Industrial Relations Commission of New South Wales in Court Session CITATION : Kassafern Pty Ltd & Anor v Battery Assist Pty Limited (now known as ClubAssist Pty Limited) [2003] NSWIRComm 327 First Applicant: Kassafern Pty Ltd PARTIES : Second Applicant: John Barry Geraghty Respondent: Battery Assist Pty Limited (now known as ClubAssist Pty Limited) FILE NUMBER: IRC2076 of 2001 CORAM: Kavanagh J CATCHWORDS : Section 106 application - Alleged unfairness of contract term requires 24 hour service, 365 days a year by service delivery provider - labour returns meagre reward - Evidence as to hours worked by second applicant requires identification of "on-road" service or "on-call" time - question of public interest - whether the applicant an employee - issue as to whether contract returns, as remuneration, less than that which would be earned by an employee - application dismissed. LEGISLATION CITED : Industrial Relations Act 1996 Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 Stevenson v Barham (1976-77) 136 CLR 190 McNaught v Micador Australia Pty Ltd (1998) 83 IR 111 Brown v Rezitis (1970-71) 127 CLR 157 CASES CITED : Lipman & Anor v A G Lifestyle Management Pty Limited & Anor [2003] NSWIRComm 160 Metrocall Inc v Electronic Tracking Systems Pty Ltd (2000) 101 IR 66 Mitchforce v Industrial Relations Commission & Ors [2003] NSWCA 151 McNaught v Micador Australia Pty Ltd (1998) 83 IR 111 Stevens v Brodribb Sawmilling Company Proprietary Limited, Gray v Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16 Stevenson v Barham (1976-77) 136 CLR 190 HEARING DATES: 05/13/2003; 05/14/2003; 05/15/2003; 05/16/2003; 05/20/2003; 05/30/2003; 06/24/2003; 07/07/2003 DATE OF JUDGMENT: 11/06/2003 Applicant: Dr J.P. Berwick of counsel Solicitors: Mr. B. Gotterson Pigott Stinson Ratner Thom LEGAL REPRESENTATIVES: Respondent: Mr A.R. Moses of counsel Solicitors: Mr R. Newton Dibbs Barker Gosling JUDGMENT: - 26 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : Thurs 6 November 2003 IRC2076 of 2001 KASSAFERN PTY LIMITED AND JOHN BARRY GERAGHTY v CLUB ASSIST PTY LIMITED (FORMERLY KNOWN AS BATTERY ASSIST PTY LIMITED) Application under s106 of the Industrial Relations Act 1996 JUDGMENT [2003] NSWIRComm327 1 This application is brought under the provisions of s106 of the Industrial Relations Act 1996 (the Act). Kassafern Pty Limited (the first applicant) and John Geraghty (the second applicant) allege a contract entitled a Service Delivery Agreement entered into by the first applicant, through its principal the second applicant, with Battery Assist Pty Limited (now known as ClubAssist Pty Limited) (the respondent) in its terms and/or in its performance was unfair, harsh or unconscionable. 2 The respondent had contracted with the NRMA to provide, on its behalf, an "on road" battery delivery and replacement service. At first, the respondent entered into Owner/Driver contracts for the delivery of the service. The contract was then changed to a Service Delivery Agreement. The first applicant, the Service Delivery Contractor ("SDC"), engaged its Director, Mr John Geraghty, the second applicant, referred to in the agreement as the Service Delivery Provider ("SDP"), to perform the delivery work. He had to equip and then drive a van to provide a service for the repair or delivery and installation of car batteries "on road". The particular agreement, required the delivery of the "on road" battery service in the area of Sydney broadly centred around Chatswood, in the northern suburbs. 3 The structure of the arrangement between the first applicant and the respondent was such that a director of the company concerned (the second applicant), in order to generate an income, had to take upon himself, or through hired drivers, the requirement of delivering the battery delivery service, 24 hours per day, 365 days per year (Clause 7(d) of the contract). 4 Dr J.P. Berwick of counsel appeared for the applicants and Mr A.R. Moses of counsel appeared for the respondent. Pleadings 5 On 15 May 2003, the third day of the hearing, Dr Berwick for the applicants, sought to file in court a Further Amended Summons under Part 20 of the IRC rules. He conceded the court had a discretion, subject to the amendments not being prejudicial and for the court's determination that it was in the interest of justice to all parties to so allow the admission of the Further Amended Summons. 6 The Further Amended Summons outlines a number of alternative propositions to the court in the way it could determine just compensation. The Further Amended Summons referred to a number of Awards and alternative propositions as to the calculation of just compensation. 7 The respondent argued if the court at that stage of the proceedings allowed the application, it would require an adjournment and seek particulars to each alternative claim and the basis upon which each was made. Such particulars would require definition as to hours the second applicant worked per day, call outs per day, etc. All issues identified by Mr Moses were evidentiary problems he could envisage. 8 The Further Amended Summons outlines possible monetary orders but does not seek further variations to the contract or outline further claims as to alleged unfairness. The amendments direct themselves to the discretionary aspects of the claim. The primary documents, namely various Awards and Agreements, could provide the court with the same information if the court reached a determination that this was a matter where an unfairness found required just compensation through a monetary order. 9 Any remedy granted by the court including avoidance or variation of a contract must necessarily be proportionally connected to a loss suffered by the applicant arising from any unfairness found (see Virtue v NSW Department of Education and Training (1999) 92 IR 428). 10 A court will only declare void a contract in circumstances where it is of the view that it is necessary to do justice between the parties and the court only varies the contract as to the unfairness found in the conduct or performance of the contract (see Eagle Boys Dial-A-Pizza Australia Pty Ltd v Clifford [2003] NSWIRComm 101). 11 Schmidt J in Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 as to relief sought through a summons said at [115, 117, 118 and 120]: 115 It is convenient to deal with this issue at the outset. It has now been held by this Court in a number of different contexts, that cases advanced under s106, must be determined on the claims advanced by the applicant in the summons. Summonses are often amended after filing, particularly after conciliation under s109 of the Act has failed. That was the case here. Very late applications for leave to amend a summons are on occasions received by the Court. Whether leave is granted in such a case, depends upon whether any injustice might be visited upon a respondent as a result. No application for such leave was here made. . . . 