbandy group". A memorandum of December 1996 on Thermotest International letterhead advised that Mr Lloyd would be appointed Group Sales and Technical Director as part of changes to the organisational chart of Thermotest International. When Mr Lloyd was attempting to be paid for his work in Australia and, in particular, asked for the payment of $4,000 from the Australian firm, his claim was met by a letter from Thermotest International Ltd under the signature of Mr Fraser. Also in evidence were Minutes of an operations meeting of Thermotest International Ltd attended by Mr Fraser, Mr Lloyd and others in June 1996. In the course of that meeting, the Minutes noted that it was decided that Mr Lloyd's costs "must be paid for by the group". It also provided that when he left Australia, his costs were to be covered by the person who required his services, paying for flights, accommodation etcetera. 13 Overall, there were a number of documents which demonstrated that the Carbandy group operated in a co-operative, indeed integrated, manner in pursuing their business interests. The third respondent frequently made business decisions for the first respondent and the second respondent, altered their existing methods of operation, approved new methods of operation and made appointments to various senior positions in the group companies. A NEW SOUTH WALES CONNECTION 14 The matters discussed in the foregoing paragraphs are of importance for two reasons. Firstly, the Court has to be satisfied that there is a sufficient connection with the work being performed in New South Wales in circumstances where the remaining respondents are corporations operating overseas and under Hong Kong law. The second matter is that there was material put before me to indicate that a judgment of a Court in New South Wales might not be enforceable in Hong Kong if the appearance in the foreign court was simply to challenge jurisdiction of the Court or where there had been no appearance. 15 In the present case, firms of solicitors acting for the second and third respondents had filed unconditional Notices of Appearance. On two occasions, instructions had been withdrawn from those solicitors but during the course of the period they were on the record there are a number of interlocutory directions which were dealt with by the Court and, in fact, quite close to the hearing time solicitors acting for the second and third respondents had filed a Notice of Motion seeking certain orders in relation to Notices to Produce, interrogatories and the like. Correspondence from the second and third respondents indicated that they were aware that the hearing was proceeding but that they did not propose to instruct new solicitors to act for them in that hearing. There was also evidence that one of the firms of solicitors instructed had given consideration to the question of jurisdiction and the possibility of filing a Notice of Motion contesting jurisdiction but, before doing so, sought counsel's advice. After receiving counsel's advice there was no challenge to jurisdiction, and an unconditional appearance was entered and continued. 16 The respondents had filed affidavits in accordance with the Court's timetable, which raised only issues of merit and did not raise any issue in relation to jurisdiction. That timetable had expired: all the affidavit evidence to be relied on by the parties was filed and served shortly before the commencement of the hearing. In those circumstances, I am satisfied that, at all relevant times, the second and third respondents have filed an unconditional appearance in these proceedings and that at no stage, including to the close of the timetable for the filing and serving of affidavit evidence, had there been any issue raised by the respondents as to the jurisdiction of the Court to deal with the applicant's summons for relief under s 106 of the Act. A CONTRACT WITH THERMOTEST 17 In 1968, Mr Lloyd commenced employment with a company called Cooperheat Ltd in the United Kingdom. That company was involved in on-site heat treatment. In 1977, he came to Australia to set up Cooperheat Australia with a Peter Candeland (who was later to become group Managing Director of the second respondent). Mr Lloyd remained in Australia until 1988 and obtained permanent residency in Australia. In 1988, he was seconded to Singapore to head a franchise that was being set up in that country. In early 1991, he was approached by Mr Candeland, who had by that stage left Cooperheat and had joined with a Mr Fraser and a Mr Smillie, to create a company called Thermotest International. This company was to specialise in heat treatment. 