Industrial Relations Commission of New South Wales in Court Session CITATION : Norris v Cleaning Wizard (QLD) Pty Limited & Anor [2000] NSWIRComm 135 APPLICANT: Geoffrey James Norris FIRST RESPONDENT: PARTIES : Cleaning Wizard (QLD) Pty Limited ACN 078 198 451 SECOND RESPONDENT: Michael David Nye FILE NUMBER: 3699 of 1999 CORAM: Schmidt J CATCHWORDS : Unfair contract - franchise agreement - allegations as to misrepresentations prior to agreement being entered - unfair conduct in tendering for work - failure to provide sufficient marketing support - inadequate remuneration for work - failure to provide work - comparisons between payments under agreement and award - contract found unfair in relation to failure to provide work - no case made out against second respondent - contract varied to provide for termination upon notice and to reduce franchise fee LEGISLATION CITED : Industrial Relations Act 1996 Swann & Anor v Ultratune Aust. Pty Ltd & Anor (1983) 5 IR 284 CASES CITED : Walker v Industrial Court of New South Wales & Anor (1994) 53 IR 121 Brown v Rezitis (1971) 127 CLR 157 HEARING DATES: 04/06/2000; 04/07/2000 DATE OF JUDGMENT: 08/01/2000 Ms Judith Keys of counsel SOLICITORS: Hosie McGarvey & Lord Solicitors LEGAL REPRESENTATIVES: Mr Brian Lacy of counsel SOLICITORS: Fetter Gdanski Solicitors & Consultants JUDGMENT: - 51 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 1 August 2000 MATTER NUMBER IRC 3699 OF 1999 GEOFFREY JAMES NORRIS v CLEANING WIZARD (QLD) PTY LIMITED & ANOR Application under s106 of the Industrial Relations Act 1996 JUDGMENT 1 This application was brought under s106 of the Industrial Relations Act 1996 ('the Act'). The proceedings were brought by Mr Norris against Cleaning Wizard (Queensland) Pty Limited (' Wizard '), the franchisee and Mr Michael Nye, at one time Wizard's master franchisee. 2 The orders sought in the summons were: '1. An order declaring void ab initio the whole of the contract between the Applicant and the First and Second Respondents whereby the Applicant was granted the right to establish and operate a business known as "Cleaning Wizard" with effect from 9 February, 1998 for a period of 10 years. 2. Further, in addition an order that the First and Second Respondents pay to the Applicant such an amount of money as fairly and adequately compensates the Applicant for the financial and other detriment's suffered by the Applicant as a result of the unfair operation of the contract referred to in order 1 above. 3. Such further or other orders as the Commission in Court Session considers just or reasonable. 4. An order that the First and Second Respondents pay the Applicant's costs. 3 The orders finally advanced at the hearing were: '1. A declaration that the franchise agreement entered into by the Applicant on 9 February 1998 with the First Respondent is void ab initio, and further order that the First Respondent, within a period of 28 days, assign to the Applicant all outstanding rights, entitlements and obligations arising under the cleaning contracts with: (a) Best and Less, Ballina; and (b) the Ballina Shire Council pertaining to the Ballina Airport. 2. The First Respondent pay to the Applicant the following amounts of money as compensation for the financial detriments suffered by the Applicant as a result of the unfair operation of the said franchise agreement and as a consequence of the declaration that the franchise agreement is void ab initio: (a) $1,500, being refund of the deposit; (b) $15,000, being refund of the amount paid by the Applicant toward the franchise fee; (c) $10,503.76, being refund of royalties retained by the First and Second Respondents; (d) The total amount of payments received by the First and/or Second Respondents in respect of the Applicant's performance of the contracts referred to in orders 1(a) and 1(b) from & including March 2000 until order 1, & the assignment referred to therein, has effect; (e) $50 being refund of the fine imposed on the Applicant by the First Respondent as a consequence of his non-attendance at a conference in mid-1999; (f) $1,100 being refund of the amount retained by the First Respondent from money due to the Applicant as costs for a conference in November 1999 which the Applicant did not attend. The evidence 4 Given the various allegations of unfairness advanced by the applicant and how they were developed in the proceedings, it is necessary to give some detailed attention to various aspects of the evidence and the submissions. 5 Mr Norris and Mr Nye each gave evidence. Evidence was also called by the respondents from Gary Collins, Director of the First Respondent and Cleaning Wizard Australia Pty Ltd and also Regional Manager for northern New South Wales and southern Queensland; and Graeme LeBransky, formerly a director of Cleaning Wizard Australia Pty Ltd and now a consultant to the company. A number of documents were also tendered. 6 Mr Norris' evidence was that he had responded to an advertisement placed by Wizard for cleaning work in the Northern Star in 1997. He telephoned Mr Nye and later met him on a number of occasions to discuss the franchise opportunity Wizard was offering in northern New South Wales. At the outset, he was told that he would start off with a couple of cleaning jobs and would get more from Wizard when he put his hand up. He signed a confidentiality agreement and was then provided with various documents, including the franchise agreement and disclosure document. 7 Mr Norris received legal advice on the agreement, as a result of which various aspects of the agreement were clarified, particularly that Wizard would get him work. He was advised that: '3) You are quite right this omission is in error. We will include in the schedule of our agreement a covenant whereby we assume the prime responsibility to provide contracts for you. (The fee for this is included in the Royalty).' 8 Mr Norris executed the agreement in February 1998 at his solicitors' office and then attended a training course conducted by Wizard in Melbourne, which took 2 weeks including 4 or 5 nights helping other franchisees on the job and for which he paid $1,500. 9 Contrary to the franchise agreement, Mr Norris refused to pay the $40,000 franchise fee. His evidence was that this was on legal advice, that he should make no payment until he had received work from Wizard. In March 1998 he paid Wizard $15,000 after discussing his position with Mr Graeme LeBransky and Mr Bill Bateson while attending the training course in Victoria. He never paid the balance of this fee however, which remains outstanding. 10 In March and April 1998, Mr Norris and Mr Nye pursued work in his franchise area. In April he obtained a contract for a builders clean at Best and Less in Ballina, then a contract for a regular clean of the premises for 6 weeks. A tender for ongoing work at the store was also accepted. Mr Norris' view was that the price for this latter contract was too low. It was based on two hours cleaning per day. On his evidence however, initially the work took he and his wife 2 hours per day, a total of 4 hours work which they later reduced to a total of 3 hours each weekday, for a price of $267.31 per week. 11 In July 1998, Mr Norris obtained a contract for cleaning Ballina Airport. The estimate tendered was for 22½ hours per week in total for Mr Norris and his wife to perform the work. Mr Norris' evidence was that after 10 months, the work was taking them 41 hours to perform. The price was $674 gross per week. 12 Under both contracts payment was made to Wizard, which deducted 13% royalty from the total of $941 per week, and deposited the balance into Mr Norris' account by electronic funds transfer. While Mr Nye was the master franchisee, he received about half of this royalty payment. Payments were made fortnightly by the airport and monthly by Best and Less, although at one time they were made weekly. Deducting his expenses of about $194, the applicant estimated he was left with $524 net per week . 13 The applicant had pursued further work with the respondents on various occasions without success. In March 1999, he instructed his solicitors to write to Wizard advising that he proposed to initiate these proceedings. 14 In June 1999, he agreed to assist Wizard obtain a tender from BiLo in Alstonville, but later refused the work when offered the contract. 15 Mr Nye's evidence was that he was a master franchisee for Wizard in Queensland and northern New South Wales from April 1997 until some time in November 1998, when he surrendered the master franchise, due to personal and financial circumstances. He thereafter continued operating a Wizard franchise in southern Queensland. 16 Mr Nye placed the advertisement to which Mr Norris responded when he was asked by Wizard to tender for a cleaning contract for Franklins in Lismore. He was cross examined in detail as to various representations made in the advertisement. Mr Nye denied telling Mr Norris when they first met that Wizard had existing cleaning contracts in the area. His evidence was that he told Mr Norris that Wizard was associated with Franklins in other States and was fairly confident of winning a tender which he was pursing, but all they had at that stage was a request to submit that tender. In his view, Mr Norris clearly understood the position that Wizard was just starting up in Queensland, even the ad referred to tenders, not contracts. 17 Mr Norris disputed this evidence. On his evidence the first occasion upon which he understood that the only work Wizard had in the area was the Franklins tender, was after he had executed the franchise agreement, when he was travelling with Mr Norris pursuing potential work and said to him 'Tell me the truth now, there isn't any work is there?' and Mr Nye replied 'No we never got the job we were supposed to'. In cross examination, however, Mr Norris could not recollect what it was that Mr Nye earlier said, which had given him the impression that there was existing work in the area. He did recollect Mr Nye telling him that the area was new, that he was seeking to establish work there and that it would not develop very quickly. Nevertheless, on his evidence Mr Norris had an impression that work already existed when he entered the agreement. 18 Mr Nye agreed that he had discussed potential earnings with Mr Norris before he entered the franchise agreement, but had told him that this depended on the work and effort put into the business by Mr Norris and that physical involvement in the business was important. Both Mr Norris and Mr Nye agreed there were no actual figures discussed, but hypothetical situations in the context of the projected profit and loss figures in the disclosure documents were discussed. When Mr Norris asked about the tender prices of contracts which Mr Nye had, he was told that the prices varied according to the size of the store and that the price for the Franklins store was $700 to $800. 