Lipman and Anor v AG Lifestyle Management Pty Limited and Anor [2003] NSWIRComm 160
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Industrial Relations Commission of New South Wales
in Court Session
CITATION : Lipman and Anor v AG Lifestyle Management Pty Limited and Anor [2003] NSWIRComm 160
BRIGITTE LIPMAN
First Applicant
GARY CECIL LIPMAN
Second Applicant
PARTIES :
AG LIFESTYLE MANAGEMENT PTY LIMITED
(ACN 002 857 187)
First Respondent
AMANDA GORE
Second Respondent
FILE NUMBER: IRC 3967 of 2000
CORAM: Schmidt J
CATCHWORDS : Unfair contract - claim - identify for employer - inadequate rates of pay - failure to provide promised land - claim advanced on basis of award - identified as free work but money orders calculated by reference to award selected as a 'best fit 'for work - issue estoppel - contracts relied upon not established on evidence - difficulty in case advanced by way of reference to a 'best fit' award discussed - insufficient evidence - application dismissed
LEGISLATION CITED : Industrial Relations Act 1996
Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648, (1999) 93 IR 1
Bell & Berg v Macquarie Bank [2002] NSWIRComm 235
Brown v Rezitis (1970) 127 CLR 157
Federated Miscellaneous Workers' Union of Australia New South Wales Branch v Wilson Parking (NSW) Pty Ltd & Ors 1980 AR 352
Huskisson RSL Sub-Branch Club Ltd v Sullivan (1990) 20 NSWLR 332
Kingsmill Australia Pty Ltd v Federated Clubs Union [2001] NSWIRComm 141
Lane v Commonwealth Bank of Australia [2000] NSWIRComm 274
Laws v London Chronicle [1959] 1 WLR 698
CASES CITED : Brigitte Lipman and Anor v AG Lifestyle Management Pty Limited and Anor [2001] NSWIRComm 115
Brigitte Lipman and Anor v AG Lifestyle Management Pty Limited and Anor [2002] NSWIRComm 188
Gough v Gilmour Holdings Pty Ltd & Ors v Caterpillar of Australia Ltd (No 13) [2003] NSW NSWIRComm 26
McRann v United Globalcom.Inc and Ors [2003] NSWIRComm 131
Origin Energy Limited v Smith (2001) 111 IR 476
Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69
United Dominions Corporation Limited v Brian Proprietary Limited & Ors (1984) 157 CLR 1
Visalli v Southwell & Ors (1988) 12 NSWLR 502
Virtue v New South Wales Department of Education and Training (1999) 92 IR 428
HEARING DATES: 07/29/2002; 07/30/2002; 07/31/2002; 08/01/2002; 08/02/2002; 02/17/2003; 02/18/2003
DATE OF JUDGMENT:
05/23/2003
APPLICANT:
Ms K Nomchong of counsel
SOLICITORS:
Shanahan Tudhope
LEGAL REPRESENTATIVES:
RESPONDENTS:
Mr A Moses of counsel
SOLICITORS:
Tress Cocks & Maddox
JUDGMENT:
- 45 -
INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES
IN COURT SESSION
CORAM: Schmidt J
DATE: 23 May 2003
MATTER NUMBER IRC 3967 OF 2000
BRIGITTE LIPMAN AND ANOTHER v AG LIFESTYLE MANAGEMENT PTY LIMITED AND ANOTHER
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'). It concerned the contract under which the applicants, a husband and wife, worked at Buckenderra Holiday Village ('Buckenderra'), a caravan park near Cooma and the circumstances in which the contract came to be terminated.
2 The respondents adopted a somewhat unusual approach, filing a document entitled "Summary of Facts", rather than a response to the summons, as required by the Court's Rules. Much of that document did not appear to be concerned with the matters here in issue, but rather with events arising for consideration in other proceedings brought under s106 of the Act by a Mr Paul Singer, formerly a director of the two corporate entities involved in Buckenderra, and the first respondent, AG Lifestyle Management Pty Limited ('AGLM'). Ms Gore, the second respondent, was also a director of those three companies. The other two companies, Excellence in Corporate Marketing Pty Limited ('Excellence') and Timecks Pty Limited ('Timecks'), have been liquidated. It was not in dispute that both Mr Singer and Ms Gore had a beneficial interest in Excellence and Timecks, through various trust arrangements. Ms Gore also has a beneficial interest in AGLM.
3 The applicants filed a reply to the Summary of Facts and the matter proceeded to conciliation under s109 of the Act, which proved unsuccessful.
4 By notice of motion filed on 12 July 2002 the applicants sought to amend their summons. By agreement that application was dealt with on the first day of the hearing, when leave to amend was granted, the respondents not objecting to the application, but reserving their rights later to make submissions about the course taken by the applicants in the proceedings.
5 The original summons claimed that the applicants had been underpaid in their employment, to which the terms of the Private Hotels, Motels, Guest Houses etc., Employees (State) Wages Award applied in the case of Mrs Lipman and the Private Hotels, Motels, Guest Houses etc., Employees (State) Consolidated Award in the case of Mr Lipman. Monetary orders were sought, totalling $166,941.60 for underpayment of wages and in respect of notice.
6 The claim that an award applied to the applicants' employment was abandoned in the amended summons. Rather, it was claimed that the salary agreed by the parties, initially $45,000 in total for both applicants, including superannuation and later $45,000 plus statutory superannuation, was unfair in the circumstances of their employment. Reference was, however, made to the Miscellaneous Workers' General Services (State) Wages Award and the Miscellaneous Workers' General Services (State) Consolidated Award, as evidencing the unfairness claimed in relation to the remuneration paid to the applicants. The money claim was increased to $198,138.74.
7 The relief claimed in the amended summons was:
1. An order declaring that the contact and/or arrangement between the First and Second Applicants and the First Respondent, whereby the First and Second Applicants performed work for the First Responded (sic) in the hospitality industry was unfair, harsh or unconscionable or contrary to the public interest.
2. An order declaring that the contract and/or arrangements between the First and Second Applicants and the Second Respondent, whereby the First and Second applicants performed work for the Second Respondent in the hospitality industry was unfair, harsh or unconscionable or contrary to the public interest.
3. An order declaring void in whole or in part or varying in whole or in part and either from its commencement or from some other time the contract and/or arrangement between the First and Second Applicants and the First Respondent.
4. An order declaring void in whole or in part or varying in whole or in part and either from its commencement or from some other time the contract and/or arrangements between the First and Second Applicants and the First Respondent.
5. Further or in the alternative, and (sic) order varying the contract and/or arrangement between the First and Second Applicants and the First Respondent from its commencement or some other time in order to include the following items:
(a) The First Applicant's total remuneration package shall be $75,600 per annum and the Second Applicant's total remuneration package shall be $75,600 per annum.
(b) Upon termination of the contract and/or arrangement for any reason the Respondent shall give to the First and Second Applicants six months' notice of termination each or payment in lieu of such notice of termination.
(c) For the purposes of paragraph (b) above, notice shall be calculated on the Applicant's total remuneration package.
6. Further or in the alternative, an order varying the contract and/or arrangement between the First and Second Applicants and the Second Respondent from its commencement or some other time in order to include the following terms:
(a) The First Applicant's total remuneration package shall be $75,600 per annum and the Second Applicant's total remuneration package shall be $75,600 per annum.
(b) Upon termination of the contract and/or arrangement for any reason the Second Respondent shall give to the First and Second Applicants six months' notice of termination or payment in lieu of such notice of termination.
(c) For the purposes of paragraph (b) above, notice shall be calculated on the Applicants' total remuneration package.
7. Further or in the alternative, an order that the First and/or Second Respondent pay to the First and Second Applicants such amount of money in connection with the contract and/or arrangement so avoided or varied as may appear to be just in the circumstances.
8. An order that the first and/or Second Respondent pay to the First and Second Applicants interest upon such amount of money as is ordered to be paid to the First and Second Applicants in connection with the contract as such rates and in respect of such period of time as this Honourable Court considers appropriate.
9. An order that the First and/or Second Respondents pay the First and Second Applicants' costs of an incidental to these proceedings.