18 As a result of discussions, Mr Lloyd was flown by Thermotest International from Singapore to Hong Kong to pursue talks with Fraser, Smillie and Candeland. In the course of those discussions, he was offered the position of Managing Director, Thermotest (Singapore), which was to encompass the Asian groups of Thermotest International. It was agreed that he would be paid S$120,000, together with payment of public utility bills, his daughter's schooling costs, fringe benefits tax reimbursement, return visits to Australia and re-location expenses. Importantly, Mr Lloyd made two other stipulations: firstly, the respondents were to open an office in Australia where he proposed to work, because he had to maintain residency in Australia for citizenship purposes and must return within five years; secondly, his son was currently working for Cooperheat Australia and he asked that he be offered a job with Thermotest Australia once it was formed. These two stipulations were agreed to, an Australian office was established and his son was offered and took up a position with Thermotest Australia. 19 In July 1991, he received a draft contract of employment from Fraser on the letterhead of the third respondent. Being unhappy with the original contract offered, which did not meet the terms he had orally agreed, there were further discussions and, in September 1991, he was offered another contract of employment, this time on the letterhead of Thermotest International Ltd, the second respondent. In that letter, he was offered equity in the Singapore company plus Australia, or equity in the head company, the second respondent, Thermotest International. The employment offer was for a position in the "newly formed Thermotest group of companies". It was always part of the agreement that Mr Lloyd would be returning to Australia and that was confirmed by a letter of 15 July 1991 on the letterhead of the third respondent signed by its Managing Director. 20 Mr Lloyd agreed to commence work with the second respondent on 1 November 1991 as Managing Director of Thermotest (Singapore) Pte Ltd. He was to manage Thermotest throughout Singapore and to generate business in the South East Asian area. Consequently, Thermotest Malaysia Ltd, and Thermotest Philippines (Malaysia) Ltd and Thermotest (Indonesia) Ltd were established. 21 The offer of employment made to him confirmed that he would be paid on the Carbandy group standard "ex patriate package". On 12 November 1992, he was advised by the second respondent that his remuneration package had been increased by 10 per cent, bringing his director's fees to S$132,000. This reference to "director's fees" was later accepted by all the parties to be a reference to salary. 22 During 1994, the company as a whole, was not trading as profitably as had been hoped and the applicant transferred to Kuala Lumpur but otherwise his position remained the same. In January 1995, the Carbandy group board of directors re-organised group operations in the Asia Pacific territory. In that re-organisation, Mr Lloyd was specified to assume responsibility for all sales and operations in the Asia Pacific territory with the title of Managing Director. RETURN TO AUSTRALIA 23 In early 1996, Mr Lloyd decided it would be an appropriate time for him and his family to return to Australia on the basis that he would continue to travel to Asia from Australia and remain in charge of sales and marketing whilst being responsible for special projects and training of personnel. This decision, which was approved, appears to have caused some concern to those in Australia and he was sent a set of "ground rules" for his return to the Australian operation. This led Mr Lloyd to write to Mr Fraser in March 1996 concerning his understanding about his role and his entitlements in the company. In that letter, he re-stated the two stipulations he had made for joining the group in 1991 and further stated that his proposal to return to Australia with his family was purely and simply as a cost cutting exercise to assist the company. He understood that his costs would still be borne by Malaysia but would be offset by Australia for any increased revenue that he produced. In April 1996, on the letterhead of Carbandy Holdings Ltd, a memorandum was sent to all Thermotest staff by Mr Fraser as group Managing Director announcing a number of changes but, in particular, the return of Mr Lloyd to Sydney, being responsible for special projects and other matters for Thermotest International, but to be used for the benefit of the entire Thermotest group. 24 In December 1996, it was announced that there would be changes in the organisation of Thermotest International. Firstly, Thermotest International was to be "steered" by the current four directors namely, Mr Fraser, Mr Smillie, Mr Campey and Mr Lloyd. In addition, Mr Lloyd was appointed group sales and technical director and would be responsible for ensuring that all special projects were completed on schedule and within budget. Mr Lloyd had returned to Australia by the end of May 1996 and had commenced employment in Australia in June 1996, based in the Sydney office. 