117 In Bourke Air Charter v Easton (2001) 109 IR 443, the Full Court has recently considered a case where at first instance, relief was granted in relation to a claim for payment of overtime, an order not sought in the summons, nor there otherwise pleaded or particularised. In that case the claim had first been raised by the trial judge in questioning of witnesses at the hearing, over the objections of the respondent's counsel. The claim was then pursued by the applicant's counsel in closing submissions. 118 The Full Court upheld the appeal, concluding at p455 that a claim must be particularised in the summons and that it is not sufficient if reference to a claim is made in affidavits filed by the applicants or in transcript. If such a claim is to be pursued, the summons must be amended to make it clear what order is sought, as well as the basis upon which it is advanced. This approach is entirely in accordance with the requirements of s106 itself, as well as with the Court's Rules and the form there provided, which requires that the orders sought and the grounds of the application, be specified. The approach of the Full Court in Bourke Air was similar to that earlier taken by another Full Court in Vision Publishing Pty Limited v PK Lane Holdings Pty Limited and Others (1998) 84 IR 277. . . . 120 The formulation of a claim in the summons is a different matter to how any money orders might ultimately be framed by the trial judge, who is at that point not confined to the precise terms of the orders sought in the summons. Depending upon the approach which the parties adopt to the litigation, formulation of such final relief can be a difficult process. It was held, for example, by the Full Court in Barclays Australia Investment Services Limited & Ors v Nordby (1995) 99 IR 258 at p279 that: 'The task of assessing a "just" monetary amount is one which, not infrequently, involves the exercise of a broad judgment without the assistance of defined and identifiable parameters or heads of loss or damage.' 12 While the Further Amended Summons places before the court a number of awards and alternatives upon which calculations are based, it contains no further claims as to alleged unfairness – beyond that related to holiday pay which had already been canvassed before me – and directs itself to the use of the court's discretion in making monetary orders. 13 I therefore reject the Further Amended Summons but allow the tender of the primary documents, namely, the Awards. 14 The applicants claim the Agreement was unfair in its operation in that it required Mr Geraghty, the second applicant, to deliver a service 24 hours a day, 365 days a year. Under the contract, he, it is alleged, "had to work long hours for meagre reward". The applicants plead as follows: 40. In so far as the contract in its terms required the Second Applicant to be available for work 24 hours a day seven days a week it is unfair, harsh and unconscionable and/or against the public interest. 41. In so far as the contract in its operation resulted in the Applicant being required to be available for work 5 days at 18hrs a day and 2 days at 24hrs for a taxable income of approximately $35,000 per annum it is unfair, harsh and unconscionable and against the public interest. 42. Further, the Applicant relied upon the statements of Mr Wallis to the effect that there was a "real possibility" of "spiralling growth". This growth did not eventuate and the Applicants eventual earnings were such as to make the operation of the contract unfair, harsh and unconscionable and against the public interest. 43. The Applicant was an employee within the meaning of the decision of Hollis v Vabu Pty Ltd [2001] HCA 44 (9 August 2001). Consequently, he was entitled to 4 weeks holiday pursuant to s34 of the Annual Holidays Act 1994 (N.S.W.) 44. If, it not be the case that at law the Second Applicant was an employee then a contract or arrangement requiring a contractor to work the hours which are the subject of these proceedings and which does not provide for annual holidays is against the public interest. 45. Further, as an employee it is unfair, harsh and unconscionable and against the public interest that the Second Applicant should have to work the hours the subject of these proceedings to achieve a taxable income of $34,502 per annum which is significantly discordant with prevailing award rates and conditions within the State of New South Wales. 46. If it be the case that the Second Applicant is not at law an employee then it is unfair, harsh and unconscionable and/or against the public interest that a contractor should have to work the hours the subject of these proceedings to achieve at taxable income of $34,502 per annum which is significantly discordant with prevailing award rates and conditions in the State of New South Wales. 15 Relevantly, the applicants allege the contract is unfair, and/or is against the public interest, in that the second applicant's labour returned him less than a person performing the same work would receive as an employee and/or the said agreement avoids the provisions of the relevant awards. The definition of unfair contract is relied upon: 105 Definitions In this Part: "contract" means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. "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. Orders Claimed 16 The applicants claim, by way of the Amended Summons, the following orders as just compensation arising from a contract which, it alleges, should be impugned for unfairness and varied accordingly: 1 An order declaring the contract or arrangement entered into between the first applicant and the respondent on 9 April 1997 was unfair, harsh or unconscionable and/or against the public interest. 2 An order varying that contract from its commencement or from some other date in order to provide the following terms: (a) operation of the contract or arrangement shall not be harsh, unjust or unreasonable and/or against the public interest (b) that the contract or arrangement may only be terminated upon the payment of $114,044.76 (c) that the Second Applicant as the principal of the First Applicant be able to negotiate on the open market to sell the battery run. (d) that the Second Applicant could take reasonable living expenses from cash moneys received pending a monthly reconciliation with the Respondent 3 An order that the respondent pay to the First Applicant the sum of $114,044.76. 