10. Such further or other orders as appear to this Honourable Court to be fit or just.
8 The money orders sought were:
A Total Remuneration Package for First Applicant
Period: 6 April 1998 to 1 June 1999 = 60 weeks
The First Applicant claims that her total remuneration package should be $75,600 per annum, calculated as follows:
Base salary: $70,000
Superannuation: (8%) $ 5,600 $75,600.00
Total remuneration for whole period of employment:
60 weeks at $75,600 per annum = $87,230.77
Less wages actually paid $25,961.40
$61,269.37
(B) Total Remuneration Package for Second Applicant
Period: 6 April 1998 to 1 June 1999 = 60 weeks
The Second Applicant claims that his total remuneration package should be $75,600 per annum, calculated as follows:
Base Salary: $70,000
Superannuation: (8%) $ 5,600 $75,600.00
Total remuneration for whole period of employment:
60 weeks at $75,600 per annum = $87,230.77
Less wages actually paid $25,961.40
$61,269.37
(C) Notice for First Applicant
6 months total remuneration @ 75,600 per annum $37,800.00
(D) Notice of Second Applicant
6 months total remuneration @ 75,600 per annum $37,800.00
(E) Total Amount claimed for Employment Period and Notice Period
$198,138.74
Total of items (A), (B), (C) and (D) =
(F) Interest
Interest on $198,138.74 at the rates prescribed by Schedule J of the Supreme Court Rules from 1 June 1999 to date of Judgement (9.5% pa from 1.6.99 to 29.2.00 and 10% pa thereafter)
(G) Costs
Evidence
9 The applicants gave evidence and called evidence from Fiona Bateman, forensic accountant, chartered accountant. In the respondents' case evidence was called from Ms Gore, professional speaker; Terence O'Grady, automotive technician; Cecleigh Mann, relief caravan park management for the Big Four chain; Gabrielle Cogan, legal secretary; Fiona Gorman, accountant for Cotton Seed Distributors; Gambhir Watts; certified practicing accountant; Tibor Singer, public company director and James Moir, tax agent and accountant. Various documents were also tendered.
The circumstances
10 The applicants came to be employed at Buckenderra after responding to an advertisement for a couple to work at the park. They were interviewed by Mr Paul Singer and Ms Cogan, his sister. She and her husband were the managers of Buckenderra. The applicants were advised that the salary would be $45,000 in total; that they could live at the park in a villa at a rent of $45 per week and that their hours would be from 8am to 6pm, over five days in one week and six the following. There was also a responsibility to be on call, every second night.
11 Mr Singer asked whether the salary was good enough and both applicants said yes. Their employment commenced on 6 April 1998. They were given a letter of appointment on Buckenderra letterhead, which promised that an agreement would later be drawn up by Buckenderra's solicitor, but this did not occur. The letter did not contain any reference which might have been expected, to the corporate entity which employed the applicants. There was an issue in the proceedings as to who the applicants' employer was.
12 The applicants' letter of appointment, provided to them by Mr Singer described their duties as:
Position: Gary Lipman
Groundsman, maintenance, general handyman
Position: Brigitte Lipman
Office and Shop duties, cleaning, Laundry work
13 There was evidence that the land on which the Village was built was owned by Timecks; that the Village was operated by Excellence and that AGLM funded its operations in part. Borrowings from AGLM and other lenders were used to purchase property, plant and equipment. AGLM paid some business expenses, including wages of the applicants and some other employees. Excellence paid other business expenses, including some wages. Ms Gore spoke to the applicants about this at one stage. Mr Singer told them that this was good for cash flow. Mr Lipman understood this to mean that available cash at Buckenderra could be used for building work underway at the Village. The business name, Buckenderra Holiday Village, also belonged to Timecks.
14 During her employment, Mrs Lipman had understood that she was employed by Buckenderra Holiday Village, although she was aware of the existence of the three corporate entities and their involvement in the operation of Buckenderra. Mr Lipman was not sure as to who his employer was, he had assumed it was the Village, but later learnt of the three companies. The applicants signed employment declaration forms, but the employer's name had not been completed. Later group certificates were issued to the Lipmans by Excellence and it was named as their employer on their tax returns, for the relevant period. On her evidence, Mrs Lipman took no notice of this. She believed the three companies ran the Village. Mr Lipman thought it was a matter for the three companies as to how they arranged their affairs.
15 Ms Cogan's evidence was that Mr Singer had told the applicants when they were first interviewed, that they would be employed by the operator of the Village, Excellence. While she was the manager of the Village, she issued letters, accounts and receipts in the name of the Village and operated an Excellence cheque account. Nothing was done in the name of AGLM, although it paid some expenses. Mr Watts' evidence was that Excellence initially paid staff, but later the accounts reflected payments by AGLM and loans to Excellence.
16 Ms Gore's evidence was that she provided working capital through AGLM, the Village having insufficient cash flow to meet expenses. AGLM had no interest in the Village. It provided unsecured loans to the other companies, which later went into liquidation. The Village was rundown when acquired. It was intended that various improvements would be carried out. The returns from the Village were insufficient to finance the business and so AGLM paid outgoings such as wages, insurance, superannuation, tax and so on.
17 Ms Gore worked as a motivational speaker and AGLM was the corporate vehicle through which that business operated. Ms Gore's evidence was that all shares in the company were owned by Ms Gore and her mother. It also sold books, tapes and videos, which Ms Gore created. This was the way in which the financial support AGLM provided to the other companies was raised. Bank loans were also taken out, with personal guarantees being provided by Mr Singer, Ms Gore and her mother, as well as other forms of security. Mr Singer's evidence was that he was also a shareholder of AGLM and that it was involved in property development, as well as operating a public speaking business.
18 There was an issue raised in the proceedings, to which I will return, as to whether the Village was operated by the three companies as a joint venture, or whether AGLM had merely been providing loans to assist finance of the venture. Neither Mr Singer nor Ms Gore were cross examined about the existence of any joint venture. Mr Singer's evidence in cross examination was that AGLM had a real interest in the way the Village was run and that the three companies operated as a group.
19 There was evidence that Mr Singer represented, both to the applicants and Ms Mann and her husband, that he owned Buckenderra with Ms Gore, his silent partner. Those representations were inconsistent with the evidence in these proceedings. Both Mr Singer and Ms Gore had a beneficial personal interest in the Village, through the trust arrangements earlier referred to.
20 Mr Singer was Ms Gore's financial adviser over a number of years. He advised her on the aqcuisition of Buckenderra, the incorporation and operation of the three companies, the operation of Buckenderra and other investments. Mr Singer was called to give evidence by the respondents. He described himself as a working director and confirmed that the Village was under his day-to-day management, although he frequently discussed with Ms Gore his ideas for Buckenderra and the steps being taken to develop and improve it. Ms Gore's evidence was to somewhat different effect, namely that she left the management of the Village to Mr Singer and relied upon him to manage the business, although she accepted that she maintained a close interest in the business. In 1999, Mr Singer and his wife went to live at the Village, while Ms Gore visited Buckenderra three or four times a year.
21 Ms Gore and Mr Singer had developed a close personal relationship over the years. She described him as her best friend, but denied that she had ever had a romantic relationship with him, or a desire to have one. Her evidence was contradicted by that of the applicants and Mr Singer.
22 Mr Lipman found Ms Gore's assistance, when present, disruptive. The applicants formed a friendly relationship with Mr Singer during their employment. He and Ms Cogan, prior to her departure, directed the applicants in their work. Ms Cogan and her husband left their employment as managers of Buckenderra in December 1997. Mr Singer and his wife married at that time and went away for three weeks, during which the applicants worked alone at Buckenderra, with the assistance of casual staff and daily contact from Ms Gore on operational matters. The Singers moved to the park in February 1998. The applicants' evidence was that they were then appointed as managers of the park. Their remuneration was increased by the payment of superannuation in addition to their annual salary. It had previously been included. Ms Gore denied this. Her evidence was that Mr Singer no longer wanted any managers, once he moved to the Village himself.
23 Even if their duties changed, there does not appear to have been any significant change in the applicants' working hours. They were lengthy albeit irregular, with Mr Singer on occasions telling them to take the day off. There was evidence that Mr Singer and Ms Gore were pleased with the applicants' work and that this resulted in discussions about the applicants building a house at Buckenderra, on which they could continue to live, even after retirement. In February, Ms Gore wrote to them in these terms:
'Dear Gary and Brigitte,
I wanted to personally write you a note to thankyou for the amazing job you have done at BHV.
Your 'sunny' enthusiasm has been so heartening to Paul and me - it's so exciting when there's an excited team! And thankyou for being a team with us - we couldn't ask for better team mates and partners - a family.
The way you have picked up from our pre Christmas drama and stabilise the office and park is exceptional - it's hard to find the words to express the gratitude I (and I know Paul) feel.
I hope we are able to support you as much as you have supported us - it will be great to have you build your home on 'your spot' and I would love to see you happy as 'pigs in mud' up there!
Thank you again for helping Paul and I start on our dream - to create an enchanted haven where people can learn to be families again - and I really look forward to us all being together as we build it.