25 In April 1997, Mr Lloyd received a proposal from Mr Fraser to vary his employment apparently because of tension between Campey and himself. There was a proposal to move to Melbourne and to look after particular regions of Australia rather than staying in Sydney. Mr Lloyd rejected the proposal and replied to Fraser setting out again the basis of his agreement to join "Carbandy as one of the founder directors of the Thermotest group", namely, that it was necessary for him to return to Australia at the start-up of Thermotest in order for him to maintain his permanent residency. There had never been any suggestion that this matter was in doubt. This continued reference by Mr Lloyd to "returning to Australia" appears to be a reference to returning to Sydney. Mr Fraser kept on pressing him and sought that Mr Lloyd put forward a proposal for change, which brought about a further reply from Mr Lloyd at the end of April 1997. In the course that correspondence Mr Lloyd stated: As agreed I now reside back in Sydney, working as planned on behalf of Australia and Asia. 26 A further proposal was then made by Mr Fraser for Mr Lloyd to move to Melbourne and pointing out to Mr Lloyd that the status quo was no longer acceptable. A further letter from Mr Fraser at the end of May 1997 spoke of the expectations of the group and proposing certain methods of operation if he elected to continue to work out of Sydney. Amongst those matters, it was stated that the remuneration would remain unchanged, his status as a director of the second respondent would remain unchanged and "your shares in TIL (the second respondent) would remain unchanged". Mr Lloyd was inclined to accept this offer and sent a letter to Mr Fraser specifying certain matters so there was no misunderstanding and then raised the following matter: My shares in TIL which you say would remain unchanged accordingly are according to my record five per cent. In relation to these shares, I would like to be issued with a share scrip in relation to these share entitlements. Mr Fraser replied stating that the details of Mr Lloyd's employment package would now be determined by Mr Campey as Managing Director of Thermotest Australia. Mr Lloyd was encouraged to take these matters up with Mr Campey "… for the best for the Group and yourself". 27 On 27 August 1997, Mr Lloyd received a letter from Mr Campey offering him a different position, that of Sales Director with Thermotest Australia. The remuneration was said by the applicant to be less than the remuneration he had agreed to. On 6 September, Mr Campey again wrote to Mr Lloyd advising him that all previous offers of variation of his position had been rescinded and that the only offer on the table was that contained in the letter of 27 August 1997. On 8 September, Mr Lloyd advised Mr Campey that he was obtaining legal advice. 28 On 19 September 1997, Mr Campey, by facsimile, advised Mr Lloyd that he was unable to pay any wages until early October 1997. Mr Lloyd then instructed solicitors who, on 23 September, wrote to Mr Campey at Thermotest Australia (the first respondent) pointing out that the original contract of 1991 was still on foot with an increase in salary operative from January 1993. The letter asserted that that salary remained Mr Lloyd's entitlement under the contract and that he had not agreed to any other position. The letter also raised the fact that since 1991 Mr Lloyd had been underpaid an amount of $158,550 and payment of that amount was sought within 14 days. 29 Mr Lloyd's solicitors received a reply to their letter from Mr Fraser as Managing Director of Thermotest International Ltd. That letter referred to the firm's letter which was addressed to Mr Campey of Thermotest Australia and pointed out what were said to be important facts: firstly, the letter should have been addressed to Thermotest International Ltd; secondly, that Mr Lloyd was currently "deemed to be acting as a consultant to Thermotest through a family business by mutual agreement". In that letter, Fraser rejected that there was a sum of $158,550 owing to Mr Lloyd and raised a potential Malaysian tax liability owed by Mr Lloyd. 30 Because of the absence of payments of salary, Mr Lloyd apparently made a request for the payment of $4,000 from the Australian firm which was met by a facsimile from Mr Fraser dated 3 October 1997. That facsimile stated: I understand you have requested payment of $4,000 from Australia but I regret to inform you that no further payments will be made to you until the current impasse is cleared. I refer to: 1) Litigation which you have initiated. 2) Correct and legal invoicing from your company to TIL. 3) Current taxation problems. 4) Reconciliation of your various current accounts which show that you owe us HK$68,749. Refer to attached statement. Once we have reached agreement we will have a firm arrangement put in place. 