19 Mr Nye also agreed that the provision of work by Wizard had been discussed, but regarded his comments as having been put out of context by Mr Norris. Mr Nye's evidence was that he told Mr Norris that new franchisees started off with one or two jobs and that when he was on top of that work and indicated that he wanted more, he would be able to obtain it, if it was available. Growing the business by employing staff was also discussed, but Mr Nye denied that he had suggested that this could occur quickly. He told Mr Norris that developing his business would require hard work by him, by Mr Nye and Wizard, who would provide a lot of support in seeking out and preparing tenders. Mr Nye denied promising any contracts to Mr Norris. 20 Mr Nye had at least five meetings with Mr Norris before he entered the agreement, spending some hours explaining the requirements of being a franchisee and the positive and negative aspects of that role. Mr Nye regarded Mr Norris as cautious and doing his homework during this period. 21 Mr Nye was keeping Mr Graeme LeBransky informed of the discussions and eventually asked him to ring Mr Norris, who then pursued further discussions with Mr LeBransky. Mr Nye said that he told Mr Norris that the franchise fee was $40,000. Mr Norris denied this, saying he already knew what the fee was and that he had rather asked Mr Nye when Wizard would want it paid and Mr Nye had told him 'They haven't asked for it yet. Don't worry about it, they will catch up with you later.' 22 The discussions between Mr Norris, Mr Nye and Mr LeBransky took place over some five months in total before Mr Norris executed the franchise agreement. Mr Nye continued pursuing tenders during that time, unsuccessfully. In his view, having no franchisee in place made it difficult for him to succeed. Mr Norris' evidence was that the possibility that the establishment of the Franklins tender was jeopardised by he not having become the franchisee in the area had never been raised with him. He had assumed that the cleaning work at Franklins was not due to commence until some time in the future. 23 Mr Nye said he had also emphasised to Mr Norris the importance of sharing his local knowledge with Wizard. Mr Norris never did so and did nothing on his own to chase work. Mr Norris denied this. It was his evidence that he had supplied Mr Nye with information about the two Ballina opportunities, which led to them being won. He also took steps to find work for himself. 24 It was common ground that in March and April 1998, Mr Nye accompanied Mr Norris on numerous visits to shopping centres in the area as a marketing exercise, to get Mr Norris known as the local Wizard franchisee. Tenders for K Mart and Coles in Ballina and Coles and a shopping centre in Lismore were produced by Mr Nye, work in which Mr Norris was not involved. 25 Mr Nye formed the impression that Mr Norris had an abrasive personality and ceased taking him on visits when searching for work. Mr Norris denied this, he had no impression that he was leaving a negative impact on the people being visited. 26 Mr Nye denied that Mr Norris had obtained work at Ballina Best and Less as a result of his own efforts. On his evidence, Mr Norris' contracts had resulted from approaches Mr Nye had himself made to the National Operations Manager for Best and Less in Sydney, who asked for an initial tender for a building clean and if that worked well, for ongoing cleaning work. 27 Mr Nye assisted Mr Norris and his wife to perform the physical cleaning on the builders' clean, also providing him with equipment to use. Mr Nye had not purchased a floor polisher at that time, so Mr Nye lent him one at no cost, which Mr Norris then retained for some time. The tender for the ongoing cleaning was prepared by Mr Nye after the National Operations Manager had referred Mr Nye to the Gold Coast Area Manager. 28 Mr Nye prepared the tender, providing Mr Norris a copy at the same time it was provided to Best and Less. Mr Nye's evidence was that Mr Norris complained that the tender price was too low and that he would be working for nothing, but that the price was based on research which Mr Nye had done as to what Best and Less was paying for its cleaning contracts elsewhere and that he had discussed this with Mr Norris. Mr Nye had also checked that the tender reflected rates and hours consistent with similar sized sites around Australia. The tender reflected his estimate of the work required at the site. This was based on his own experience in the industry as well as his experience in cleaning the building itself, Mr Nye having assisted Mr Norris and his wife on the initial building clean. In their discussions, Mr Nye emphasised the importance of scheduling the cleaning tasks around the price. Mr Norris said that Mr Nye had told him that 'Well we can look at this later, when you get more work you can give it the flick.' 29 The tender was for 10 hours work at a price of $267.31. Mr Nye's impression was that Mr Norris did not understand that only 10 hours cleaning was required and it soon became clear that he ignored the training he had been given by Wizard. Mr Nye's impression was that Mr Norris insisted on doing the cleaning his way, which meant that it could not be completed in the two hours per day allotted. Mr Norris did not understand that there was a formula for performing the work on a daily basis which would have kept him within the two hour limit. 30 Mr Norris disagreed with this. His view was that he was contracted to clean certain parts of the premises and that this work had to be performed, regardless of the hours it took. He also disagreed that a 'formula' existed for the work which would enable him to keep the work performed within two hours. He was told on a number of occasions by Mr Nye 'the trick is to do half today and the other half tomorrow'. In Mr Norris' view this would not work because both Best and Less and the airport required him to do a full clean every day, in accordance with their contracts. 31 Mr Nye's evidence was in his view confirmed by Mr Norris' evidence that initially he and his wife worked a total of four hours per day in the store and later three, rather than the two hours tendered. In his view, this reflected Mr Norris' inability to allocate his time correctly. Mr Norris' evidence in cross examination was that he had never been able to do the job in 10 hours 'and do it properly'. 32 Mr Nye's evidence was that Mr Norris complained to him about the time he was spending at Best and Less, but despite a number of discussions insisted on doing the cleaning his own way. Mr Norris denied that this was so and asserted that he cleaned in accordance with his training. In cross examination he agreed, however, that Mr Nye had told him that it was important to tailor the work he did and the time he spent on it to the price tendered. He also agreed that he told Mr Nye that he wanted to do a good quality job, which would take longer. He also agreed that during training he had been taught that if a price was quoted, the time spent on the job had to be commensurate with the quote. 33 In cross examination Mr Nye gave evidence of similar sized stores to the Ballina store which were cleaned in under two hours in his own franchise area. 34 In the end, Mr Nye told Mr Norris 'Look its your business; if you want to spend four hours a day cleaning a store for which you are being paid two then that's your business.' 35 Mr Nye confirmed that Mr Norris was also complaining about only having one contract, but in his view did nothing to help achieve any further work - he just shrugged his shoulders at the suggestion that he should be doing so. 36 In May or June 1998, Mr Nye noticed the advertisement for the contract at the airport and made arrangements for a walk through, which he attended with Mr Norris. Mr Nye prepared the tender documents and had a number of discussions about the tender with Mr Norris. Mr Norris was again unhappy with Mr Nye's calculations and wrote to him about the details. Mr Nye's evidence was that Mr Norris agreed with the hourly rates, but disagreed with the estimate for chemicals and equipment. Mr Norris disputed this. The quote provided for $18.50 per week for equipment such as dust mops, buckets, scrubber pads and buffing pads. Mr Nye proposed $83.75 per week, which Mr Nye thought incomprehensibly high and in error. 37 The quote which was accepted was for 22.5 hours per week for a yearly rate of $35,094.80, Mr Norris insisting that the tender be made on his own letterhead. 38 Mr Norris' evidence was, however, that he and his wife spent 41 hours on the work. Mr Nye could not understand why this was necessary given that the quote reflected an assessment of the work necessary in connection with the number of flights arriving at the airport. On that basis attendance at the airport 4 times a day was unnecessary, particularly given that on Saturdays for example, only one flight a day arrived. 39 Mr Norris had discussed his work at the airport with Mr Nye, who on his evidence had suggested that if he did not wish to go out there more than once a day he should hire someone to do the other work. Mr Norris refused to entertain this possibility. 40 When the job was tendered, the Ballina City Engineer informed Mr Norris that if flights into the airport increased, he would be entitled to have the price reviewed. He had never sought to do so, even when flights later altered. 41 Mr Nye also observed that the equipment costs incurred by Mr Norris reflected $40 per week leasing fee. He was unsure what this referred to, but noted that the airport job required a scrubber, but no buffer. Mr Norris already had a buffer for the Best and Less job and hence did not require a second buffer. Mr Norris explained that this amount reflected in part a buffer purchased for a tender put in for Coles at Murwillumbah. He had purchased the machine in advance of being awarded the tender, which was however unsuccessful. 42 As to the alleged costs of $40 per week for chemicals, Mr Nye also found this high, given the tender price. Mr Nye's surmise was that Mr Norris was either paying too much for his chemicals or was performing other work, about which he had not informed Wizard. 43 Mr Nye's assessment was that Mr Norris refused to give up the attitudes of an employee in order to approach his franchise as a business. He refused to participate in growing the business, he refused to follow his training in relation to the management of his time at work, he had become involved in only two contracts and was doubling up on the amount of time necessary to do those jobs. 44 Mr Nye had had 5 years' experience in commercial cleaning before joining Wizard and gave evidence as to the importance in such a business for managing properly the relationship between tasks required and time. In his view Mr Norris failed to understand this, despite his training. There was nothing wrong with the quality of his work, but his ability to manage time and tasks was very poor, leading him to do excessive amounts of work. Mr Nye spoke on the phone to Mr Norris at least once a week and in person every two weeks. Mr Norris did not always raise the time issue in relation to his jobs in every discussion, but it was a constant concern. Each time Mr Nye counselled him to manage the allocation of task to time. Mr Nye found Mr Norris not the type of person who listened to advice easily. 