Love Amanda
24 The applicants inspected a demountable house, which might have been suitable for erection at Buckenderra, while with Mr Singer and Ms Gore at the Caravan and Camping Show in Sydney in April 1999. There were problems in the applicants building a house at the Village, which was on rural land. Mr Singer's evidence was that advice was being sought about a lease of some land. Ms Gore's evidence was that the idea of the applicants building a house had been raised by Mr Lipman. She entertained the idea, given Mr Singer's satisfaction with the applicants' work. She was happy to encourage a long-term arrangement with them, but denied making any promises upon which the applicants relied. There were problems about them building at the site. On her understanding, the matter was under investigation.
25 In May, Ms Gore attended a staff meeting at the park, where future developments and staff roles were discussed in the proceedings. A falling out developed between Mr Singer and Ms Gore of which Mr Singer later informed staff. Ms Gore took steps to remove Mr Singer from his directorship of the three companies and excluded him from Buckenderra. Supreme Court proceedings ensued.
26 This falling out appears to have developed after Ms Gore had taken advice from a solicitor in relation to another property dispute in which she had been involved. Mr Singer had been advising Ms Gore about this matter and had attended several meetings with the solicitor and Ms Gore. Ms Gore became concerned about the extent to which she could continue to fund the Village. Eventually, Ms Gore received legal advice which led her to have a concern as to the way in which Buckenderra was being operated. Her solicitor believed the Village to be insolvent. Her legal advice was that she should attend the Village and investigate, without giving prior notice. There was a concern that evidence as to what had been going on at Buckenderra might be destroyed. Ms Gore did so, in the company of her accountant, Mr Watts and a friend, Mr Enklemann. Ms Gore went to Buckenderra unannounced. In cross examination, she explained that by then she had become concerned as to her physical safety, Mr Singer having a history of violence, when angered.
27 About a week prior to Ms Gore's arrival at Buckenderra, Mr Singer had explained to those working there of the disagreement between he and Ms Gore and that Ms Gore was seeking to deprive him of his interest in the business. There was some dispute in the evidence as to what was said by Mr Singer to the staff. Mr Lipman's evidence was that he said that Ms Gore might attempt to take over the Village and that he assured staff that he would find another caravan park, where they would be welcome to work. The Lipmans told him that they were leaving and going with him. Ms Mann's evidence was to similar effect. Ms Gorman's evidence was that Mr Singer said that Mrs Gore had been ripping him off and trying to take his share of the Village, but that he would look after staff when he started off his own caravan park. There was a measure of common ground that Mr Singer said he intended to acquire his own caravan park and promised to look after the workers. At that time Mr Singer asked, and various of the workers agreed, to write documents supportive of his management of Buckenderra. Some of the staff later changed their views about Mr Singer.
28 The Lipmans were part of those supportive of Mr Singer. Their attitude towards him did not alter and at the time of the hearing, they were employed at another caravan park, with which the public company of which Mr Singer is CEO is connected. They maintained their friendship, took the view that Mr Singer was not culpably associated with the unfairness about which complaint was made in these proceedings and did not seek to pursue him in relation to the complaints which they here advanced.
29 Ms Gore arrived at Buckenderra on 28 May. Mrs Lipman was away. There was a question as to her whereabouts. She was, in fact, at Mr Singer's house in Sydney, having been asked by Mr Singer to drive his wife and child there. Ms Gore's evidence was that Mr Lipman told her Mrs Lipman was in Canberra with her mother. He denied this.
30 While at the Village, Ms Gore entered Mr Singer's residence, where he had an office in the garage and where various of the Village records were kept. Mr Lipman saw her and told her that he had financial records at the office at his house, where he had been compiling trading figures for the ANZ Bank. Ms Gore informed him that Mr Singer was no longer a director and was barred from entering the Village; that he had not put any money into the Village and was sending her broke; had failed to honour his legal responsibilities to her companies; had misappropriated funds and had to be stopped.
31 Ms Gore's evidence was to different effect. She told Mr Lipman that technical and financial irregularities had come to light and that she had a concern that funds had gone missing. She was there to investigate. She was anxious and agitated and told Mr Lipman that she wanted their conversation kept confidential. She also raised the prospect that the Lipmans might take on the work of managers, with a salary increase.
32 It was common ground that Ms Gore interviewed Mr Lipman over a period of about 3 to 5 hours, about the management of the Village and agreed to meet with Mr Watts the next day, to go through the books. She also told Mr Lipman that she hoped the problems with Mr Singer could be resolved. Ms Gore's evidence was that he assured her that all the bills had been paid There was an issue about this in the evidence. Mr Lipman's evidence was that Ms Gore asked about creditors and Mr Lipman assured her they were under control, being in the vicinity of $50,000 to $70,000 over a 2 month period.
33 Mr Watts discovered outstanding creditors to exceed $50,000. Some staff had not been paid for 7 weeks. By the time the two companies were put in liquidation, creditors outstanding for over 30 to 90 days amounted to $175,000.
34 Another employee, Ms Fiona Gorman telephoned Mrs Lipman and advised her of Ms Gore's arrival. Mrs Lipman informed Mr Singer. There was a dispute as to whether Mrs Lipman then asked staff to lie to Ms Gore as to her whereabouts. The fact was, however, that Ms Gore was told that Mrs Lipman had gone to see her ill mother. This was untrue. Ms Lipman, however, denied asking other staff to lie for her.
35 Ms Mann's evidence was that Mr Lipman instructed her to ring Mr Singer to inform him that Ms Gore was there. Mrs Lipman called her and Ms Gorman and asked them to tell Ms Gore that her mother was ill and she needed Mr Lipman to call her. Mrs Lipman denied this, but Ms Mann acted accordingly. Mr Lipman did later telephone his wife. Mrs Lipman's evidence was that he was distressed by these events. Mr Lipman, however, denied this. He left the Village, he said, contrary to what he said to Ms Gore, because his wife was upset and she asked him to come to Sydney, even though she had their car. Mr Lipman also spoke to Mr Singer, who directed him to leave the park. Mr Lipman did so, taking with him the financial records on which he had been working and which Ms Gore had asked him to discuss with Mr Watts the following day, which he had agreed to do. Mr Lipman did not tell Ms Gore of Mr Singer's instructions, or his decision to act in accordance with them.
36 Late that evening Mr Lipman borrowed a car from Mr O'Grady, another worker at the Village, and told him that he was going to Sydney at about 6am. The evidence of Mr O'Grady and Ms Gorman was that Mr O'Grady asked Mr Lipman, 'Is there anything at your house that shouldn't be seen?' Mr Lipman replied, 'No. I have been fixing that up all week.'
37 When he was unable to sleep, Mr Lipman drove to Sydney through the night, taking with him a key to the office and the safe. The next day, Ms Cogan telephoned the Lipmans and advised that Ms Gore had gained entry to their home and had taken some Buckenderra records on which Mr Lipman had been working there. Mr Lipman explained that these records were then at the Lipmans' house, because Mr Singer had earlier directed Mr Lipman to perform some work on them, because the Village accounts were due to be taken to the ANZ Bank at Cooma, where Buckenderra's banking was done.
38 Mr Lipman then spoke to a police officer, who had been a long time friend, about Ms Gore's entry to his home. He was told to seek legal advice, because it was a civil matter. Mr Lipman then proposed to return to Buckenderra, but Mr Singer directed him first to take legal advice. The Lipmans did so on Monday and then returned to Buckenderra.
39 Ms Gore had, in the meantime, discovered that the Lipmans had been forging Mr Singer's name on cheques. Mr Watts drew to her attention that there were many blank cheque butts. Mrs Lipman's evidence was she had forged Mr Singer's signature at Mr Singer's direction. Mr Lipman had done likewise. Mr Singer confirmed this. Mr Lipman did not believe it to be illegal. Ms Gore had also given them her credit card details to use on occasions. Ms Gore met with other staff over the course of the day. She learnt that Mrs Lipman was not in Canberra after leaving several messages on her mobile phone, making enquiries as to her mother's health and when she was likely to return. Ms Mann told Ms Gore that Mrs Lipman was with Mr Singer in Sydney.
40 During the Lipmans' absence, the Village's first bus tour was due to arrive. This was an important business opportunity. Ms Gore was told by Ms Mann, or possibly Ms Gorman, that Mrs Lipman had instructed them to ensure that the weekend was a flop and that Ms Gore looked like a fool.
41 When the Lipmans arrived at Buckenderra, Ms Gore was still there, in the company of a security guard. In cross examination, Ms Gore explained that she had taken legal advice and had arranged for the presence of a security guard because of a staff concern that Mr Singer might return and react violently. The Lipmans found that other staff had been directed not to speak to them. Ms Gore denied this. Mr O'Grady's evidence was that when he returned his car, Mr Lipman asked him if he was going with them, he understood, to join Mr Singer. Mr Singer confirmed that he had already discussed with staff setting up another caravan park.