31 Mr Lloyd gave evidence that he continued to perform his normal duties on sales, marketing and special projects for the group but that he was not paid a salary from the end of August 1997 to 24 November 1997. On 14 November 1997, Mr Lloyd's solicitor wrote to Mr Campey advising that Mr Lloyd was continuing to perform his normal duties notwithstanding the refusal of the company to continue to pay his wages which had ceased several weeks before. The letter stated that, unless Mr Lloyd was paid his normal wages within seven days, he would treat the company's conduct of refusing to pay salary as a repudiation of their obligations under the contract of employment with Mr Lloyd and Mr Lloyd would accept that repudiation. Payment of the whole of the outstanding salary was demanded. No reply was received to that letter. On 24 November 1997, Mr Lloyd's solicitors again wrote to Mr Campey drawing attention to their letter of 14 November and the fact that the company remained in breach of its contractual obligations to pay Mr Lloyd his normal wages. The letter then advised that Mr Lloyd accepted the company's repudiation of his contract and therefore the contract of employment was terminated at the company's initiative. Mr Lloyd gave evidence that he was not paid any money in lieu of notice and had not been paid out his annual leave entitlements nor his long service leave. 32 Mr Lloyd gave evidence of his participation in the meeting of the group in June 1996 where it was decided and minuted that his costs would be paid for by the group. He was a Director of the second respondent and understood from the way in which the group operated that this reference to "the group " was a reference to Carbandy Investments Ltd together with Thermotest International Ltd (the second and third respondents). He stated while he performed work in New South Wales in 1996 and 1997, Thermotest International made many of his salary payments. The inter-relationship of the companies within the group was said to have been demonstrated by a number of documents sent to Mr Lloyd on the letterhead of Thermotest International Limited but signed Mr Candeland in his capacity as "group Managing Director". Mr Lloyd's evidence was that he had discussions with Mr Fraser about the economic viability of Thermotest Australia and about his coming to Australia to perform his role in New South Wales. It was against that background that the decision was taken that his work would be paid for by the group, being Carbandy Investments and Thermotest International. 33 When Mr Lloyd arrived back in Australia at the end of May 1996, Mr Fraser asked him to set up an office at home with a facsimile machine and telephone line as he would be dealing with the Thermotest group of companies and he would need to be contacted outside of Sydney business hours. He estimated that during 1996 approximately 45 per cent of his work was performed in New South Wales either from his own office, the Sydney office or on site. During 1997, he estimated that over 70 per cent of his work was performed in New South Wales. 34 The applicant presented evidence as to underpayments in the following way. For the period 1 January 1993 to 1 October 1994, the applicant was underpaid S$21,000. For the period 1 October 1994 to 31 January 1995, there was no underpayment: these payments tend to confirm other underpayments. For the period 1 February 1995 to the end of May 1996 the applicant was paid S$80,600. At the end of May 1996, the applicant returned to Australia. The applicant's entitlement in Australia was $7,000 per month salary plus $1,000 per month car allowance plus S$1,000 per month payment to the provident fund or an Australian superannuation fund. The applicant's employment in Australia covered 1 June 1996 to 20 November 1997. For the period 1 June 1996 to 20 November 1997, the applicant was underpaid $91,499. Using a conversion rate justified by exchange rates in evidence it was submitted for the applicant that the two periods of underpayment in Singapore dollars equated to $A96,764. Therefore, the total underpayments were $A188,263. 