4 In the alternative to order 2(b) an order varying the contract so that on its termination the Respondent pay to the Applicants such other amounts as the Commission in Court Session considers just in the circumstances of the case. 5 An order that the Respondent pay to the Applicants interest. 6 An order that the Respondent pay the Applicants' costs of and incidental to these proceedings. 7 Such further or other Orders as the Commission in Court Session may see as just to provide relief to the Applicant. Relevantly, particulars were provided of the manner in which the above amount claimed was calculated: Using the classification of employees in charge of vehicles selling confectionery under the Shop Employees (State) Award at casual rates for 138 hours per week (138 x $13.60 per hour) would see an entitlement of $1,876.80 per week. Over 23 months (92) weeks this would total $172,665.60. The amount earned at $4.79 per hour at 138 hours per week over 92 weeks = $60,813.84. The First and Second Applicants' claim is therefore for $111,851.76, plus a further $2,193.00 (being $34,502 per annum /365 days x 20 days holiday + 16% loading). Total claim = $114,044.76 17 The respondent identified the issues raised in the Amended Summons and from submissions at the close of the case to be as follows: (i) The circumstances surrounding the Service Delivery Agreement being entered into by Kassafern; (ii) Whether John Geraghty (the principal of Kassafern) was an employee of Club Assist or Kassafern? (c) Whether a change in the Service Delivery Agreement or the operation with Club Assist is evidence of unfairness of the Service Delivery Agreement between Kassafern and Club Assist; (d) Did the Service Delivery Agreement essentially require John Geraghty to be available for work 7 days a week, 24 hours a day? (e) Whether Kassafern is entitled to any additional monies and if so, whether the amount ought be referable to an Award. 18 The second applicant gave evidence as did his father, Barry Geraghty and a fellow service provider, Arjang Fouladi. The respondent relied upon evidence from Mark Remington Wallis, NSW Operations Manager, Battery Assist Pty Ltd and records of Mr Garth Harcourt-Smith, a back-up driver of the respondent. A statement of Alan Raymond Stubbs, deceased, formerly NSW State Manager of the respondent was also tendered. Other evidence including financial and business records of the respondent were also placed before the Commission sitting in Court Session. The Contract 19 The Service Agreement was entered into on 9 April 1997 between Battery Assist Pty Ltd (referred to as "BA" in the contract) and Kassafern Pty Ltd (referred to as "SDC" in the contract). Attached to the agreement were four schedules (A-D) as well as a Guarantee and Indemnity. In the preamble to the contract it states: A. BA is contracted to provide an on road battery delivery and replacement service on behalf of the NRMA Limited (ACN 000 010 506) of 151 Clarence Street, Sydney in the Metropolitan areas of Sydney, Newcastle, Wollongong and Canberra. B. BA desires to appoint the SDC as its Agent to provide on road battery delivery (and replacement if required) service exclusively on its behalf in Metropolitan Sydney. C. In consideration of the SDC entering into this Agreement BA has agreed to appoint the SDC and the SDC has agreed to act as an Agent for BA on the provision of on road battery delivery replacement service on behalf of NRMA. D. It is acknowledged by the parties hereto that they shall at all times adhere to the spirit and philosophy of the NRMA and BA in providing the highest possible quality service and shall co-operate with one another at all times for this purpose. 20 Relevant terms of the agreement are as follows: 1. SCOPE AND TERMS OF APPOINTMENT 1.1 BA appoints the SDC from the date of commencement shown in Schedule A for the term shown in the said Schedule to act as its Agents and provide to NRMA a road battery delivery and replacement service upon the terms and conditions hereafter contained. 1.2 BA reserves the right to appoint other Agents or introduce its own employees to also provide on road battery delivery and replacement service to NRMA and the SDC acknowledges that such other appointments or introductions may be made without any consultation with the SDC. 1.3 The SDC shall at all times in the conduct of the said agency:- (a) Perform the services required of the SDC under the terms of this Agreement to discharge its responsibilities as an Agent herein to the best of its skill and ability and in particular adhere to the standards required of Australian Standard regarding Quality Service Matters AS3902 and the Procedures Manual and shall actively promote the business interests and reputation of BA and NRMA insofar as they relate to the agency hereby created. (b) Use the appropriate printed forms from time to time provided by BA which forms shall not be altered by the SDC. (c) Strictly observe and obey all relevant acts, regulations or other requirements of law from time to time affecting the activities of the SDC or any servants or agents of the SDC and without limiting in any way the generality of the foregoing shall comply at its own costs and expenses with all acts of the Commonwealth and the State of New South Wales and all regulations, by-laws, ordinances and orders made thereunder and the lawful requirements of any public, municipal or other authority so far as they may affect or apply to this Agreement or the Services required to be provided under this Agreement and shall comply with all relevant Industrial Awards and agreements and shall obtain throughout the term and hold throughout the term all necessary consents, authorisations, approvals and licenses or permits to deliver the Services and to produce same to BA upon request by BA and to forthwith notify BA of loss or suspension of any such consent, authorisation, approval, license or permit. (d) In the event of any dispute arising with an NRMA member in relation to the provision of an on road battery delivery and replacement service, inform BA forthwith of the dispute provide a written report to be made available for collection by BA within 12 hours of the dispute arising and not without BA's consent in writing purport to take any action or proceeding in respect of or compromise the dispute or grant a release to any NRMA member. In