45 Mr Norris denied the frequency of his discussions with Mr Nye, especially towards the end of the time during which he held the master franchise, but said Mr Nye always dismissed his complaints. 46 Mr Collins' evidence was that he was Mr Norris' training instructor in Melbourne. He believed that Mr Norris had understood the training and had passed all the tests given him, and had participated enthusiastically in the training. He was provided with 3 training manuals, which included training in relation to time management. The training included training with existing franchisees on the job, who had been approached by Wizard and had agreed to participate. On his evidence such training slowed down the cleaning process which the franchisee would otherwise conduct at the site, particularly while they showed the trainee how to operate equipment. 47 Mr Collins was a franchisee who later started working as Mr Norris' regional manager when Mr Nye ceased as master franchisee and became a director of Wizard. Mr Collins travelled to Mr Nye's area about once every 6 weeks, met with him and inspected his sites. His evidence was that Mr Norris' cleaning was always done well. 48 Mr Collins was, however, 'staggered' that Mr Nye and his wife each worked 2 hours a day at the Best and Less store. When he read Mr Norris' affidavit it was the first time he became aware that he was working more than double the hours tendered. In his view, it was a small store which could easily be cleaned by one person in under 2 hours. Mr Collins had been a Wizard franchisee for 5½ years and had himself cleaned larger stores in under 2 hours. 49 In cross examination Mr Collins said that if Mr Norris had raised the question of the time the cleaning was taking with him, he would have advised him that he was spending too much time in the store, that it was not required and that he must have been going too slow. Mr Collins also said that he had discussed such issues with other franchisees when asked. He also gave evidence of larger stores than the Ballina store being cleaned in under two hours in his franchise area. 50 Mr Collins knew that Mr Norris had purchased a gas buffer, unnecessary for this job. In his experience, such a buffer was more expensive than an electric one, albeit it was quicker. If the linoleum was being buffed more than once a week, in Mr Collins experience it was being done too often. Extra work of this kind was unnecessary and not what Mr Norris had been trained to do and was not the basis upon which the job had been quoted. In cross examination, Mr Collins agreed that in its training Wizard emphasised quality of work as the most important matter, but he said that time was emphasised as well and a balance always had to be struck between the two. 51 In relation to Ballina Airport, Mr Collins' evidence was that Mr Norris had told him he was not attending the airport for every flight. He was aware of an increase in one flight, because Mr Norris complained to him about it, but Mr Norris had not informed him he was entitled to have the contract reviewed in that event and had not sought to have the contract price increased. 52 Mr Collins found the claim that in excess of 40 hours work per week was being performed extraordinary and not consistent with his own observations of what was done at the airport. When he had attended the airport with Mr Norris, he had not observed him cleaning the whole airport on each occasion and on one occasion a carpeted area was locked, to prevent people using it. Mr Norris did not complain to Mr Collins about the hours he was working at the airport. Rather, he complained about the number of times he had to go there. 53 Having looked at the flight schedule, Mr Collins' evidence was that it was clear that it was not necessary for Mr Norris to go there four times a day. In cross examination he explained why three attendances on particular days would have been adequate. 54 Mr Collins described Mr Norris as a 'complainer by nature', often complaining about his clients and the people who made the airport dirty, the need to drive to the airport four times a day and his lack of contracts, but not excessive working hours. 55 On every occasion Mr Collins visited Mr Norris marketing was discussed. He did not regard his role as involving marketing, that being a matter for the marketing department, nevertheless Mr Collins offered to cold call customers for Mr Norris or to follow up others to whom he had spoken in the past, but Mr Norris dismissed these offers with comments such as 'there's no use' and 'I have followed up so don't worry'. Mr Collins also provided him with fliers for distribution. Mr Collins' reports to Wizard about these visits reflected the need for more marketing, including comments such as 'more contracts needed urgently'. The reports went to Wizard's general manager, Mr Keen, but were not acted upon, because comments to this effect were repeated in Mr Collins' reports. 56 Mr LeBransky was a director of Wizard who gave evidence about the training programme Mr Norris had undertaken. There was classroom training as well as practical experience provided working on site at night with existing franchisees over two weeks. The aim of this was to provide practical experience on the machinery and to give meaning to the theoretical content provided during the day. Manuals were provided and trainees tested on their understanding of the contents. If trainees failed any aspects, they were repeated. Mr Norris disagreed with Mr LeBransky's evidence as to the quality of the training, regarding it as an opportunity for other franchisees to obtain free work from him, although in cross examination he agreed as to the matters about which training was given. He also denied that he had been taught how to perform particular work in a quicker manner. 57 Mr LeBransky's evidence was that Wizard aimed at a stringent selection process. Prior to the proceedings, Mr Norris had made no complaint about the training provided or the manuals which he retained and were updated from time to time by Wizard. 58 Mr LeBransky denied making some of the statements attributed to him by Mr Norris, but said that he had promised that Wizard would offer 'all the reasonable support it can but in the end it is up to each franchisee as to how their business grows'. Mr Norris denied these statements. Mr LeBransky took the view that a franchisees' success depended on how franchisees managed their business, the quality of their work, whether they asked for more business and could handle it. However, franchisees had to work within the parameters they had been taught, or risk failure. 59 As to the promise to obtain more work, Mr LeBransky said Wizard was prepared to market for it, but could not provide work which wasn't there. When Mr Norris was training he was aware his area was new and that he was to be part of the team which would build work in northern New South Wales and Queensland. Mr Norris denied this, insisting that he believed there were existing contracts in the area. 60 Mr LeBransky denied that Mr Norris had informed him that he had received legal advice that he should refuse to pay the franchise fee until work was provided. At the time he had told Mr Norris that the training alone cost $8,000 and that the franchise fee was in part to cover this. In his view, Mr Norris had misled Wizard by turning up to the training after execution of the franchise agreement, but without payment of the franchise fee as required by the agreement. While Mr LeBransky was surprised at Mr Norris' apparent inability to pay the fee, particularly given the information he had provided as to his financial position, it was agreed he would pay $15,000 and the rest when he had some contracts. This was the first occasion Mr LeBransky had agreed to such an arrangement. Mr Norris denied having suggested he needed contracts in order to pay the franchise fee, but agreed in cross examination that he had never made any further payments after receiving contracts and had never given any explanation for his failure to do so. 61 After Mr Nye's retirement from the master franchise, Mr Anthony LeBransky, Wizard's marketing manager, made a number of trips to Queensland and New South Wales in relation to tenders being pursued in Mr Norris' area and Mr Keen, Wizard's senior operations manager visited him too. The reports were that Mr Norris' standards were good, but he wanted more work. Excessive time being spent on cleaning was not raised in the reports. Mr LeBransky's view was, however, that Mr Norris' insistence on spending excessive time on his work had reduced his earnings from the contracts. 62 Mr LeBransky noted Mr Norris' refusal of the Alstonville job, which had a significant profit on 20 hours work. He regarded Mr Norris to have been well treated by Wizard and, in his view, would have earned a good living if he had followed his training. Mr Norris disagreed. 63 Mr LeBransky also explained how the Wizard franchise system operated, including the royalty fee which covered the provision of various financial services, including dissection of wages, banking and collection of moneys, which permitted a franchisee to spend only about ¾ of an hour per week on bookkeeping. Wizard collected franchisee's earnings from customers, paid wages of employees, calculated their income tax and superannuation entitlements in response to weekly information provided by the franchisees as to employees' working hours. Advice was also given as to other worker obligations. 64 Wizard also had a network of field operators who provided support to franchisees. They were available on 24 hour call, to assist in the event of machinery breakdown, employee illness, or personal problems of franchisees. They also provided attention to quality control and standard maintenance on regular visits to the franchises every 4 to 6 weeks and were available to assist with work performance problems. Mr Nye and Mr Collins had provided this type of support to Mr Norris. 