42 Ms Gore had also taken legal advice about the Lipman's actions and upon their arrival informed the Lipmans that their employment had been terminated for wilful misconduct and that no payments would be made to them on termination. Her advice was that they were not entitled to any payment. The Lipmans' case was that Ms Gore refused to give them details and referred them to her solicitor and suggested that they, too, should take legal advice. She refused them entry to the park, or their home and directed them to leave.
43 Ms Gore's evidence was that they did not ask for reasons for their dismissal and that she did not deny them access. The Lipmans' evidence was that Ms Gore refused to give them access even to collect their belongings, but relented to the extent that they were permitted to take their clothes, but not their other possessions, which included furniture. She told them to make a suitable time and date to collect their other belongings and were given a letter confirming their termination. Mr Lipman returned his keys. Ms Gore also denied this. On her evidence, Mr Lipman was very aggressive towards her, but the Lipmans took their belongings in the presence of herself, the security guard and Mr Mann. She typed up a termination letter while she asked them to wait. She had not had one prepared, because she did not expect them to arrive at the Village at 7am in the morning, having had no response to her telephone messages. Mrs Lipman was with the security guard when she shouted at Ms Gore: 'How could you do this to Paul?' Their car was full and they left because they could take no more. An inventory of what was left behind was then taken, to ensure that no confusion could arise later.
44 The Lipmans returned several days later in the company of a police officer and Mr Singer, who told them they were reinstated in their employment. They understood that he had obtained an order from the Supreme Court and that he remained a director of the companies. A security guard was present, Ms Gore was contacted and they were then given access to their home, where they found that their belongings had been searched. They were not permitted to remove anything. The next day they returned, expecting to see Ms Gore, but she had not arrived. They left again, because the guard refused to permit them to remove belongings. They were collected later. The remainder was boxed up by someone at Buckenderra and when they later retrieved them, the Lipmans found some items missing and others affected by damp and rodents.
45 It was common ground that the Lipmans never received any payments on termination and no further explanation as to the reason for their dismissal.
46 Ms Gore's evidence was that as the result of relying on Mr Singer's advice, particularly in relation to the Buckenderra investment, she had lost most of her life savings. In September 2000, Ms went to the United States to work, in order to restore her financial position. In cross examination she explained that she had received advice from Ernst and Young that Timecks and Excellence were insolvent and that they should be put into liquidation, When she understood what insolvency was, she accepted that advice. She denied that she had acted to deprive Mr Singer of assets or to ensure that the applicants had no source of recompense.
47 The applicants obtained other employment at another caravan park in August 1999, where Mrs Lipman was employed as a caretaker under the Miscellaneous Workers General Services (State) Award. Salary was $418.50 per week with rental for on site accommodation $120 per week. Mr Lipman obtained a similar position on the same terms.
The resulting litigation
48 After their dismissal, the applicants brought proceedings against Excellence and AGLM under s84 of the Act, alleging unfair dismissal. The applicants conceded in the proceedings that Excellence was their employer, after Commissioner McLeay had listed that question for separate hearing. When Excellence was later put into liquidation, by consent the proceedings were dismissed.
49 The applicants later commenced and unsuccessfully sought mareva injunctions against the respondents in these proceedings. (See Brigitte Lipman and Anor v AG Lifestyle Management Pty Limited and Anor [2001] NSWIRComm 115.)
50 Given the way in which this case developed, it is helpful to observe at this point, that despite the concession that Excellence had been their employer, when the case for the applicants was opened in these proceedings, it was on the basis that the applicants were not certain as to the identity of their employer. It was then put by Ms Nomchong of counsel that there was a web of financial dealings between Mr Singer and Ms Gore, with three companies involved in the operation of the Village. It was submitted that the Village was really a joint venture of the three companies of which Mr Singer and Ms Gore were the two principals who each received the benefit of the applicants' work. It was also put that the fact that Ms Gore ultimately lost money as the result of the failure of the venture, could not stand in the way of the relief sought being granted. The case, so put, appeared to depart from the claims in the amended summons, where it was alleged that the applicants had performed work for AGLM and Ms Gore .
51 When the applicants closed their evidentiary case, Mr Moses of counsel for the respondents, put a no case to answer submission and made an application that in the particular circumstances, the respondents should be relieved of the obligation to make an election as to the calling of evidence, if the no case submission was put. The application was opposed and after hearing argument, I declined to exercise the Court's discretion to permit a departure from the general rule that such an election must be made, in the particular circumstances here prevailing. (See the interlocutory judgment of 1 August, Brigitte Lipman & Anor v AG Lifestyle Pty Limited & Anor [2002] NSWIRComm 188.)
52 In the course of Mr Moses' submissions, he also indicated that it would be submitted that the applicants' claim was inconsistent with the provisions of s109A of the Act. It was argued that the summons alleged that contracts or arrangements under which work was performed existed between the applicants and both respondents, but there was no evidence that any such contracts or arrangements ever existed. The evidence, at that point, had revealed that not only had the applicants earlier brought unfair dismissal proceedings under s84 of the Act against Excellence and AGLM, alleging that their dismissal had been unfair, it had there been conceded that Excellence was their employer. Those proceedings had then been dismissed by consent, after the applicants had learnt that Excellence had been placed into liquidation. While the applicants had not here led evidence as to the complaints they had made in the s84 proceedings, or what had transpired at the proceedings before Commissioner McLeay, who had listed for hearing the question of the identity of the employer, evidence was led as to instructions given by the applicants' solicitors to the expert called in their case, Ms Bateman. Those instructions explained the circumstances in which the unfair dismissal proceedings were brought to an end. This situation, it was submitted, either gave rise to an estoppel point, or at the least established on the evidence that Excellence was the applicants' employer.
53 It was also submitted that the applicants' case reflected a 'confused mass of ideas and arguments' as to the question of what contract or arrangement had existed. The evidence could not permit a finding that the respondents were parties to the contracts or arrangements alleged. It was pointed out that the alleged case advanced against Ms Gore was not that she had some culpable association with the applicants' employment. Nor had that been demonstrated. Rather, it was alleged that she was a party to such a contractual arrangement.
54 Ms Nomchong then submitted in response, that it would be the applicants' case that the applicants 'were treated as employees but in fact there is no valid or legally enforceable employment contract. There was no Award that applied to them.' It was also explained that this submission was put in order to meet an argument which the respondents had foreshadowed, in relation to the provisions of s109A of the Act. It was also further explained, "It is a submission we need to put on the basis if Mr Moses is going to run the s109A point the onus falls upon him to establish who the contract of employment was with. In terms of running a s106 there is no obligation on the applicants to determine a contract of employment. The only obligation is to determine there was a contract or arrangement or collateral arrangement under which work was performed." Despite the concession in the s84 proceedings, that Excellence was the employer, the question of whether there was any employment relationship at all and who the employer was, were submitted not to be issues arising in these proceedings. The applicants had no onus to prove any employment relationship had existed, only that work was performed under a contract or arrangement.
55 Mr Moses expressed surprise at these submissions, given the claims advanced in the amended summons and the way in which the case had been opened. It was submitted to be untenable for the applicants to now assert that they were not employees, when they perceived that s109A of the Act presented some difficulties for them. Nor could they ignore the concession made before the Commission, that Excellence was their employer.
56 As the case unfolded however, these submissions were not persisted with by the applicants. They were, of course, inconsistent with the application here made, as both the original and amended summonses reveal. They were also inconsistent with the evidence given by the applicants, as to their understanding that they were each employees, but uncertain as to the identity of their employer; with the evidence as to how the applicants were treated and how they conducted themselves. They were also inconsistent with the application made under s84 and the concession made in those proceedings as to their employment by Excellence.
The parties' respective cases
57 The case as finally put for the applicants by Ms Nomchong of counsel in closing, was different in some important respects from the claim in the amended summons, the way in which the case was opened and the submissions advanced in response to the respondents' no case submission. I will deal with this below. There were also some differences between the way in which the case was put in written submissions and orally.
58 I note at this point that it was finally submitted that the Court had jurisdiction to entertain the claims made in relation to the contract and arrangements between the applicants and the respondents, including the arrangement made in 1998, whereby Ms Gore and Mr Singer promised the applicants that they could build a house at Buckenderra and remain there after their retirement.
59 It was submitted to be difficult to determine who the applicants' employer was and that this evidenced the requisite unfairness of the challenged contracts and arrangements. The Court's jurisdiction did not, however, depend upon identification of the employer, because orders could be made against persons and entities who were not parties to the contracts in question. In the alternative, it was submitted that the evidence demonstrated that the Village was conducted as a joint venture by the three companies Excellence, Timecks and AGLM, so that they each had joint and several liability for the obligations incurred by the venture, including in relation to the applicants' claim in these proceedings.