the event of BA being unable to immediately resolve the dispute it shall be referred to NRMA which shall act as an Arbitrator and its decision shall then be final and binding on the SDC who undertakes to promptly and strictly abide by the said decision. . . . . (j) Pay and be liable for all expenses associated with its provision of the battery delivery and replacement service. (k) The SDC acknowledges that all communication between the SDC and NRMA shall be solely for the purposes of rendering services as provided herein. Under absolutely no circumstances whatsoever shall the SDC communicate directly with NRMA on matters other than matters relevant to the rendering of the services to the customers and members of the NRMA. The SDC acknowledges that at all times the SDC must respect the confidentiality provided for in Clause 15 hereof and undertake no discussions with NRMA in relation to any matters touching the relationship between the SDC and BA. (l) The SDC hereby indemnifies and holds harmless BA in respect of any loss or damage suffered or expense incurred by BA arising out of any act of the SDC which is beyond the authority of the SDC as set out herein. (m) The legal relationship between BA and the SDC is that of principal and agent and not that of employer and employee or partnership. The SDC shall be liable for its own income tax payments and (if applicable) payroll tax payments in relation to employees, servants or agents employed by the SDC pursuant to this Agreement. The SDC hereby indemnifies BA from and against any liability that may rise in relation to the payment of any such taxes. (n) In the event that the SDC must carry out some of its duties through servants, employees or agents, the SDC shall immediately notify BA of such fact and the SDC shall not carry out its duties through servants, employees or agents without the consent of BA. 2. TRAINING AND EMPLOYMENT 2.1 The SDC and each of its employees actively engaged in the provision of the services shall participate in:- 2.1.1 The initial training period provided to the SDC and/or each of its employees (as the case may be) by BA (in conjunction with NRMA) in accordance with BA's training policy after the execution of this Agreement and prior to the commencement of road duties. 2.1.2 Such further training from time to time as BA may consider necessary for the proper rendering of the services by the SDC. 2.2 The training referred to above shall be at such location and for such duration as BA may prescribe. 2.3 Should there be a direct external cost to BA for the provision of specified training then the cost shall be shared by the attendees or their respective SDC at the relevant training session. 2.4 Save as provided for in Clause 2.3 hereof, BA will make no charges for the provision of training nor shall the SDC claim any remuneration for attending training sessions. 2.5 The SDC shall, at its costs, engage a backup driver to carry out the obligations of the SDC during all training sessions. 21 The court must make a number of findings of fact as to what this contract for service delivery required and how the contract was performed by each party. In making such findings, the respondent submits this is a case where the court must assess the credit of the principal, Mr Geraghty, the second applicant, whose evidence the respondent submits, was not reliable, or otherwise exaggerated or untruthful. 22 There is dispute as to what professional advice the second applicant received before entering into the contract. It was the second applicant's evidence: 8. I took this agreement and showed it to my father who is a solicitor of 30 years experience. He read it and said words to the effect of: This agreement is very much tilted in favour of Battery Assist. However what you are at risk of is the depreciation on the van as they don't seem to be asking you for any pay out in regard to goodwill or any such thing. There are a lot of hours work involved but if the company is telling you that they are going to grow then you might be able to make a decent living. 23 Mr Geraghty then asserted as to the circumstances in which he showed his father the Agreement prior to entering into it: . . . actually what happened was, because my brother Mark had previously entered into an agreement, my father had already obviously seen the agreement. 24 The second applicant gave varying evidence as to the status of advice he received from his father on the contract. However, his father, a solicitor, also gave evidence and I find his evidence persuasive. Mr Barry Geraghty, the father of the second applicant, was asked: Q. You then had discussions with John? A. No. I had discussions with him when I was going over to Neutral Bay to acquire the shelf company. He discussed it with me in the car. Q. This was the first time you had spoken to John about this issue? A. Yes. Q. Can you recall those discussions? A. He just told me he wanted to do it and the thanked me for any financial support that he and my wife were going to give him. I said "Best of luck," wished him well. . . . Q. You said a little while ago you are a conveyancing solicitor? A. Yes. Q. When you were having discussions with (sic) Mark did it occur to you you might advise him he should see somebody else? A. No, it did not because I have never had a relationship with my children on a solicitor/client basis. It has always been father/son father/daughter basis. Q. So this is the first time? A. Yes, bearing in mind one thing, both boys had the opportunity to see their sister. Q. Who is their sister? A. Jackie Geraghty, who is also a solicitor. She is my eldest daughter. Q. You are telling the court they had that opportunity? A. Yes. . . . Q. Just look at the first page. When John provided you with that service delivery agreement, you read it? A. No, I did not read it in full from recollection. Q. You had already read Mark's agreement? A. Yes. Q. You understood it to be the same? A. I just asked him "Is this the same as Marks' agreement? Make sure it is," or words to that effect. . . . Q. When he gave it to me I remember casually flicking through, like you have a heading here, I was looking at the headings. I didn't sit down and go through the agreement in depth. I remember I was on the way out for an appointment and I went through the headings and I said "It seems to be the same as Mark's agreement but make sure that they are." I said "They contain the same as the agreement with Mark." Q. Is that all you said? A. I think I said "It is not my expertise." I repeated what I said to Mark "It is not my expertise. You have to rely on what the Battery Assist representative said to you as to the income. You know you have to provide a vehicle." I think I said "You are not buying goodwill; there is no goodwill purchased. You have to work hard and rely on what they represented to you as the income growth," etc. That was basically it. Q. You said to him "This agreement is very much tilted in favour of Battery Assist"? A. Yes. It was, yes. Q. You said that? A. Yes. Q. And you said "You are at risk; there is the depreciation of the van; they do not seem to be asking you for goodwill." Is that what you said? A. Yes. Q. You said "There are a lot of hours of work involved?" A. Yes. Q. When you said that you were referring to the second page of the summary document, clause 7.1? A. To be available seven days a week 365 days a year, yes. Q. When you said that about the hours you were referring to that clause? A. Yes, basically to that clause. 