65 Wizard also conducted research and development on various products, including chemicals and new machinery. It had, for example, developed new forms of polish, with non-skid properties, which were easy to apply. External products were also tested and extended warranties had been arranged by Wizard for its franchises with suppliers of equipment. Various products were also available for purchase by franchisees, who were under no obligation to do so. 66 Wizard undertook generic marketing on a national level to major stores and chains, as well as directional marketing in local areas, including in relation to opportunities identified by franchisees. National marketing gave franchisees entry to large chains which operated through central supply offices. This included organisations such as Coles, Best and Less, K Mart and Officeworks, which handle cleaning contracts on a state or territory basis. 67 Prospective franchisees were informed of Wizard's operations and costs and profit breakdowns. Mr Norris was provided with such information after he had signed the confidentiality agreement. Mr LeBransky understood that the questions Mr Norris and his legal advisers raised were all answered to his satisfaction before he signed the franchise agreement. He was also given an opportunity to speak to other franchisees of his choice before he entered the agreement. 68 In cross examination, Mr LeBransky explained that he believed that Mr Norris had failed, because the operation his business which made the difference as to whether he made a profit or just eked out a living, was directly under his control. Mr Norris had not moved to rectify his problems and use the tools he had been given to do so, which included the training he had been provided with and the minders available to him, such as Mr Nye and Mr Collins. While quality was an excellent facet of his business, because of his approach to time management he had failed to make profits. As a result he had also failed Wizard, with the result that the parties were now before the Court. The submissions 69 The hearing took longer than anticipated by the parties, so that a programme for the filing of written submissions was fixed. The applicants did not adhere to that programme, but the submissions in reply which were filed late were received, in order to do justice between the parties, the respondent not having demonstrated that they would suffer any prejudice as a result. 70 The submissions advanced for the applicant by Ms Keys of counsel were that the applicant had demonstrated the unfairness of the contract having regard to the misrepresentations made by the respondents as to the amount of work to be provided to the applicant; the insufficient work in fact provided; the respondents' unfair actions in tendering for work; and the unfair and onerous burdens imposed upon the applicant by the franchise agreement, which also sought to avoid the obligations arising from a potential employer/employee relationship, to the applicant's detriment. 71 Mr Nye had met the applicant at his home, after he had responded to an advertisement. It was submitted that the conduct of those meetings imposed a high standard of efficiency upon Mr Nye, who had represented to the applicant that other franchisees were turning over hundreds of thousands of dollars and the idea of the business was to make it grow by taking on more jobs, employing people and managing jobs, rather than doing cleaning work personally. 72 It was relevant that the applicant had sought further information after obtaining legal advice about the franchise agreement. The response provided included an assurance that the agreement would be varied to include a covenant that Wizard would 'assume prime responsibility to provide contracts for you'. Further representations as to the provision of work were made by Wizard when the applicant attended its training course in Melbourne, which it was submitted was, in any event, merely unpaid cleaning work performed under the guise of training. 73 It was submitted that the applicant had relied on the representations made, but they had not been fulfilled. There had been no existing or immediate work provided and pursuant to legal advice, the applicant had paid only $1,500 and a sum of $15,000 toward the total franchise fee of $40,000 until work was provided. 74 The two contracts provided by the respondents at Best and Less in Ballina and Ballina Airport were not profitable. The applicant and his wife worked in the business for total pay of $818.94 per week in return for some 65.45 hours per week. 75 The respondents had also failed to provide sufficient marketing support, particularly after Mr Nye's master franchise agreement with Wizard had been terminated. The evidence as to marketing being the responsibility of Mr Keen and Mr Anthony LeBransky, was not supported by evidence from either of them that such marketing had in fact been undertaken. The only evidence as to actual strategies implemented was one suggested by Mr Collins, who provided fliers for the applicant to himself distribute. 76 The evidence was that the Best and Less contract had been secured as the result of the applicant's satisfactory work on the building clean. The respondents benefited as a result from fees and goodwill, as well as the low price of the contracts. The applicant received no benefit in return as a result of any marketing strategies which the respondents pursued. 77 After the applicant had given instructions to his solicitor to seek his release from the franchisee, he had been offered one further contract. At that time the applicant was fully occupied for more than 11 hours per weekday and for 7 days per week in low paying work which could as a consequence not be subcontracted. It followed that the applicant had no capacity to accept further work. In those circumstances he was entitled to say 'enough is enough'. 78 It was also relevant that given the applicant's work commitments under the contracts, he was fined two amounts of $50 and $1,100 when he was unable to attend conferences organised by Wizard. These penalties imposed a further onerous burden. 79 The evidence was that the quotes for the two contracts which the applicant had obtained were low in order to attract further work. While the respondents' case was that the applicant spent too much time on performing the work under the contract, there was no evidence that the applicant had been observed in not working in an efficient manner. It would be concluded that it was the quotes which were too low, having regard to the emphasis placed by the respondents in training manuals upon the paramountcy of quality. 80 It was submitted that Mr Nye's estimates of how long the work should take, would not be accepted because the evidence that he paid a flat rate of $25 for two hours work to complete a similar job in Queensland, did not comply with the pay for two hours work under the NSW Cleaning and Building Services Contractors (State) Award ('the Award'). These arrangements would also contravene Schedule 1 of the Act and were not relevant as the evidence was based on experiences in Queensland, while the applicant's franchise operated in New South Wales. Mr Nye's estimates as to the airport job also failed to have regard to flight arrival and departure times at Ballina Airport. It was also relevant that Wizard's reports on the applicant's performance did not record that too much time was being spent on the work. 81 It was submitted that in terms of supervision and payment the applicant was treated by Wizard in a similar way to an employee, yet the franchise agreement avoided that classification and resulted in the applicant receiving inadequate remuneration for his work. 82 Comparisons were made as between the applicant's working hours and remuneration under the franchise agreement and the Award for working hours of 65.45 hours before 2000 and 58.5 hours thereafter. 83 In submissions, the applicant abandoned an order sought earlier in the proceedings that Wizard assign to him the two cleaning contracts which he was operating in Ballina and instead, sought to have any collateral obligations under such contracts lapse. 84 The submissions advanced for the respondents by Mr Lacy of counsel were that in reality this case concerned the capacity of the applicant to manage and perform the incidents of the franchise agreement and the extent, if any, of the respondents' responsibility to have foreseen such incapacity. Claims of misrepresentation in the formation of the agreement and substantive unfairness in its operation, had not been made out on the evidence. 85 It was common ground that the applicant had responded to an advertisement offering opportunities in a commercial cleaning franchise. It was submitted that the applicant's claim that the business was not advertised as a franchise would be rejected, given the terms of the ad which was annexed to his own affidavit. 86 The evidence was that at the time of that response the applicant was not engaged in any business or occupation and was looking to get into a business. He had looked at other businesses, but there was not much about in the area. Prior to 1991 he had worked for Telstra for many years, he had worked in cleaning businesses in Sydney and had experience as an employee in such work. He had later owned and operated a restaurant for about 12 months, which had been unsuccessful. 87 Mr Nye had visited the applicant and had met him for about an hour. The applicant had signed a confidentiality agreement and had been provided with information about Wizard and the franchise system it operated. Various representations were made during three or four later discussions were held at the applicant's home. The applicant had then obtained legal advice, but not accounting advice, as had been suggested to him. 88 As a result of that legal advice the applicant sought and obtained various clarifications of the franchise agreement and he was advised by his lawyer in light of Wizard's responses that the franchise agreement was fairly reasonable. The applicant then executed the agreement and went to Melbourne for two weeks' training. He returned to operate his franchise in late February 1998, with Mr Nye spending at least 10 days with him over the following three months, in accordance with the agreement, to assist him to get started. 89 In early March, the applicant secured a first builders clean for the Best and Less store, in May he was awarded the cleaning contract for that store and in July, the contract for the airport. In July 1999, he was offered a further contract at Alstonville, which he declined. 90 It was relevant that applicant had paid only $15,000 of the $40,000 franchise fee agreed for the right to the franchise for 10 years. 