35 The applicant provided evidence of the worth of the second respondent by reference to its most recently available annual report. The net worth of the company in Singapore dollars was established and an exchange rate favourable to the respondent was chosen to make a calculation that the value of a five per cent shareholding in Thermotest International, the second respondent, amounted to $50,000. The applicant claims that amount as part of the original contract in circumstances where, although he from time to time asked to be provided with share scrip, the share scrip was never passed over to him. There was nothing in the arrangement concerning this five per cent interest which restricted his use of those shares or required them to re-vest in any of the respondents in specified circumstances. It was submitted on behalf of the applicant that he was free to deal with those shares as he saw fit. DELIBERATION 36 From all of the evidence I have considered (not all of which has been referred to in the course of this judgment), I am satisfied that there was an arrangement between the three respondents and the applicant to conduct the business of on-site heat treatment in a number of countries, including the State of New South Wales in Australia. The third respondent, Carbandy Investments Ltd, frequently acted in the role of the employer of the applicant and made many decisions relating to the terms and conditions of his employment. The second respondent, Thermotest International Ltd, held itself out as being the employer of the applicant when his solicitors made a demand for payment of salary against the Australian firm, the first respondent. Mr Fraser, in his role in the Carbandy group, offered the applicant the position of Managing Director of Thermotest (Singapore). There was also evidence that in 1992 Mr Lloyd's salary was paid directly into his bank account by a subsidiary of the third respondent, a firm known as Eastern Technical Services. Further, in 1994, Fraser submitted a tax return on Lloyd's behalf but apparently without his knowledge, naming Eastern Technical Services Pty Ltd as the employer. Yet Eastern Technical Services was a subsidiary of the third respondent not of the second respondent. 37 In many respects, this evidence is confusing but one thing that does come clearly through this cloud of confusion is that both the second and third respondents were involved in an arrangement whereby the applicant was employed in the on-site heat treatment business. I am also satisfied that, at the commencement of that arrangement in 1991, Mr Lloyd required two conditions to be met before he would accept the appointment being offered to him. One of those conditions was that an Australian firm had to be established within five years and that was clearly because, as he stated, he needed to return to Australia within that period in order to retain his citizenship. It was therefore always contemplated that Mr Lloyd would perform work in Australia as part of his original contract and that Sydney was to be the location of his Australian work. 38 The first respondent was duly incorporated and began to trade in Australia. It had offices in Sydney and, in accordance with the agreement, although perhaps in circumstances not contemplated in 1991, Mr Lloyd came back to Australia working in those offices in Sydney, out of his Sydney home and also performing on-site work for all of the respondents. In 1996, almost half of his work was in New South Wales and by 1997 a significant majority of his work was in New South Wales. 39 Bearing in mind the principles laid down by the Commission in Court Session in Chrysler Jeep Automotive Distributors Australia Pty Ltd v Canberra Star Motors Pty Ltd (1997) 79 IR 452 and Perrott v Xcellenet (1998) 84 IR 255, I am satisfied that there is a real and sufficient connection with New South Wales such as to attract the jurisdiction of the Commission under s 106 of the Act (see also Perception Pty Ltd and anor v Myalong Pty Ltd and anor [2001] NSWIRComm 158, Peterson J). I have reached this conclusion quite independently of the apparent agreement of the parties as to jurisdiction. 40 In relation to whether or not the contract was unfair, it is to be noted that the 1991 contract contained a clause providing for three months' notice. In my view,the provision of three months' notice was unfair and probably "manifestly unfair" as submitted by the applicant. He was from the outset a very senior person in the undertakings. He was appointed as the Managing Director of the Singapore firm. He was one of the four directors who were to steer the group and he was considered sufficiently important that the group took out "Key Man" insurance in relation to him and three of the other directors. He was given a special role in relation to sales in the Asia Pacific region and in Australia in particular. He had given personal guarantees in respect of various subsidiaries and had travelled in furtherance of the objectives of the group. At the time of his termination he had been employed for just over six years. He was 53 years of age. In those circumstances, three months' notice, a period which had not been reviewed since the initial contract of 1991, was so inadequate as to be unfair. I am, however, unable to accept the applicant's claim that, in a case such as this, the appropriate range is between 20 and 24 months' notice. This is not a case like David Jones Ltd v Cukeric (1997) 78 IR 430, where the upper limit of the range regarding notice is warranted. In this particular case, I am of the view that an appropriate and reasonable period of notice would be nine months' at his full salary. 