25 Mr Geraghty, Senior, assisted the second applicant in buying a shelf company called Kassafern Pty Limited. 26 Prior to Kassafern entering into the Agreement with Battery Assist, the second applicant was a director of BJM Geraghty Pty Limited. That was a company which his brother, Mark Geraghty, used to enter into a Service Delivery Agreement with Battery Assist. The second applicant signed his brother's Service Delivery Agreement as a director of BJM Geraghty Pty Limited and as a guarantor for his brother. He agreed he had read and understood the provisions of his brother's Service Delivery Agreement prior to signing his agreement. He agreed he understood his responsibilities as a director of the company and his responsibilities as its guarantor. Before entering into his own Agreement, the second applicant had been told by his brother what work was involved under the contract. He had also worked part time as a driver for his brother in the performance of that contract. 27 The respondent, in asserting the second applicant entered the agreement freely, relies also on clause 19 of the Service Agreement which the respondent alleges binds both applicants. Relevantly the clause states: 19(1) This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter of this Agreement and merges all prior discussions between them and neither of the parties shall be bound by any conditions, definitions, warranties or representations with respect to the subject matter of this Agreement other than as expressly provided in this Agreement as duly set for or subsequent to the date hereof in writing and signed by a proper and duly authorised representative of the party to be bound thereby. 19(2) Under no circumstances whatsoever does BA take responsibility for, or make any representation with respect to accuracy or adequacy of any information or data provided to the SDC whether contained in this Agreement or otherwise nor shall BA be liable whether in contract, tort, or statute for any negligent, misrepresentation, or misinformation or otherwise nor does BA assume any duty of care to the SDC with respect to the information pertaining to the Services provided for herein or the failure to provide such information. 19(3) The SDC acknowledges that it has made its own independent inquiries and examined all information which is relevant to the risks, contingencies and other circumstances which could affect its decision to enter into this Agreement. 28 I accept the second applicant's discussions with his father as to the content of the documents were on a father/son basis rather than solicitor/client basis. However, the second applicant had the opportunity to seek legal advice from his father or from his sister, also a solicitor. That opportunity, even if he did not take it, was available to him. The second applicant was aware of the effect of the contract given his experience with his brother in analysing its terms and conditions. I find in the circumstances the second applicant knew of, and understood, the provisions of the contract. I find he was aware of the terms of the contract and the legal implications of those terms as contained in the similar contract held through his brother. The Equipment 29 The first requirement under the contract was the company, Kassafern (SDC) and through it, Mr Geraghty (SDP), had to purchase (or lease) a van and equip it so as to provide the service of repairing and/or installing batteries in motor vehicles broken down when on road. Clause 4.1 of the Agreement provided: For the purposes of complying with this Agreement the SDC agrees to provide and operate at its own expense a new motor vehicle of a make and model detailed in Schedule A ("the delivery vehicle"). BA reserves the right to annually review the make and model of the delivery vehicle to be supplied by the SDC. Clause 5.1 of the Agreement provided: At its own expense the SDC agrees to equip the delivery vehicle with the tools and other equipment detailed in Schedule C to this Agreement with such tools and other equipment to be as specified by or acceptable to BA. 30 The evidence revealed the estimates from the respondent given to the applicant as to the costs of obtaining a vehicle and equipping it required an outlay of $30,000 approximately. Mr Geraghty confirmed that was the approximate cost to him to lease the required van and to set it up with the necessary tools and equipment. Although the respondent under Clause 19 asserts no representations given prior to the signing of the agreement are legally binding on it, I am satisfied in its "General Information and Proposal for Potential Service Delivery Provider Companies" document it gave a fair estimate of $29,470.50 as start up costs. While the agreement allocated a defined area for the service delivery no goodwill was paid upon entering the agreement. The System of Work 31 A driver's work was monitored and controlled by the NRMA digital network. A driver's procedures as defined by Counsel for the applicants required: When entering the van he (the driver) had to transmit that he was en route. He then had to verify when he was on the job. He then, when the job had been completed, had to so report. There was essentially no contest between the parties as to the proposition that the operations of Battery Assist, and therefore the work of a Service Delivery Provider such as the second applicant, were tied to the operation of the NRMA patrol network. Indeed, all work was despatched to the service deliverer by means of the NRMA radio network through its call centre. I accept the details of the second applicant's work were closely monitored and organised by this digital network. Mr Wallis, NSW Operations Manager of Battery Assist agreed the purpose of the contract was to provide a "seamless service" to the NRMA under the terms of the Contract Preamble and Clause 1.1. [at recital "C"]. 