91 It was submitted that the discretion vested in the Court under s106 was a wide one, to be exercised not in the light of abstract notions of fairness, but in the light of the proved facts of the case. An important principle was that weight should be given to the business decisions made by the parties to contracts challenged under the section. Provided that the parties were at arms length and acted in good faith, there was no reason to assume that the contract was unfair, merely because an arrangement proved to be a bad bargain. Reference was made to the observations of Watson J in Swann & Anor v Ultratune Aust. Pty Ltd & Anor (1983) 5 IR 284 at p293: '…there may be some grounds for criticising lack of efficiency, and some inadequacies. These were not such as to render false what was claimed. I am satisfied also that the applicant Swann can hardly complaint to the extent that this aspect can be said to be in any way significant. On the evidence I find that he, for his part, (no doubt due to his necessary pre-occupation to some extent with his other business), contributed to some degree to the difficulties which neither Ultratune nor he anticipated would face the two centres. I accept the complaints of Ultratune representatives in that respect. Whether or not a full-time dedicated franchisee operator, instead of paid managers, would have markedly changed the position is questionable because of overriding factors. Nevertheless, some attempts by Ultratune to improve the position were frustrated or not accepted by the applicant Swann, although accepted by other franchisees. The most compelling feature of this part of the case must, however, be the certain awareness of the applicant Swann and his co-venturers in Trazdo with their backgrounds and experience, that a calculated business risk was being undertaken as Ultratune made perfectly clear at the outset. Assuming it could be said that there was a "gilding of the lily", there can be no suggestion that those associated with Trazdo were overborne, or that they were so deluded, that their expertise and business sense would not have enabled them to understand and be fully aware of the risks involved in the particular ventures.' 92 It was submitted that the claims advanced for the applicant had no foundation in the evidence and would be rejected. They fell into three categories, the first of which was that there had been misrepresentations which had induced the applicant to enter the agreement. They were said to arise in the advertisement, by Mr Nye in the first meeting and in relation to future matters by Mr Nye, Mr LeBransky and by Wizard. 93 The evidence was that the reference made by Mr Nye in the advertisement, to the effect that the business was well established, was a reference to the Wizard group, of which Wizard was a part. It had then been established for some 15 years. The applicant's suggestion that he understood the advertisement to be referring to established contracts in the area would be rejected, given his evidence as a whole, including concessions made in cross examination as to what Mr Nye had told him. It followed that Mr Nye's evidence on these matters would be preferred, particularly when considered in the light of Mr Norris' refusal to pay the full franchise fee until work was provided to him, the way in which he had completed a questionnaire in October 1997 and the evidence of discussions which he had prior to signing the agreement in February 1998. It would be found that at that time, the applicant was well aware that there were no existing contracts in the area and the suggestion that he had been misled as to these matters would be rejected. 94 The evidence was that the Wizard group had in excess of 60 franchisees around Australia, with major clients including Franklins, Woolworths, and Coles. It was submitted that Mr Nye's evidence that he believed his statement that the business had secure income to be correct would be accepted. It was also relevant that it was not suggested to him that this was wrong. Furthermore, the applicant had not demonstrated that the statement was false. 95 Similarly in relation to the statement that the business had good profits and clients. There was no evidence which demonstrated that this was not the case in September 1997. Such a suggestion had not been put to the respondents' witnesses. Even if it could be suggested that the statement was 'gilding the lily', there was no evidence that the respondents did not secure work in the franchise area from Wizard's clients was due to the respondent's failures and in any event did not ground a misrepresentation. 96 As to the representation that other franchisees were turning over hundreds of thousands of dollars, Mr Nye had not denied making much a statement. It had, however, not been put to him that the statement was false. In any event, it was a statement which had to be considered in the context of other statements made, as to the necessity for personal effort and hard work to ensure that the franchise succeeded and that personal earnings would reflect the efforts made. All of these matters had been admitted by the applicant, so that it followed that he could not have been misled as to these matters. 97 As to representations as to what would transpire in the future, it was alleged for the applicant that they were misleading because they had not come to pass. It was submitted the mere fact that such representations do not come to pass does not make them misleading. There was no evidence that such statements were not genuinely made and in fact the evidence demonstrated that they had been fulfilled. The applicant had been assisted in securing contracts, those efforts were ongoing despite the fact that the applicant had not demonstrated that he could handle more work. 98 The claims that insufficient work was provided under the contract and that it was not profitable, were also submitted to be without foundation. There was no evidence that it was represented that any particular amount of work would be provided. Mr Nye's evidence was that he told the applicant that work development within the region was not likely to happen quickly and that it would require hard work by the applicant. The applicant had also acknowledged that he was told he would be given a couple of jobs initially and further work, if he handled the initial work. The applicant's understanding was that at best, Wizard would provide help to secure contracts to expand his business. It did so. 99 In the light of the applicant's case, it was difficult to see how he had capacity for additional work in any event, given the hours and days he alleged he was working. The respondents' case was that the work should have taken no more than 32.5 hours. The respondents could, in those circumstances, hardly have confidence that he was capable of taking on further work. It followed that no misrepresentation as to work allocation had been made out. 100 It was further submitted that the allegations that insufficient support for marketing had been provided also had no foundation. There was evidence of generic marketing, where tenders were pursued on a national basis for work in all geographical regions and directional marketing, including pamphlets and door knocking within a particular region. There was also evidence of such marketing having been conducted in Mr Norris' area. 101 The applicant's evidence was that he was aware he could always approach Wizard about these matters and that he believed that it had been reasonable throughout the contract as to these matters. 102 As to tendering, the evidence was that the applicant had always been dissatisfied as to the tender price submitted for the two Ballina jobs. However, Mr Nye's evidence was that the price was consistent with the customer's expectations and was necessary in order to gain the business initially. 103 The evidence was that the applicant's difficulties in performing the work on the two jobs arose from his insistence on performing the work in a manner he was comfortable with, rather than in the way in which he had been trained. Both Mr Nye and Mr Collins gave evidence that there was no difficulty in cleaning areas two or three times the size of the Best and Less job in 2 hours. On the evidence it would be found that the unsatisfactory remuneration which the applicant complained of resulted from his insistence on performing the work for a longer period. 104 It was also submitted that the applicant had failed to make out a case in relation to the complaints advanced in relation to remuneration from the two Ballina jobs. In both cases the tender price was more than capable of generating a reasonable return if the work had been performed in a timely manner, in accordance with Wizard's training. 105 It was relevant that the applicant had failed to adduce any objective evidence as to whether the time he took to perform the work was reasonable. Contrary to the Wizard training manuals and procedures manuals, he had failed to keep diaries of the time taken for each particular job. Without such a record being maintained, the applicant had no concrete basis to advance increases in the tender price and could not provide any justification in support of such claims. No record was kept for instance of any changes in the way in which the job was done or the area to be cleaned, which could have resulted in evidence which would support an increase. 106 In the case of the Ballina Airport, while the applicant complained about the tender price from the outset, he had never complained about the time on which the tender was based. The hourly rate ultimately reflected the rate he required, with the only issue remaining relating to the cost of chemicals. The fact that the applicant later took 41 hours per week to perform this work instead of 22.5 hours, as estimated by he and Mr Nye, reflected his approach to the work, which he insisted in performing in a way different to his training, not that the hours tendered were inadequate. 107 The applicant was, of course, free to adopt such a different approach, given that he was an independent businessman, but he could not complain as a result if the work was less remunerative than it could otherwise have been. 108 It followed, so it was submitted that the applicant had failed to make out a case so far as any return on investment was concerned. The failure to keep records was telling against him. Even if the time he alleged the work took him was accurate, his return was greater than he claimed. 109 Given the claim advanced as to the unremunerative nature of the work, it was submitted to be curious that the applicant sought orders which would permit him to retain the work after the contract was declared void. Although that position had been abandoned in submissions, the Commission was entitled to infer that the contracts were in fact remunerative. It was also relevant that the applicant had been trained by Wizard, retained its manuals, knew its business policies and strategies and, if the contracts were declared void ab inito, as he sought, would no longer be bound by the confidentiality and other constraints of the franchise agreement, as to the use of Wizard's policies and business strategies. 