60 In oral argument it was further put that the failure to properly identify the employer was a ground of unfairness in relation to the impugned contracts. It was put that, "The jurisdiction is simply enlivened by the fact that work was performed under a contract or arrangement. We say that it is not necessary to go into the exercise of identifying the employer because for the purposes of these proceedings the steps that occur are these, your Honour. First of all, the contract or arrangement under which work is performed is found to exist. If that contract or arrangement is found to exist, then the Commission looks at all of the circumstances of the case and determines whether or not that contract or arrangement or the conduct of the parties under that arrangement were unfair on their face or in their operation. Then thirdly, the Commission comes to the view as to whether or not the respondents as identified in the proceedings bore any culpability in relation to that unfairness and if so whether orders should be made." It was also argued that while the evidence showed Excellence had its name on the employment declaration form and other documents, the evidence, on the whole pointed to AGLM being the employer. The evidence also showed that the three companies were organised so as to provide the most beneficial outcome for Ms Gore.
61 It was further put that "We say that there is a sufficient evidence for this Commission to find that there was in fact an arrangement or a contract that existed between the first and second respondents and the applicants. The way in which we put it is that there was either a contract of employment between the applicants and the first respondent or there was a contract of employment between the applicants and a joint venture in which the first respondent was a partner."
62 It was also argued that the applicants' contracts would be found unfair, because the remuneration provided in return for the hours worked, was manifestly unfair. The joint salary of $45,000 was calculated to represent an hourly rate for each applicant of $10.82, based on a 40 hour week. The evidence demonstrated that the hours worked were 8am to 6.30pm, including work on weekends and public holidays and significant overtime, during regular callouts, 3 to 4 times a week, most especially on weekends.
63 To demonstrate the alleged unfairness, reliance was placed upon calculations made on the basis of the rate for the caretaker classification in the Miscellaneous Workers - General Services (State) Award ('the General Services Award'). It was submitted that this award did not apply to the employment, although it provided a 'best fit'. If pressed, it was put that it was the award which applied to the early part of the employment. Otherwise the applicants were award free.
64 How the view that this award, rather than any other applied, or provided a 'best fit', was not the subject of any explanation. Rather, it was explained that "I did undertake a very thorough investigation of what, if any, award would have applied to the work performed by the applicants. The award arrangements for people working at caravan parks is an enormously difficult award and enterprise arrangement structure, and since the implementation of productivity arrangements and classification structures, it is my submission that in order for the applicants to have been covered by those awards for the work that they did, they would have actually require training or qualifications in order to receive the correct classification under the awards."
65 It was, nevertheless, submitted that the calculation upon which the applicants relied demonstrated the manifest inadequacy of the contractual remuneration. Payment under the General Services Award for the hours worked resulted in annual salary of some $78,555 for Mr Lipman and some $72,684 for Mrs Lipman. Given the duties which the Lipmans performed, it was argued that they should have received higher rates than those provided by that award. It was also submitted to be open to the Court to use the calculation of the award payment as a minimum, or base, upon which to assess the appropriate compensation due to the applicants.
66 It was further submitted that the failure to honour the promise made in relation to the Lipmans building a house at Buckenderra, was relevant to an assessment of the remuneration claim. It was accepted that the promise was not contractual, but argued that s106 was not so confined. It was explained that the applicants had accepted this promise and had relied upon it. Their view was that it had ameliorated the unfairness of the low remuneration which they were paid. The failure to make good the promise, following upon the termination of the employment, had shown that it had a value of some $78,790 to the applicants, given an expectation that they would have lived in the house for some 20 years and now had to pay rent. It was put further that the Commission also had power to make an order for compensation, for the loss of the land.
67 Detailed submissions were advanced as to the unfairness of the respondents' conduct in summarily dismissing the applicants from their employment and the resulting unfairness of the contract. These complaints went to both procedure and an absence of proper grounds for the termination, as well as matters such as the unauthorised entry into the applicants' house, the use of the security guard and the failure to make payments in respect of notice or outstanding annual leave.
68 As to the order sought against Ms Gore, it was submitted that the evidence had demonstrated her requisite culpable association with the unfair contract. As to why Mr Singer had not been joined as a respondent, given his involvement in the matters about which complaint was advanced, the explanation given was that he had had no involvement in the applicants' dismissal and had given the applicants assistance when their employment was terminated. It was argued that the evidence had demonstrated that both respondents had received the benefit of the applicants' work at the Village and that orders would, as matter of justice, be made against them as a result.
69 Submissions were also advanced in relation to the operation of s109A of the Act, which it was submitted did not preclude the claims which the applicants advanced. The orders sought were explained. As to notice claimed, it was submitted that prevailing industrial or community standards were relevant, as was the arrangement in relation to the promised house at Buckenderra.
70 The case for the respondents advanced by Mr Moses of counsel, was that the claims must be dismissed, the applicants having failed to establish the claims advanced in the amended summons, namely that the applicants had performed work for the respondents pursuant to a contract or arrangement. Complaints were advanced as to the 'shifting sands' with which the respondents had been confronted in the proceedings, particularly as to whom it was that the respondents alleged had employed the applicants at the Village. It was submitted that prior to closing submissions, it had not seriously been claimed that the applicants had been employed by a joint venture between the three companies. Nor had it been asserted in the summons that orders would be made against Ms Gore, as the result of her culpable association with such employment and any unfairness in the contracts or arrangements between the parties thereto. Rather, the claim advanced was that the applicants had performed work for AGLM and Ms Gore under contracts and/or arrangement between them and the applicants.
71 It was submitted that the applicants were obliged to put the respondents on notice of the case to be advanced against them, by their pleadings. The problems in the summons which the applicants advanced had been revealed to them long ago in the no case submissions advanced by the respondents. Despite this, the applicants had not sought to amend the summons to deal with those problems. It was now too late for the applicants to seek to alter the case they advanced in their final submissions.
72 On the evidence, the applicants had not established that the contracts and arrangements alleged in their amended summons to have been unfair, had ever, in fact, existed. The summons made no reference to issues concerning the alleged conduct of Ms Gore. Nor had any unfairness of such contracts been demonstrated. The Court was bound to follow the approach of the Full Court in Origin Energy Limited v Smith (2001) 111 IR 476 at p480. As explained in Virtue v New South Wales Department of Education and Training (1999) 92 IR 428, what initially required consideration was which contract was being declared unfair and the subject of variation orders. The evidence had not established that any contract or arrangement existed between the applicants and the respondents, whereby they performed work in the hospitality industry. The evidence showed that the applicants worked at the Village for Excellence, the company which operated it. Indeed, there had not even been any demonstration of the fact that the respondents had received any benefits, to the detriment of the applicants. It followed that the summons must be dismissed.
73 As to the claims advanced in relation to unreasonable remuneration, it was submitted that the evidence did not establish a basis for any relief to be granted. The claim was not based on any applicable award, nor was it a claim for recovery of money.
74 As to the dismissal claim, the evidence did not permit the relief sought to be granted, either as a matter of discretion or jurisdiction. The complaints concerned the absence of reasons, which would have permitted the applicants to be summarily dismissed and the unfairness of the procedures followed. Those complaints were ones available to be pursued under s84 of the Act and so were precluded by s109A. Submissions were also advanced as to the proper construction of the latter section.
Consideration
75 The case presented by the applicants raised a number of difficulties, not the least of them as to the existence of the contracts and arrangements alleged to have been unfair. On the evidence, the identity of their employer had provided no difficulties for the applicants, prior to the liquidation of Excellence. They were employed by a director of that company, Mr Singer to whom they reported and who gave them instructions in relation to their work at the Village. Excellence operated the business and provided to the applicants' group certificates and other relevant documents.
76 The applicants' employment was terminated by another director of Excellence, Ms Gore, whereupon they commenced proceedings against Excellence and AGLM under s84 of the Act. The only connection between the applicants and AGLM appears to have been in relation to the payments made to them. An issue arose in the unfair dismissal proceedings as to who the employer was, which was listed for hearing. The difficulty was resolved by the parties. It became common ground in those proceedings that Excellence was the employer. The proceedings apparently later came to an end, however, after that company was liquidated. As the applicants' instructions to the expert called by the applicants made clear, this was a problem which the applicants wished to overcome in these proceedings.
77 The liquidation was, no doubt, an unfortunate development from the applicants' point of view. It cannot, however, provide a firm foundation for any argument that the applicants were, in fact, employed by some other person or entity. The claims advanced in these proceedings were that the applicants worked for AGLM and Ms Gore.