32 The second applicant was also required to wear a uniform totally in harmony with that worn by NRMA Patrol Officers, that is, the "on road" NRMA employees. In accordance with Clause 6.1 of the Service Agreement: The SDC agrees to provide at its own expense its employees and agents with a uniform approved by and in accordance with the details of uniform provided by BA. . . . The applicants' van carried a number of logo features which could lead a driver needing road-side assistance to believe the service provider who attended following his call to the NRMA was a service officer of the NRMA. 33 Ultimately, I am persuaded the purpose of wearing an NRMA hat and/or NRMA jumper with the attendant logo and having the NRMA insignia prominently displayed on the van was to give the impression to the customer/NRMA member that they were dealing with the NRMA. The primary "General Information" document explaining the agreement displays the logo of the NRMA (in the form of NRMA batteries). I accept the proposition that, as the agreement reveals, the applicants were engaged to fulfil the contractual obligations between Battery Assist and the NRMA. 34 A member of NRMA may well be surprised to discover his/her call for the NRMA service to which he/she contributes, is answered by a sub-contractor to a contractor to the NRMA rather than an NRMA patrol officer. 35 The Agreement also specifically outlined a system of work to be followed by the service provider with the obligation for its adherence placed on the Service Delivery Company. The system of work to be followed is outlined in Clause 7 of the agreement: 7.1 The SDC covenants with BA to provide an on road battery delivery and replacement service to persons nominated by the NRMA and in particular to:- (a) Attend all calls, as soon as practicable, after receiving the necessary information from the NRMA Control Room and shall use its best endeavours to ensure that the average time taken to arrive at given location of the motor vehicle of the member (or member of the public):- (i) Attend all calls for immediate delivery of a battery received from the NRMA within 45 minutes in normal conditions; (ii) That on no individual cases will the time exceed 60 minutes; and (iii) At or within the time advised by BA or NRMA. from receiving such information. (b) In the event of being unable to attend a call within the stipulated time, the SDC will attempt to make alternate arrangements with the customer. If a mutually suitable time can not be made, the SDC will contact the Duty Manager at BA or that person nominated by BA. (c) To attend all bookings within 15 minutes of the appointed time. (d) To be available 24 hours per day, 365 days per year . (e) To price all batteries supplied and accessory equipment in accordance with pricing specifications received by BA, which pricing specifications BA shall be at liberty to review from time to time having regard to price movements, new products and special circumstances. (emphasis added) 36 I accept the applicants' submission under the circumstances recited above, there was organisational control exerted, under the contract, over the system of work to be performed by the service provider. Unfairness 37 The applicants' complaint as to unfairness is that the second applicant had to work long hours under the contract and for a meagre reward. The essential clause complained of required the delivery of the "on road" service 24 hours a day, 365 days of the year. Clause 7 (1) states: 7.1 The SDC covenants with BA to provide an on road battery delivery and replacement service to persons nominated by the NRMA and in particular to:- (a) . . . (b) . . .. (c) . . . (d) To be available 24 hours per day, 365 days per year. It is necessary, therefore, in order to determine whether there was an unfairness in either the terms of or the performance of the contract to examine the system of work, what labour was performed by the applicants and what payments were received under the contract for that labour. The Support Services 38 Given the hours required under the contract for the service delivery, the contract acknowledges two back-up systems for the service provider to support him in the delivery of the service. The Buddy System 39 The first back-up service was defined in the agreement as a Buddy System. Clause 7.2(a) of the agreement states: 7.2 Subject at all times to the obligations imposed upon the SDC by Clause 7.1(d) the parties hereto acknowledge that during times of most days and certain times of the year there may be little immediate call for the use of the battery service. The SDC agrees to adhere to procedures in place for SDC to be unavailable for the purposes of this Agreement and in particular:- (a) The SDC shall participate in the 'Buddy System' (as described in the Procedures Manual) where BA deems itself practical so to do. The Buddy System will allow SDC companies to pair allowing those companies alternate nights when they may not be available for the rendering of the services provided for herein. The respondent asserts the operation of the Buddy System allowed the second applicant to have two alternative nights off per week. The second applicant used such relief in 1997 for the first three to six months of the contract. He stated he had then a three way buddy system arrangement with Mr Fouladi and his brother, Mark Geraghty. 40 Mr Wallis explained the Buddy System in the following way: At every interview I explain to potential applicants the buddy system whilst using the map . . . My explanation is in words to the following effect: Under the system, there is a pairing off between two or more vans between 7.00pm and 7.00am so that a contractor can have time off at night unless demands require them to go out on the road for back up purposes. If there are more than two SDC's in this 'buddy' system, one of those SDC's can make themselves completely unavailable. In order for a principal driver of an SDC to have daylight hours off, the SDC would need to employ relief drivers. 41 The Procedures Manual given to the applicants explained the Buddy System thus: 8. AFTER HOURS BUDDY SYSTEM 8.1 PURPOSE The purpose of this procedure is to detail how and when the After Hours Buddy System is implemented. 8.2 NORMAL AVAILABILITY Between the hours 6.00am and 7.00pm daily each Service Delivery Contractor must ensure that their Battery Delivery Van is available to receive communication from the NRMA Assistance Centre. 