110 It was also submitted that it could not be concluded that the franchise agreement had been designed to avoid any industrial instruments. No relevant industrial instrument had been proved for the purpose of the proceedings and the respondents could hardly meet a case advanced on mere assertions made in submissions. There was no evidence relevant to such a claim and the applicant's submissions paid no regard to relevant differences in the tax position for the applicant if remunerated as an employee rather than as an independent businessman. 111 It was concluded that the evidence demonstrated that the applicant had failed to meet his own obligations under the franchise agreement, yet sought the aid of the Commission in setting aside a good bargain. The application should be dismissed, not having been established that the franchise agreement was unfair. 112 If the Court took a contrary view, it was submitted that it would not, in any event, declare the contract void ab initio, given the evidence. The applicant had received valuable consideration for the bargain he had made. To the extent that his remuneration was unsatisfactory, that situation was contributed to by his own failure and refusal to adopt Wizard's cleaning methods in accordance with the franchise agreement. 113 The applicant had had the benefit of Wizard training, the cost of which was $8,000. The respondents had expended time and effort to assist the applicant obtain work and otherwise in the operation of his business. Wizard had offered the applicant other work which he had refused. The applicant had acknowledged Wizard had been reasonable under the franchise agreement. The applicant had paid $16,500 of the $40,000 franchise fee, payable up front for the franchise rights for 10 years. The benefits which the applicant had received under the agreement had plainly outweighed what he had paid. In those circumstances, the appropriate orders would involve insertion of a termination provision upon notice, together with an order that the applicant pay the respondents' costs. 114 In reply Ms Keys submitted that regard would be had by the Court not only to the terms of the contract, but also to the way in which it had worked out and operated as between the parties (Walker v Industrial Court of New South Wales & Anor (1994) 53 IR 121 at p134)). Here it was the operation of the contract which grounded the claim of unfairness. 115 The respondents submitted tenders for the two Ballina jobs which ultimately were too low, providing remuneration of less than the award rate, so that Wizard could break into the area. 116 There was no evidence from which it could be concluded that the applicant had performed the work his way and not as he had been trained, so that his remuneration was reduced. Wizard reports had not criticised his work, to the contrary it was praised. Those reports had provided Wizard with an opportunity to comment on the time being taken by the applicant to perform the work. Wizard was obliged to provide the applicant with management advice under the agreement and if the applicant had been failing to clean efficiently, Wizard had failed to provide such advice. 117 It was also relevant that the manuals on which reliance had been placed provided no guidelines on how to perform work expeditiously. The only breach identified had been a failure to keep diaries. The applicant's evidence that he saw no reason to continue keeping them would be accepted. Keeping of such records would not have assisted in the work being performed faster. 118 The applicant was not seeking award rates for the work he had performed. The unfairness alleged was that the franchise agreement represented that profits would be generated by employing others to perform work. That was not possible where the tender price provided for less than award rates, in order to attract and promote further work. 119 The employment of others in the franchise business was fundamental to that business and to the question of fairness. The other representations relied on merely sought to add credibility to this fundamental representation. The respondents' submissions that there had been no misrepresentations were based on evidence which would be regarded as convenient explanations, but viewed from an objective viewpoint, was clearly misleading. Mr Nye's evidence in cross examination, made plain that the basis upon which he had prepared the representations contained in the advertisements were his assessments and not any detailed information. It was evident that at the time of commencement of the franchise, there was no secure income, good profits or good clients for Mr Norris' business. 120 As to the evidence of the legal advice which the applicant had obtained, it was relevant that the applicant had been assured by Wizard that the contract would include a covenant that Wizard 'would assume prime responsibility to provide contracts for you. (The fee for this is included in the royalty.)' 121 The applicant sought orders which rectified the unfair operation of the agreement, including payment withheld as royalties and all monies paid under the agreement. The applicant's labour, provided under the guise of training, should also be regarded as offsetting the costs of providing the training. 122 As to the claim advanced in relation to the cleaning contracts which the applicant had earlier sought to retain, which the respondent suggested demonstrated their profitability, it was submitted that: 12.1 the contracts are more profitable if the 13% royalty is not deducted; 12.2 the Applicant has been personally performing these contracts for some time now, and while there is no other Cleaning Wizard franchise in the area, the Applicant may lose goodwill in the local community if he ceases to perform those contracts without alternative arrangements in place. Consideration 123 The applicant's case was advanced, as explained in submissions in reply, on the unfairness of the contract, as demonstrated by its operation. 124 There were several major planks to the case advanced for Mr Norris. The unfairness of the contract was firstly sought to be demonstrated by the failure of the respondents to make good their representations as to the work which would be provided to Mr Norris. It was secondly alleged that the respondents had seriously underestimated the time required to perform the cleaning work under the two contracts which were provided, with the result that they provided for remuneration less than would flow to an employee performing the work. 125 On the evidence the applicant had little complaint as to how the respondents conducted their franchise operation, apart from these two areas. There was indeed substantial evidence of support provided to the applicant in the areas about which Mr LeBransky gave evidence and Mr Norris expressed his satisfaction with much of that support. 126 Prior to entering the agreement Mr Norris sought express assurance from Wizard that it would provide him work to perform. Written assurance to that effect was provided. While there was an issue as to whether or not Mr Norris was aware when he entered the franchise that there were no existing contracts of which he would receive the benefit and that the franchise was for a new territory, I have concluded that the proper finding is that Mr Norris was aware of these matters. 127 Not only was this consistent with the evidence of Mr Nye and Mr LeBransky, it was consistent with evidence given by Mr Norris in cross examination and with his evidence that he discussed no actual contract figures for the area with Mr Nye, but only those provided by way of hypothetical example in the franchise information provided by Wizard early in the discussions. Had there been existing contracts, Mr Norris would undoubtedly have sought and been provided with financial information about them, so that they could be taken into account by his lawyers in the advice which they gave Mr Norris, consistent with the evidence of his careful assessment of the Wizard franchise he was considering. 128 I also reject the evidence of the applicant that he did not initially understand he was responding to an opportunity to acquire a franchise. This was made plain in the advertisement to which Mr Norris responded, annexed to his affidavit, filed in support of the application. Mr Norris, in cross examination, gave unconvincing evidence that the advertisement he had in fact responded to was different. I accept Mr Nye's evidence that this was the advertisement which he placed. 129 That advertisement indicated that the business was well established, had secure income, good profit and good clients. I accept Mr Nye's evidence that he was referring to the business of Wizard itself in the advertisement. There was no evidence upon which it could be concluded that Mr Nye's understanding as to these matters was wrong or that any difficulty flowed to Mr Norris as the result of any underlying problems with Wizard's position. 130 While I accept that there may have been a proper foundation for the views expressed in the ad, given Mr Nye's knowledge of Wizard and its directors, I nevertheless take the view, however, that the advertisement, as drafted, had the potential to mislead - namely by suggesting that the advertisement was referring to the franchise being offered, rather than to Wizard's underlying position. On his evidence this was how Mr Norris understood the advertisement. If the advertisement was all that was to be considered, a case as to some misrepresentation might have been established. I do not, however, accept that Mr Norris was in fact mislead as to the franchise opportunity which he was considering. 131 On the evidence, after entering into a confidentiality agreement Mr Norris was provided with a deal of documentary material about Wizard and the franchise being offered, including the franchise agreement itself, as well as having about 5 substantial conversations with Mr Nye who went to his home, as well as later discussions with Mr LeBransky over about 5 months. Those documents never indicated that there were existing contracts in the area, and advised Mr Norris to seek accounting and legal advice. He sought the latter, but not the former. The evidence of Mr Nye and Mr LeBransky was that they informed Mr Norris of the position that a new area was being developed and that there were not existing contracts. Mr Norris' evidence was that he understood contracts were on foot, but could not recollect what had been said to give him this impression. He agreed that he had been told that the area was a new one which would take time and effort to build up and he knew that no work was being performed for Franklins at the time. 132 The most telling evidence of the fact that Mr Norris understood that he was not being offered any existing contracts was his refusal to pay the $40,000 franchise fee, as he had agreed to do, on execution of the franchise agreement. His evidence was that his legal advice was that he should not do so, until he had received work from Wizard. Accepting that evidence on its face, it evidences that both Mr Norris and his legal advisers were well aware that there were no existing contracts of which he would receive the benefit when he entered the franchise agreement. 