78 I am not at all satisfied that the applicants are free, in these proceedings, to simply ignore the agreements reached in the unfair dismissal proceedings, as to the identity of their employer. (See the recent discussion by Peterson J in McRann v United Globalcom.Inc and Ors [2003] NSWIRComm 131 at [34] to [36].) They were legally represented in the s84 proceedings. It is difficult to see how that question is not now the subject of issue estoppel, at the least as between the applicants and AGLM, given the applicants' admission as to the identity of their employer.
79 In any event, the evidence in these proceedings did not establish that the applicants were employed by either respondent, nor that they performed work in the hospitality industry for either respondent, under any contract or arrangement as alleged. There was no evidence as to the existence of such a contract or arrangement, apart from the employment contract. Any other relationship was not asserted by the applicants to have existed in their evidence. Nor was it a matter about which either Ms Gore, or Mr Singer, were cross examined.
80 The evidence showed that AGLM made various payments in respect of the expenses incurred by the Village, including the applicants' wages. While the accounts originally prepared by Mr Watts under Mr Singer's direction, which both Mr Singer and Ms Gore signed as directors, incorrectly reflected that these sums had been advanced to Excellence by AGLM in payment of a consulting fee, the correct position was that the sums advanced represented a loan from AGLM to Excellence. This was the evidence of both Mr Watts and Mr Singer. After Mr Singer's departure, the accounts were corrected to reflect the correct position.
81 Ms Bateman, Mr Moir, Mr Singer, Ms Gore and Mr Watts each gave evidence about these transactions, and the journal entries which later effected the transfer of some assets from Excellence to AGLM, in repayment of these loans, prior to the liquidation of Excellence. It was Ms Bateman's view that these entries reflected preferential treatment of the assets, for the benefit of AGLM, because prior to the transfers AGLM was an unsecured creditor and afterwards, it was owed nothing by Excellence. AGLM also derived taxation benefits from various transactions, which in Ms Bateman's view were not conducted at arms length. On Ms Bateman's approach, it followed that as a shareholder in AGLM, Ms Gore benefited from these arrangements.
82 Ms Bateman's evidence was that the financial records also demonstrated that Ms Gore was the controlling director of AGLM and that she exercised managerial control over all three entities. This view was difficult to reconcile with the evidence given by Ms Gore and Mr Singer in these proceedings.
83 The evidence of Mr Moir was that he had prepared tax returns for Ms Gore and the three companies for some years, based on the information provided through Mr Watts. He disagreed with Ms Bateman's views. As to tax losses, his view was that the transfer of losses between related companies was a legitimate means of ensuring that as a group, companies are taxed at the appropriate rate under the applicable legislation. As to assets, his evidence was that Ms Bateman's views as to preferential treatment of AGLM through the transfer of assets she identified in her report were entirely incorrect. Had they accurately reflected the nature of these transactions, in the liquidation, the liquidators of Excellence and Timecks would undoubtedly have acted to claw back from AGLM the assets or funds involved. That had not occurred.
84 Mr Moir's evidence was that there had been no preferential treatment and that AGLM's accounts showed nearly a $1.7million loss for the year ended 30 June 1998, as a result of its relationship with Timecks and Excellence. AGLM's operating profits would continue to be reduced in future, to the extent of that loss.
85 Mr Watt's evidence was that while Mr Singer was a director of the three companies, the accounts, which Mr Singer and Ms Gore signed as directors, were prepared to reflect Mr Singer's instructions to him. Ms Gore's evidence was that she relied on Mr Singer and the companies' accountants, as to the accuracy of the records when she signed the accounts. She denied that they were prepared on her instructions.
86 It was on the basis of the evidence about these matters, that in closing the case it was submitted for the applicants that the Village had been run as a joint venture by the three companies and that the applicants had performed work for the joint venture, pursuant to a contract or arrangement. It followed, so it was argued, that the three companies shared joint and several liability for the moneys owed to the applicants arising from these proceedings. The respondents' complaint that such claims formed no part of either the applicants' original or amended summonses, was undoubtedly correct.
87 I earlier outlined the various submissions advanced by the applicants as to the nature of the contracts and arrangements which were complained to have been relevantly unfair, as they developed over time. Unsurprisingly, the respondents complained about these 'shifting sands'.
88 The evidence did not leave room for doubt that the applicants were employees in the work which they performed at Buckenderra. That was what was advertised, what the applicants sought, what they were offered and accepted, what they understood themselves to be and how they were treated. As I have noted, the evidence did not, however, establish that they were employed to work for either AGLM or Ms Gore. Nor did it establish that they were employed by a joint venture in which AGLM was a partner with the other two companies. This was not put to Ms Gore or Mr Singer in cross examination. Had it been a construction of the circumstances seriously to be pressed in the proceedings, one would have expected it to have been included in the summons, by further amendment if necessary. That it was an idea developed in the submissions made after it was put in the no case argument, that the applicants were not employees at all, served to further demonstrate that it was an idea not seriously raised, or pursued, as an issue in the proceedings.
89 In Gough v Gilmour Holdings Pty Ltd & Ors v Caterpillar of Australia Ltd (No 13) [2003] NSW NSWIRComm 26, Boland J discussed the role of pleadings in s106 proceedings at [21] to [26]. I agree with those observations. This was not a case where it could be concluded that the idea of the joint venture was an issue in the proceedings available to be developed by the applicants, without amendment of the pleadings.
90 It should also be noted that reliance was placed for the applicants upon the decision of the High Court in United Dominions Corporation Limited v Brian Proprietary Limited & Ors (1984) 157 CLR 1, as to the nature of a joint venture. It is helpful to consider what was there said. At pp10-11, Mason, Brennan and Deane JJ, observed:
'The term "joint venture" is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots' law, "adventure") will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership. The borderline between what can properly be described as a "joint venture" and what should more properly be seen as no more than a simple contractual relationship may on occasion be blurred. Thus, where one party contributes only money or other property, it may sometimes be difficult to determine whether a relationship is a joint venture in which both parties are entitled to a share of profits or a simple contract of loan or a lease under which the interest or rent payable to the party providing the money or property is determined by reference to the profits made by the other. One would need a more confined and precise notion of what constitutes a "joint venture" than that which the term bears as a matter of ordinary language before it could be said by way of general proposition that the relationship between joint venturers is necessarily a fiduciary one (but cf. per Cardozo C.J., Meinhard v. Salmon (1928) 249 N.Y. 458, at p.462; 164 NE 545, at p 546). The most that can be said is that whether or not the relationship between joint venturers is fiduciary will depend upon the form which the particular joint venture takes and upon the content of the obligations which the parties to it have undertaken. If the joint venture takes the form of a partnership, the fact that it is confined to one joint undertaking as distinct from being a continuing relationship will not prevent the relationship between the joint venturers from being a fiduciary one. In such a case, the joint venturers will be under fiduciary duties to one another, including fiduciary duties in relation to property the subject of the joint venture, which are the ordinary incidents of the partnership relationship, though those fiduciary duties will be moulded to the character of the particular relationship (see, generally, Birtchnell v. Equity Trustees, Executors and Agency Co. Ltd . (1929) 42 CLR 384, at pp 407-409).'
91 The evidence in this case fell a long way short of establishing that Buckenderra was operated as a joint venture between the three companies, rather than AGLM's involvement being on the basis of loans from a related company. Even if such a joint venture were established, the joint and several liability in respect of any money order made in favour of the applicants in these proceedings would not thereby necessarily follow as a matter of course, as asserted.
92 The evidence as to the injection of funds from AGLM into the Buckenderra business, does not, of itself, establish the existence of the joint venture finally asserted. The evidence was that when acquired, the Village was rundown, that it was intended that it be refurbished and that it never generated sufficient returns in order to operate without other support. Excellence was the company operating the business. Timecks owned the assets. The directors of Excellence obviously had obligations not to trade, if its debts could not be met. Funds were provided to Excellence by way of loan from AGLM. When Ms Gore became concerned as to the rising level of creditors of the business, her legal advice was that she had to step in to satisfy herself as to the position, because the business appeared to be insolvent. Unpaid creditors were found to amount to $175,000. The source of the necessary funding for the Village from AGLM dried up as a result and, unsurprisingly, Excellence and Timecks were ultimately liquidated, with considerable losses being incurred and regrettable consequences for employees like the applicants.
93 Mr Singer advanced the view in cross examination, that there had been no need for the business to be wound up at all, given the original aim of improving the Village. He believed that the reason Ms Gore had acted to place Timecks and Excellence into liquidation, was because she had cash flow problems and required money to fund a new acquisition in Adelaide. This belief tended to confirm that AGLM's involvement in the Village was as a source of funds to the other two companies which owned and operated that business, rather than as a partner in any joint venture. The fact that Mr Singer and Ms Gore had differing beneficial interests in the three companies and did not agree about the future of the business of the Village, also tended to reinforce this conclusion.