8.3 AFTER HOURS BUDDY SYSTEM For the purpose of this procedure, After hours is to be defined as the period between 7.00pm and 6.00am the following day. It is possible during this period for one SDC to cover his assigned work plus the work of any one (1) adjoining SDC. No Buddy System will be allowed until approved by Battery Assist /l after consideration of all relevant details. After approval of a Buddy System, the Buddy system will operate under the following conditions. 8.5 CONDITIONS The two SDCs who operate the Buddy System will devise a roster that each agree upon. If agreement cannot be reached, each SDC will be responsible for their allocated work on a 24 hour basis. At 7.00pm the rostered off SDC will contact his buddy to check that he is able to go to the Buddy System. The SDC can only implement the Buddy System if the rostered on SDC is willing to take on the extra work, and if the rostered off SDCs work is completed. The rostered off SDC will then contact NRMA Assistance Centre and inform them that the rostered on SDC is covering his work until 6.00am the following day. The rostered off SDC must complete all outstanding jobs that would be allocated to him before rostering off. The rostered off SDC must be contactable on his usual mobile number so as to be available should the work load become to great for the rostered on SDC. Reasonable effort will be made by NRMA Assistance Centre to allocate the work load but the rostered off SDC must consider himself on stand-by and be available should the need arise. In the event of the rostered off SDC being called out there must be no discussion with NRMA Assistance Centre regarding whose responsibility the job is. Battery Assist may at any time suspend the Buddy System for operational reasons. 42 It was the second applicant's view the Buddy System was not effective. The system allowed for two drivers in adjoining areas to roster, between each other, over particularly defined hours, one of them to cover both areas. Battery Assist disavowed any responsibility for the Buddy System except as to allowing it under the contract. 43 A lay witness, Mr Fouladi, who had a similar contract and arrangement with Battery Assist as that of the second applicant, said of the Buddy System: ... the system as far as Battery Assist was concerned didn't exist. They wanted us out there 24 hours a day seven days a week. Q. Are you sure, sir? A. As far as Battery Assist was concerned, the Buddy System was an informal thing set up between us. If 10 jobs came out at any of the areas where there was a Buddy System we were still required, and this was told to us by Mike Wallis, that yes, you would need to get out there and work so the Buddy System was something which was a totally informal set up by us. They said in some areas they worked and in some areas they didn't. 44 It was always the ultimate responsibility of the service delivery provider to respond to calls for services required in his defined area. In evidence, Mr Wallis stated the Buddy System operated between 7pm and 7am. The Procedures Manual defined normal availability between 6am and 7pm. There was some confusion as to precisely when the Buddy System operated and under what terms. As stated in the Procedures Manual, the relief it afforded covered the after hours period of 7pm and 6am. If so, then the applicants claim the support was not that envisaged in the Agreement under Clause 7.2 which clearly stated the system was intended to alleviate the stress on drivers during night operations. It was Mr Wallis' view the proper way to measure the efficacy of the Buddy System in giving drivers time off was to see whether Mr Geraghty's van was off duty between 7pm and 7am. He accepted the "real question" was whether the van went out after 7pm and the number of days in which it did so. 45 I accept Mr Wallis' evidence the Buddy System was available on a daily basis from 7pm to 7am. However, I also accept from the description of both the second applicant and Mr Fouladi, another service delivery provider, that the Buddy System did not ensure any real relief to the second applicant who had to remain "on-call" in circumstances where the relieving driver was answering a call either in his/her own area or the applicants' area. The basic system in place required a road call to be answered by the service provider within 45 minutes of receipt by the NRMA call line. Therefore if the "buddy" was busy the driver who was on relief was obliged to answer the call. 46 The second applicant attempted to structure his arrangements with other drivers from Battery Assist (pursuant to the Buddy System) so he could enjoy two or more nights off per week. This arrangement was in place and partially successful. However, I also accept the Buddy System did not provide true relief to the second applicant who, as the service provider, had to remain "on call" even within his rostered evenings off. The Back-up Drivers 47 The second relevant provision in the agreement allowed the first applicant to engage Back-Up drivers to give relief to the second applicant. Their salaries were the responsibility of the first applicant, Kassafern. Clause 10 of the agreement states: 10 BACKUP DRIVERS 10.1 BA acknowledges that having regard to the hours of service to be worked by the SDC it will be necessary for the SDC to employ the services of a backup driver. The SDC undertakes to ensure that any backup driver is properly trained and used by the SDC at least once a month in order to keep up to date with the day to day practices requirements and responsibilities of the SDC. The SDC acknowledges that the appointment of any backup driver is subject to the approval of BA and NRMA and in this regard the SDC acknowledges that BA shall be at liberty to exercise a total discretion in determining whether or not to reject any proposed backup driver and that such rejection may take place without the provision of any explanation to the SDC. The SDC further acknowledges that such approval of BA and NRMA may be withdrawn in the event of such backup driver proving to be unsatisfactory in the opinion of BA or NRMA and in this event the SDC undertakes to terminate the services of the backup driver forthwith and to be solely responsible for any termination payment to be made to the backup driver in question. 10.2 The SDC confirms that there is no employment contractual or any other commercial relationship between the backup driver and BA and the SDC undertakes to at all times comply with all its legal statutory and other obligations arising out of its employment of the backup driver. 