133 As a result, Mr Norris agreed with Wizard, in discussion with Mr LeBransky in Melbourne, that he would later pay $15,000 in addition to the $1,500 he had already paid in respect of the training undertaken and the balance when he received work from Wizard. He paid $15,000, but never paid the balance, despite Wizard having helped him to obtain two contracts and later having offered him a third. It follows that the proper finding is that there was no misrepresentation as to the nature of the franchise opportunity being taken up, when the agreement was entered. 134 I turn then to the complaints as to lack of work. After Mr Norris returned from his Melbourne training, work was pursued by he and Mr Nye, with the end result that two ongoing contracts were later secured for work at Ballina. 135 There is no doubt that the applicant took the view, from the outset, that the price tendered for both jobs was too low, but accepted the view of Mr Nye, that the price reflected what the clients were expecting to pay and that at the outset it was important for him to price his contracts so that work in the area was obtained, as a basis for obtaining further work. 136 Given the applicant's concern at the low price tendered for the two Ballina jobs, it but states the obvious to observe that the remuneration which the applicant obtained under those contracts would be diminished, if the necessary work were not performed within the time estimates upon which the tenders were based. 137 The franchise system established by Wizard included the keeping of detailed records as to the various elements of a cleaning job. The applicant failed to keep these records, on his evidence, because he saw no point in them. While he apparently kept other records of what the work involved, they were not brought forward as part of the evidence led. 138 It followed that the only evidence as to how long the various jobs in fact took to perform, was that which the applicant himself gave. The applicant worked in the business with his wife, but called no evidence from her as to the hours involved and called no other objective evidence as to how long such work would reasonably require. 139 The length of time that the applicant was taking to perform these two jobs were the subject of discussion between he and Mr Nye on a number of occasions. There was no issue that Mr Nye repeatedly counselled him that he was taking too long and should reduce the time he was taking and approach the cleaning in a different way. The applicant took the view that he could not do so without jeopardising the quality of the job he did and rejected Mr Nye's advice. He did not raise these matters with Mr Collins, who was astonished when he learnt of the length of time the work in question was taking and on his evidence, like Mr Nye would have counselled Mr Norris that he was taking too long and should adjust his work methods, for instance by reducing the number of times per week he was performing some particular cleaning work. 140 Quality of work was undoubtedly a matter stressed by the respondents and valued by them as well as by Mr Norris. Nevertheless on the evidence led, quality could not be provided on a basis which made work unprofitable. So much seems both obvious and logical in any business environment, including this one. 141 The applicant's evidence as to how long the work in question took him was explored in cross examination. In relation to the work at Ballina Airport in particular, the result was that on any view the applicant's evidence as to how long the work took, could not be accepted as a proper basis for assessing whether the price tendered for that work was unfair. 142 In my view, in a case such as this it will be most difficult for an applicant who has entered into a contractual arrangement pursuant to which he is his own master and where he organises the work he performs in such an inefficient manner that, as a result, his business becomes unprofitable or returns less than an employee working similar hours under an award would be paid, to complain that the fault for those decisions lie with the respondent and not himself. That Mr Norris was his own master in this sense cannot be doubted on all of the evidence. 143 In this respect Mr Collins' evidence as to how he would have organised the airport work was most instructive, as was the evidence of both Mr Nye and Mr Collins that in their own franchises larger stores than the Best and Less store for instance, were cleaned by one person in under two hours. 144 It is in this context that the complaints as to the provision of further work must be considered. There was, it is true, over 12 months during which Wizard obtained no further work for the applicant, despite repeated requests by Mr Norris. Nevertheless when it was obtained, he rejected it, on the submissions advanced, because he was already so occupied with other work that he had no capacity to accept the work offered. It seemed from the evidence however, that the decision to reject the offer had been made in circumstances where the applicant had already decided he wanted to get out of the franchise arrangement. It would obviously have been inconsistent with that desire to accept further work. If he truly had no capacity to take on further work what was the purpose in pursing it with Wizard? Mr Norris also gave evidence that since the initiation of these proceedings, Wizard had been able to obtain the contract at Murwillumbah which it had earlier unsuccessfully tendered and in respect of which he had purchased a second buffer. It seems on the evidence that if he had persisted, two further contracts would have been available to him. 145 In that context that the orders initially sought that the applicant should be granted the right to retain the benefit of the two Ballina contracts, even after the franchise agreement was declared void, must also be considered. Also of relevance is that this position was taken in circumstances where Mr Norris instructed his solicitors to initiate these proceedings, without first raising this prospect, his dissatisfaction with the franchise or his desire to terminate the agreement in any way with either of the respondents. In cross examination, Mr Norris agreed that he took this course, despite being conscious that Wizard had acted reasonably towards him, for instance in relation to not pursing payment of the outstanding franchise fee. 146 I accept the submission of the respondents, that the proper inference to be drawn from this approach was that contrary to his evidence, the applicant regarded the two Ballina contracts to have a value, the benefit of which he sought to retain for himself despite the franchise agreement being brought to an end. The applicant later resiled from that position, when written submissions were filed, but it is one which, in my view, cannot be ignored in these proceedings, particularly given the respondents' case. 147 That case was, of course, based in part upon the evidence of Mr Nye and Mr Collins, that the work required under the two Ballina contracts could have been comfortably performed within the time tendered, so that the applicant would not only have been paid for the work performed, but would have made a profit on the contracts. If these views were correct, it would provide an explanation for the applicant's desire to retain the benefit of the contracts. This evidence was supported by evidence which Mr Nye and Mr Collins each gave in cross examination as to similar cleaning work performed under contracts which they each had the benefit of in their own Wizard franchises. 148 There is no reason why that evidence should be doubted. It was, for instance, not submitted that the Court should reject it. In the case of Mr Nye it was rather submitted that his experiences were not relevant, because the arrangements he had in place as to the payment made to the persons who performed the work under Queensland law, were different to payments required to be made in New South Wales under the Award. No submissions were advanced as to Mr Collins' evidence about time taken for similar work about which he had given evidence, that being work performed in New South Wales. I accept their evidence as to these matters. 149 As to the submissions made about the Award, I note that it was not in evidence and no attempt was made to establish that it was the award which applied to the work or what the rates which flowed under that Award from time to time were. The response to the respondents' criticism of this aspect of the applicant's case, was that the applicant was not seeking an order for award rates, but rather was submitting that a representation of fundamental importance to the applicant, that the business could be grown by employing other people to perform work on contracts obtained was not made good, because the tendering process did not achieve rates which employees would have to be paid for the work. 150 This aspect of the case was not made out by the applicant for at least two reasons. The first was because the applicant did not establish on the evidence that employees would be required to work the hours he alleged he and his wife worked in order to perform the work in question and secondly, because there was no evidence as to what the applicable award or award rates were. In the absence of such evidence there was no basis upon which a proper conclusion could be reached that Mr Norris' franchise business could not be grown through the employment of others. 151 It may well be that the applicant's evidence as to the hours he and his wife worked was accurate. A case has not, however, been made out that the work reasonably required that many hours to perform in order to satisfy the contractual terms. To the contrary, accepting the evidence of Mr Nye and Mr Collins, as I do, it must be concluded that the work could have reasonably been performed in fewer hours, so that the contracts would not have been unprofitable and hence may well have been accommodated the employment of others. In this respect, Mr Norris' evidence in cross examination was that given the hours he and his wife were putting into the work, he was receiving about $8 an hour, but that if it had performed in accordance with the tender, his return would have been about $25 an hour. 152 The calculation of a return of $8 per hour also flowed from Mr Norris' assessment of his costs. That is an assessment which cannot be accepted. For example, to purchase a piece of equipment and then to assess costs flowing from the purchase on a weekly basis by dividing the price paid by 52 weeks, is not supportable. As Mr Norris himself conceded in cross examination, such costs must be established having regard to the life of the equipment itself. Nor is the inclusion of a piece of equipment purchased through no fault of the respondents in order to perform work on a job which had not been obtained, a basis for an assessment of costs upon which a money order could properly flow. Similarly, the calculation of the cost of chemicals, unsupported by any evidence of expenditure, of more than $50 per week, when Mr Norris' own assessment for the tender of the airport job for instance was in the order of $18 per week, also did not provide an evidentiary basis for this aspect of the claim to be accepted. 