94 The fact remains however, that the summons did not allege that such a joint venture had existed, or that the applicants had been employed by one of the joint venture partners, so that AGLM had responsibility for the unfairness of their contracts of employment, as a joint venturer. While the view taken by the majority in Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69 was that it was proper to regard the use of the word 'contract' in the applicants' claim as comprehending the full meaning of the word as defined in s105, it is still necessary to have regard to the complaints which an applicant advances in the summons in resolving the issues arising between the parties. The claims made here were that the applicants had performed work for AGLM and Ms Gore. The evidence simply did not permit the conclusion that the applicants had ever worked for either. No witnesses called by either the applicants or the respondents, gave evidence to that effect. Nor did the documents in evidence support such a conclusion.
95 It follows that the basis upon which this claim was advanced was not made out and for that reason must be dismissed. It is convenient to note, in addition however, that even if the summons was viewed as alleging unfairness in the contract or arrangement pursuant to which the applicants were employed by Excellence and that the complaints advanced against AGLM or Ms Gore, were being directed towards their culpable association with that the unfairness of that contract, significant difficulties lay in the way of any relief being granted to the applicants.
96 I will deal with these difficulties despite the other conclusions which I have reached, given the cases advanced. There were essentially two complaints made. The first, in relation to the inadequate remuneration paid and the second, the applicants' dismissal for misconduct.
97 As to the remuneration claim, it is obvious that the evidence showed that the applicants were paid low rates for the hours worked, $45,000 per annum for both of them. There was no complaint finally pressed, however, that they had been underpaid, having regard to the terms of any applicable award. Given the duties that the applicants were employed to perform, as their letter of employment made clear, it is difficult to understand why it was asserted that the applicants' employment was not covered by any award.
98 Mr Lipman was employed to perform groundsman, maintenance and handyman work. Mrs Lipman was employed to perform office and shop duties, cleaning and laundry work. There are awards in this State which apply to such work and well established law on how the applicable award is to be determined, in cases where more than one award arguably applies. In such a case, questions of award construction or the 'major and substantial test' can arise - see Kingsmill Australia Pty Ltd v Federated Clubs Union [2001] NSWIRComm 141.
99 The case finally pressed for the applicants was, however, that there was no award at all which applied to their employment and the award relied upon had been selected only on a 'best fit' basis. How this followed from the duties for which the applicants were engaged, was not explained. Reference was made to the award rates for the classification of caretaker, which it was explained in submissions, the applicants would say, 'if pressed' applied to the early part of the work. Given the award definition of that classification, the work which the applicants were engaged to perform and the evidence of the work of the managers engaged on site at the park at that time, it is difficult to see how it was that Mr and Mrs Lipman fell into this classification, in the early part of their employment. I also note in passing that that award also contains a cleaner classification, to which no reference was made.
100 It seems to me that there is real difficulty flowing from the way in which the case was so advanced. The evidence and submissions were not such as to permit any conclusion to be reached as to the award applicable to the employment, at any stage. It might be the case that the work for which the applicants were employed was award free, although I have little confidence that this was the case. It followed, unavoidably, that to approach the claimed inadequacy of the remuneration paid to the applicants, on the basis that the payment was less than that which would have flowed to a caretaker employed under the General Services Award, raised significant difficulty.
101 An unfair contract is defined in s105 as:
'"unfair contract" means a contract:
(a) that is unfair, harsh or unconscionable, or
(b) that is against the public interest, or
(c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or
(d) that is designed to, or does, avoid the provisions of an industrial instrument.'
102 In order for relief to be granted, the evidence has to establish the alleged unfairness. Given the definition, a contract of employment which provides for a rate of pay which is unarguably low, may be open to ready attack, for example, by reference to rates fixed by a relevant award. Such an attack may require an answer, if relief under the section is not to be ordered. (See for example the Federated Miscellaneous Workers' Union of Australia New South Wales Branch v Wilson Parking (NSW) Pty Ltd & Ors 1980 AR 352 at 363.) In this case, however, that exercise was not attempted.
103 Any perceived difficulty in the exercise of identification of an applicable award, cannot, it seems to me, provide a basis for ignoring the statutory scheme.
104 In Huskisson RSL Sub-Branch Club Ltd v Sullivan (1990) 20 NSWLR 332, the former Commission in Court Session discussed the concept of using s88F of the Industrial Arbitration Act 1940, (a predecessor to s106), in circumstances where a claim lay under s92 of that Act for recovery of award wages. The view taken was that special characteristics of such a claim would have to exist, in order that it might properly be brought under s88F. That approach appears to follow that discussed by Barwick CJ in Brown v Rezitis (1970) 127 CLR 157 at p167. It seems to me that conceptually, such circumstances cannot be established merely by a perceived difficulty in identifying the applicable award. The failure to attempt that exercise, puts at risk the claim brought under s106.
105 In my view it will be difficult to establish that a contract is relevantly unfair, merely by showing that if the hours in question had involved work to which an identified award applied, which it is submitted however, did not, in fact, apply to the work in question, that higher rates of pay would have followed. Here, the comparison was said to be relevant, because while the work was award free, the selected award was a 'best fit' for the work in question. However, no attempt was made to establish the foundation for that view. The result was that it was a conclusion impossible to test, so as to safely permit the view that the unfairness of the contract had been established by the comparison relied upon.
106 It may, after all, be the case that were evidence to be led as to the awards which were considered in the exercise conducted to identify the 'best fit' award, that a different award to that relied upon would be regarded by the Court as providing a proper foundation for considering any unfairness in the amount paid by way of remuneration. Alternatively, a conclusion that another award, in fact, applied to the work in question might be reached. That possibility carried with it considerable consequences, given the claims here advanced. It cannot be overlooked that in the original summons, for example, the remuneration claim advanced by reference to the Private Hotels Award, amounted to an underpayment of some $32,800 for each applicant. In the amended summons, where the Miscellaneous Workers' Award was relied upon, this claim was increased to some $61,500.
107 The other possibility is that the exercise to find a 'best fit' award, might have been entirely rejected as providing a foundation for the claims advanced. In this case, awards which applied to the work of groundsmen, maintenance staff, cleaners, shop employees or laundry staff, would all appear relevant to such an exercise, as would any awards which applied to those employed at caravan or recreation parks, such as the Village.
108 The explanation advanced in submissions as to why reliance on the awards referred to in the original summons was abandoned, was because of difficulty in identifying which classification in those awards applied to the applicants. That award was not in evidence and accordingly no consideration can be given to its terms, or whether the perceived difficulty had any proper basis.
109 The applicants' case was pressed on the basis that once the applicants were appointed managers of the Village, the General Services Award did not apply to their work, but that fairness required that they should be paid more than the rates provided by that award for caretakers. This approach only compounded the difficulties inherent in the case advanced.
110 Awards are attracted to contracts of employment. By operation of the Act, the minimum rates provided by an award must be paid for the work to which the award is attracted. In the absence of such award regulation, parties are free to agree on other terms. As was observed by Dey J in Wilson Parking at 363, it may not necessarily be unfair, that a person is willing to sell his labour cheaply.
111 I have difficulty in accepting that parties who are award free, should, as a matter of fairness, be bound to comply with award provisions in relation to matters such as rates of pay, overtime, penalty rates and other conditions provided by an award, selected by the employee on a 'best fit' basis, after the employment has come to an end and when it is asserted that the award did not, in any event, apply to the employment. A different result might conceivably emerge had an applicable award been identified. It was not.
112 At the least one might have expected evidence to be led as to how the award relied upon came to be selected. There were, undoubtedly, other awards considered in the exercise of identifying the 'best fit' classification, but no evidence as to what they were, or what considerations played a role in the selection made. It follows that the evidence led did not provide a foundation for the case advanced.
113 As to the complaints advanced in relation to Ms Gore's conduct, I note the evidence that while she was involved in the business of the Village, Mr Singer was the working director in day-to-day charge of its operations. He had a house and lived there, he employed the applicants and represented himself as the owner of the Village, with his silent partner Ms Gore. Mr Singer arranged the business of the Village, including the duties of the applicants and the hours during which they performed them. He even directed the applicants to forge his signature on the Excellence cheque account, a direction he explained as an expedient one in circumstances where he had not had a chance to have the Lipmans made a signatory on the account maintained in Cooma.
114 The unfairness alleged in relation to the applicants' remuneration was an unfairness said to have existed from the outset of the employment. If unfairness existed, as alleged, it was an unfairness which plainly resulted from Mr Singer's actions. Ms Gore undoubtedly acquiesced. They were both directors and each had a beneficial interest in the two companies involved in the Village. It follows that any benefit which those corporations unfairly reaped from the applicants' work, was a benefit in which the two directors each participated.