41 The question of underpayments required closer analysis. I am satisfied on the evidence presented that there were underpayments over a long period of time and that the applicant made efforts to have the situation rectified. A contract or arrangement which permitted the participants to make a unilateral decision whether or not to pay the applicant's salary and, if so, how much and when, is beyond argument unfair (see Rothman Distribution Services Ltd v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157 at 160). This contract or arrangement in its operation became unfair. Because of the absence of the respondents, I have been placed in the difficult position of having to consider the applicant's claim without the assistance of the argument of the respondents. That, however, is a course which the respondents have elected to follow, even though they were represented by solicitors until just prior to the hearing. I have noted the source material and the applicant's evidence as to how the underpayment is calculated. The applicant appears to have chosen a reasonable rate of exchange to convert the Singapore underpayments to Australian dollar amounts. From a consideration of that material it is, at the very least, arguable that the amount of $188,263 is due to the applicant. I am unable to see any reason to depart from the applicant's calculations. I am therefore prepared to order that the amount claimed for underpayment of salary be paid by the respondents to the applicant. 42 The last matter relates to a claim for $50,000 representing five per cent of the worth of the second respondent, Thermotest International. As indicated earlier in this judgment, the applicant has put into evidence and relied upon material which provides a rational basis for valuing the business and supporting the claim made. Again, on the evidence provided by the applicant, I am unable to see any reason for departing from the calculations made. There was no material to suggest any limitation on the use which could be made of these shares by the applicant. In the absence of being provided with the share scrip, I accept that the applicant should be paid the value of those shares, which I accept to be $50,000. 43 It is appropriate that I say something about the task of calculating the orders for the payment of money in a case where the expected contradictor does not appear. This position is not dissimilar to cases where, in contested proceedings, no issue is taken with calculations made by the applicant. For instance, in Bostik (Aust) Pty Ltd v Gorgevski (No 1) [1992] 41 IR 552 a Full Court of the Federal Court, on appeal, dealt with a challenge to the damages awarded at first instance on the basis that there had been a harsh, unjust or unreasonable termination of employment. In the proceedings below, no issue was taken as to the amount of damages payable should the applicant succeed on the issue of breach of contract. The trial judge made some deductions from the claimed figure to avoid double counting and to account for the vicissitudes of life, but otherwise accepted the calculations submitted for the applicant, and did so on the basis of "making the best assessment I can on the evidence before the Court …". The amount of damages was not reduced on appeal. The whole of the court concluded that there was no error in the trial judge's approach to the calculation of damages even though the award was considered to be " … unquestionably a high one". Having regard to the material before the trial judge and the fact that there was no relevant cross-examination and an absence of a submission challenging the applicant's assessment of damages, the Full Court was not prepared to intervene on appeal. In the present case, I have given consideration to the material tendered by the applicant in support of his claims for the payment of outstanding salary and the value of the shares given to the applicant as part of his contract of employment. In the absence of the respondents, I have, to adopt the words of Keely J in Bostik, made the best assessment that I can on the evidence before the Court. 44 I am aware of the need for there to be a specific sum ordered by the Court in order that the judgment against the second and third respondents may be entered and enforced as a Foreign judgment under Hong Kong law. I therefore direct that the applicant bring in a Short Minute of Orders reflecting the matters determined in this judgment, together with a specific amount for costs to be calculated on a party-party basis and a specific amount for interest calculated at the Supreme Court rate. The matter may be relisted for the purpose of making final orders by arrangement with my Associate. 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