153 I turn then to the complaints as to insufficient work. The question of whether the applicant could have organised himself to perform extra work was problematic as I have already observed. Nevertheless the evidence demonstrated that both the provision of work and the opportunity to expand his business by employment of others, were promised to Mr Norris by Wizard, but not delivered. This was particularly relevant in a context where the price of the first two contracts had been deliberately pitched low, so as to attract further work and where Wizard had promised further work so long as the necessary quality was achieved by Mr Norris and he put up his hand for more work. There was never any doubt as to the quality of Mr Norris' work. He sought further work, but it was not supplied. 154 The applicant sought further work from Mr Nye and Mr Collins and various of Mr Collins' reports noted Mr Norris' continuing desire for further work. I am not satisfied that either Mr Nye nor Mr Collins were aware of the extent of the promise as to the provision of work made by Wizard. Certainly, Mr Collins took the view that marketing was not his responsibility, albeit he offered various forms of practical assistance to help Mr Norris obtain further work. On the evidence, while Mr Nye was involved he provided continuing support for Mr Norris and in fact assisted Wizard to meet its obligations through the successful tender for the two Ballina contracts. The evidence demonstrated that Wizard did not otherwise respond to Mr Norris' requests for further work in accordance with the promises it had earlier made to Mr Norris, at least not in a sufficiently timely fashion, given the promise made. 155 It may well be that the proper conclusion is that Wizard did not fail to make efforts to secure further work, but that they were unsuccessful. The pursuit of the Murwillumbah contract being one example. That failure was not attributable to the quality of Mr Norris' work, on all accounts that was excellent. The response to Mr Norris' repeated requests for further work could plainly have been dealt with better - particularly by someone other than Mr Collins responding to reports he filed, noting Mr Norris' requests. Perhaps Mr Norris' own conduct towards Wizard in part explains why he did not receive timely responses from those at Wizard to whom Mr Collins sent his reports. That is a matter I do not consider further, it not having been explored in the proceedings. What is relevant, however, is that by the time the applicant was finally offered the third contract in 1999, the relationship was in serious difficulty, Mr Norris having long since instructed his solicitors to pursue these proceedings. 156 It is this failure to provide work as promised which has led me to the view that the franchise agreement was relevantly unfair in that it did not ensure that the further work promised by Wizard was delivered when Mr Norris sought it, in accordance with the promises he had been made by Wizard in Mr LeBransky's correspondence. 157 Against those conclusions, I turn to consider the relief claimed. The applicant sought that the contract be declared void, which was opposed by the respondent, not only on the basis of the merit of the claims advanced, but also having in mind the consequences, the applicant having obtained confidential information from Wizard, which would no longer have the benefit of the confidentiality aspects of the agreement to protect itself against misuse of such information by Mr Norris. In my view, this was a particularly relevant aspect given that it was not only know how and training in issue, but manuals and other documents which the applicant retained in his possession. I take the view that in this case especially it is necessary take particular care to ensure that the relief is crafted having in mind the case made out by the applicant, but so as not to visit an injustice upon the respondents. 158 As to money orders, I observe that when cross examined, Mr Norris' position was that he was seeking the recovery of all that he had paid to Wizard under the contract, including the $1,500 paid in respect of training, the $15,000 paid in respect of the franchise fee and all of the royalties paid under the agreement, some of which Mr Nye had received. Finally, he also sought to have all his ties with Wizard severed, albeit he had initially sought to retain the benefit of the two existing contracts at Ballina. 159 Having all of these matters in mind, I take the view that the proper course is to vary the contract so as to provide for termination on notice. 160 As to monetary orders, I take the view that no case has been made out in respect of the $1,500 paid at the outset for training, which covered the cost not only of the training provided but accommodation as well. In particular, I reject Mr Norris' assessment that the training was but an opportunity for franchisors to be provided with unpaid labour. That view was inconsistent with the documentary evidence and that of Mr Collins, which I accept. 161 As I earlier noted, there was no real complaint by Mr Norris as to the support provided by Wizard in accordance with its obligations under the agreement, apart from the returns achieved on the two Ballina contracts and its failure to provide extra contracts. Indeed there was evidence of significant support, both of an administrative kind and in terms of marketing and the work performed in relation to the preparation of tenders. Mr Norris was satisfied with these aspects of the franchise. 162 During the period that Mr Nye held the master franchisee, there was also evidence of significant support from Mr Nye in relation to seeking work, marketing, tendering, physically assisting with cleaning work, general support and even lending his own equipment for a considerable period to Mr Norris to get him started. During this time Mr Nye received about half of the royalties paid to Wizard. I have concluded that no case was made out on the evidence for repayment of these royalties having regard to the benefits and support which flowed under the contract to Mr Norris in these respects, particularly given that I have concluded that no case has been made out that the two Ballina contracts were in reality unprofitable and that Mr Norris was not misled as to the nature of the franchise he was acquiring. 163 As to the $15,000 franchise fee, I note that the contract required payment of $40,000 for the franchise rights for a period of 10 years. By agreement, this was varied so that Mr Norris paid $15,000 on commencement of the agreement, the balance to be paid when contracts were obtained. No further payment was made. As I have noted, this case was developed for the applicant in part on the basis of conduct, in accordance with s106(2) of the Act. It is not, however, only the conduct of the respondents which must be taken into account, but also that of the applicant, when assessing what orders it would be just to make in the circumstances of the case. 164 The effect of the application brought here is in part to seek relief from the obligation to pay the $25,000 balance of the franchise fee which remains outstanding. The franchise agreement was entered in February 1998, something over 2 years ago. $40,000 over 10 years, equates to a franchise fee of $4,000 a year. Given the view which I have formed, that the relationship should be brought to an end by order of the Court having regard to the unfairness found, I have concluded that the just order in respect of this aspect of the claim is to require Wizard to repay $5,000 of the $15,000 franchise fee to Mr Norris 165 As to the complaints in relation to the two payments in respect of conferences which Mr Norris did not attend, I note that in relation to the first, which took place in mid 1999, it involved a sum of $50 and was a matter which the applicant had in reality never pursued with Wizard by way of complaint. Mr Norris was, on his evidence in cross examination, 'getting tired of the whole lot of it.' at that stage. I find no basis in the evidence upon which a money order could be made as to that claim. 166 As to the second conference in late 1999, the arrangement was that franchisees made contributions of $100 per month for the conference, held in Surfers Paradise, to a total of $1,100. Those travelling from interstate had their airfares, accommodation and meals paid, while local franchisees received only their accommodation. The scheme was that this arrangement would be reversed in future years when conferences were held in other locations in the future. Mr Norris was present at the franchisee meeting when this was agreed and didn't object to it, although he noted it was a situation where 'the majority ruled' and cast doubts on how much of the conference was actually devoted to work. He later chose not to attend. 167 I can find in these matters no basis for a monetary order against Wizard nor Mr Nye for repayment of this sum. 168 I turn then to the orders which should be made against the two respondents. How such orders are to be framed was discussed by the High Court in Brown v Rezitis (1971) 127 CLR 157 at pp165-166. These proceedings were brought against both Wizard and Mr Nye. I have concluded that the agreement was unfair as that word is understood under s105 of the Act in respect to Wizard's failure to make good its promise to provide work. I have, however, rejected the criticisms directed towards the conduct of Mr Nye in this and other respects. 169 It follows that no orders for the payment of any money can properly be directed against Mr Nye. It further follows from this conclusion that the applicant has made no case out against him and that as a consequence, an order for costs in favour of Mr Nye should be directed against the applicant. Orders 170 For all of these reasons, I make the following orders: 1. I vary the contract between Mr Norris and Wizard to provide for a franchise fee of $10,000 in lieu of $40,000. 2. I vary the contract between Mr Norris and Wizard to provide for termination upon notice expiring upon the date of the giving of this judgment. 3. Wizard is to pay Mr Norris the sum of $5,000. 4. Wizard is to bear Mr Norris' costs, as agreed or assessed. 5. Mr Norris is to bear Mr Nye's costs, as agreed or assessed. ------------------------ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.