115 The applicants explained that proceedings had not been pursued against Mr Singer, because Ms Gore had been responsible for the termination of their employment and the failure to implement the promises made in relation to the house. The evidence as to this promise was that it had resulted from a view which Mr Singer and Ms Gore shared, that the applicants had worked hard in their position, they wanted to reward them for that work and they wanted to retain their services for the Village in the long term. While Ms Gore resisted this view, I accept that the applicants' belief that they had been promised the house, had a proper foundation. It was put in submissions for the applicants however, that they accepted that the promise had no contractual foundation.
116 Both Ms Gore and Mr Singer understood that there were problems in making good the promise, given the nature of the rural land on which the Village was built. On Mr Singer's evidence, enquiries were in train as to whether a lease of some part of the land could be granted to the applicants. These enquiries had come to nothing, when the Lipman's employment was terminated. The two companies were later liquidated.
117 On the evidence, the termination of the applicants' employment undoubtedly flowed from the breakdown in the relationship between Mr Singer and Ms Gore. She became concerned at the level of debts incurred by Mr Singer's operation of the Village. He disagreed. The evidence does not permit conclusions to be reached as to who was correct. Perhaps the answer lies in the liquidation of the companies and the undoubted losses which resulted. On legal advice, Ms Gore went to the Village with her accountant to interview staff and inspect the records, as she was undoubtedly entitled to do, as a director of Timecks and Excellence. Mrs Lipman was in Sydney. There was a dispute in the evidence as to whether or not she asked other employees to lie to Ms Gore as to her whereabouts. The question must be decided as a matter of credit. Having seen the witnesses and heard their evidence, I have concluded that the evidence of Mrs Lipman cannot be preferred.
118 There was no doubt that during their interview, Ms Gore had asked Mr Lipman to go over various accounts with Mr Watts on the day after she had discussed the operation of the park with him and that he agreed to do so. Mr Lipman spoke to Mr Singer about this. Mr Singer directed him to remove the records from the Village and to bring them to him in Sydney. Mr Lipman acquiesced. He had obvious alternatives. That he did not chose them, also tended to confirm that there never existed any contract or arrangement pursuant to which the applicants performed work for Ms Gore.
119 On the evidence, it was Mr Lipman's conduct in relation to the removal of the records; the absence of Mr and Mrs Lipman, the Village managers, from the Village over the weekend, at a time when the Village's first bus tour was expected to arrive for the weekend and other concerns which came to light from Ms Gore interviewing other employees, such as the applicants forging Mr Singer's signature on Excellence's cheques, which led Ms Gore to terminate the applicants' employment, when they returned to the park the following week. By then the lies told to Ms Gore about Mrs Lipman's whereabouts had been revealed to her and she had taken legal advice about the applicants' continued employment.
120 The ultimate upshot of Ms Gore's investigations into the operation of the Village was that the two companies were put into voluntary liquidation. In these proceedings the failure to honour the promised land, owned by Timecks, was argued to have further demonstrated the unfairness of the applicants' contracts. It was explained that the Lipmans accepted that the promise was one which Mr Singer had been prevented from honouring and so had not pursued him in these proceedings, in relation to the unfairness about which complaint was made.
121 I observe in passing that the explanation was an odd one. After all, the claim was that fairness required that the applicants be paid in the order of $75,000 each per annum, given the work performed. The value of the land promised was, however, assessed at only some $78,000 over 20 years. How this could have addressed any unfairness in Mr Singer's conduct towards the applicants in relation to the remuneration alleged to have been unfair from the outset of the employment, is difficult to see.
122 It follows, obviously enough, that had the view been available that the applicants' contracts were unfair, and that Ms Gore had some culpable association with such unfairness, justice would have required that the absence of Mr Singer as a respondent in the proceedings, be considered. Ms Gore's liability for any money orders made in favour of the applicants, could not have ignored Mr Singer's position. How could Ms Gore have been made liable for unfairness in respect of which Mr Singer had been demonstrated to have had a culpable association, because the applicants had elected not to pursue him for the reasons which they gave? (See for example Visalli v Southwell & Ors (1988) 12 NSWLR 502). It is unnecessary, however, to further consider such questions, given the views which I have otherwise reached.
123 As to the termination of the employment, various complaints were advanced. Firstly, that Ms Gore had acted unfairly in dismissing the applicants for misconduct; that there had, in fact, been no proper basis for her to have done so and that she had failed to afford them procedural fairness in investigating the matters on which the decision to dismiss rested. In addition, it was argued that the 2 weeks' notice, which the applicants should have been given under the contract was unfair. Six months' notice was claimed.
124 I have recently dealt with the construction of s109A in Bell & Berg v Macquarie Bank [2002] NSWIRComm 235 at para [276] to [280]. I adhere to the views which I there reached in relation to complaints in s106 proceedings about inadequacies of procedures adopted in dismissing an employee. Nor can the unfairness of the decision to dismiss the applicants be dealt with under the section. (See s109A and the decision in Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648; (1999) 93 IR 1) That the applicants, in fact, pursued s84 proceedings in relation to these matters is also a factor which would have had to have been taken into account.
125 I take a different view in relation to the notice claim. The summons alleged unfairness in the contract in relation to the period of notice. The letter of employment reserved no right to the employer to dismiss summarily for misconduct. It was not obvious where else that right could have flown from, other than at common law. (As to that right, see the discussion in Labour Law Text and Materials, Second Edition, Creighton Ford and Mitchell at pp237 to 234.)
126 Obviously enough, if the circumstances here in question were not such as to have given Excellence the right to summarily dismiss the applicants from their employment, following upon a repudiatory breach of their contracts of employment, Excellence was obliged to have given them two weeks notice of termination pursuant to their contracts. Failure to do so was a breach of contract on Excellence's part, a factor to which regard may properly be had in proceedings brought under s106 of the Act. (See Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69. A claim that such a period of notice was unfair in the circumstances of a particular employment, is also plainly enough within the Court's jurisdiction under the section.
127 Whether or not the applicants' conduct amounted to a repudiatory breach of their employment contracts is a question of fact to be determined on the evidence. This was not how the case was advanced, but an argument might have been open, that the applicants' conduct did not give Excellence the right to treat their contracts as if they were at an end. (See for example the approach in Laws v London Chronicle [1959] 1 WLR 698 and Lane v Commonwealth Bank of Australia [2000] NSWIRComm 274.)
128 Complaints were also advanced as to Ms Gore's conduct, including in entering the Lipmans' home at the park, which was unlocked, to search for records which were found there. The evidence disclosed a considerable issue as to Ms Gore's conduct. If the Lipmans' evidence on these matters was to be preferred, undoubtedly the view available would be that Ms Gore had acted unfairly, at least in the manner in which they were treated, upon termination. The fairness of the decision to dismiss is not, however, in issue in proceedings such as this.
129 The circumstances, as I would find them on the evidence, preferring the evidence of other witnesses, as I do, on matters of conflict, were that Mr Lipman had left his work unannounced, removing Village financial records in the night, contrary to his earlier agreement to discuss them the next morning with the accountant brought to the Village to review them; Mrs Lipman was also absent and had lied as to her whereabouts; both Mr and Mrs Lipman, the Village managers had absented themselves without explanation from the park at a time when it was important for them to be present attending to their duties, given the weekend bus tour arranged; they had directed other staff to take steps to ensure that the bus tour was a failure; they failed to respond to phone enquiries as to their whereabouts and when they would return; it was discovered that the applicants had forged Mr Singer's signature on Excellence cheques and necessary records on cheque butts were not maintained. The question which would arise in the proceedings as to those circumstance is whether there had been a repudiation of the contract. That was certainly arguable. If it were accepted, the question of inadequate notice on termination could not arise. The applicants would not be entitled to notice.
130 Even if that view were not reached, the difficulty with the case advanced remains. Namely, the complaints advanced were made in the context of a claim that there had existed a contract or arrangement under which the applicants performed work for the respondents. There were no such contracts or arrangements. Ms Gore's association with their employment was plainly as a director of Excellence. There was no case advanced in relation to the unfairness of the applicants' contracts of employment with Excellence, or Ms Gore's culpable association with such unfairness. Why this was so was unclear on the case advanced. It is unhelpful to speculate.
131 It follows that the case advanced must fail.
Orders
132 For all of these reasons, I order that the applicants' claims be dismissed. The usual order would be that the applicants bear the respondents' costs as agreed or assessed. In the absence of agreement on costs the parties have liberty to approach, which should be exercised within 21 days of the date of this judgment.
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