10.3 … 10.4 The SDC agrees that the hours worked by a backup driver shall not exceed the hours worked by the SDC's regular employee drivers and that the number of batteries delivered shall not exceed, in any one month, the number delivered by the SDC's regular employee drivers except with the consent of BA. 48 The first applicant employed the second applicant, Mr Geraghty as a Service Delivery Provider and two other back-up drivers, Mr Simon Gatt and Mr Garth Harcourt-Smith during the 23 months the service agreement was in place. Their work covered separate periods. Mr Garth Harcourt-Smith's records reveal he worked between 36 to 39 hours per week. He did this work from January 1998 to February 1999. The respondent relied on a receipt book produced by Mr Harcourt-Smith. In its form, I am not persuaded it is a complete contemporaneous record. 49 Mr Gatt allegedly worked a regular 30 hours a week in 1997. Two Kassafern time sheets were tendered covering his work and they revealed he worked generally a six hour shift. However, while one record sheet reveals in May 1997, Mr Gatt was paid $1,540.50 in July of 1997, another record sheet from Kassafern, with no times recorded on it, states he was paid $2,500.00 for July 1997. This would indicate he worked longer than 30 hours per week in that month. 50 I am satisfied the second applicant always had at least 30 hours a week relief from his back-up drivers and that both sometimes worked longer hours but no more than 40 hours per week. I am further persuaded together the two drivers covered as relief drivers for the second applicant for the full 23 month duration of the contract. Hours of Work and Remuneration 51 At issue is how many hours the second applicant worked under this contract and in what capacity he laboured be it performing an "on road" service or being "on call" and whether, given the requirement under the agreement that the service be available 7 days a week, 365 days a year, what was fair remuneration in the conduct of the employment contract. 52 The general information proposal as to potential income able to be earned under the service agreement which was provided to the applicants before the contract was signed was as follows: 4. POTENTIAL INCOME Potential income is based on the best available data and experience from existing operations. Battery Assist make no claims or guarantees to the actual returns for individual operators. Battery Assist recommend that you consult a professional financial planner, accountant or solicitor to assure you that the figures indicated here are reasonable. It is envisaged that Service Delivery Provider companies attend 3,000-4,000 jobs per year. Average jobs per day 8-11 (averaged annually) Average Delivery Fee per job $18.50-$20.00 GROSS INCOME $148-$220 per day $1036-$1540 per week $4501-$6691 per month $54,020-$80,300 per annum 53 The applicants alleged a further unfairness related to their reliance upon assurances as to "potential growth" of the business given to them by Mr Wallis prior to the execution of the Service Delivery Agreement. The second applicant submits he entered into the agreement under false expectations given to him by Mr Wallis. Mr Wallis revealed: At that time the figure of approximately $80,000 per annum was the relevant amount for an SDC to gross, with a possible range of up to $95,000 per annum. I agree I would have indicated that gross sales by the previous SDC in the NRMA region "O" (the Chatswood area generally) would, if the SDC had stayed, have been in the order of $80,000 per annum. Such statement is in accordance with my standard practices... At that time Battery Assist had between 5-10% of the market of New South Wales and the company expected to grow. It was my standard practice to indicate that Battery Assist was growing and to state nothing more. 54 Mr Geraghty may well have relied upon comments made by Mr Wallis as to potential growth for his service delivery business. He was given an indication of an income of $80,000.00 per annum. The company, Kassafern, was paid a gross income per annum in excess of this amount for the full financial year in which it operated. The earnings under the agreement will be later addressed. Hours 55 The hours of work of the second applicant in the performance of the contract were in dispute between the parties. The basic characteristics and the pattern of work performed by the applicants' van can be estimated through the respondent's records including the company's associated statistics. The statistics reveal in the 23 month life of the contract the applicants' van attended to calls on every day of the contract. 56 In order to estimate the extent to which the back-up drivers, Mr Harcourt-Smith and Mr Gatt, using the van gave relief to the responsibilities carried by the second applicant, Mr Geraghty, the statistics reveal in only seven days between January 1998 to March 1999 did the working day for Mr Geraghty's van begin after midday. Mr Harcourt-Smith or Mr Gatt drove the van between 2pm and 8pm sometimes in Mr Harcourt-Smith's case up to 10pm. This shift relief was available for Mr Geraghty for five days a week. Mr Geraghty would have started at or before 7am and worked until 2pm, then Mr Geraghty began work again between 6pm-8pm (approximately) on-call throughout the evening and early hours of the morning. He was then back on the road at or before 7am. 57 The evidence, as best I can determine it, was the second applicant worked 7am to 2pm, the relief driver 2pm to 8pm then from 8pm to 7am, the second applicant was "on call". He had little or no relief on weekends. Records reveal the second applicant's van was called-out after 11pm on 163 occasions throughout the 23 month life of the contract. That is, he was called out 163 nights out of 700 nights over 23 months. Mr Geraghty in his affidavit claimed: Most working days would commence around 6.30am and finish around 12 midnight with the occasional early morning call out ie 1am, 3am calls. 58 I accept the months of April, May and June were the peak months work for Battery Assist. I have examined the records placed before me. The 1997/1998 financial year was the only full year the applicants performed work under the contract. May 1998 was a busy month. An examination of the work performed by the van in this month assists and provides some guidance to the court as to the nature of work performed under the contract. It is mid-contract and through the identified busy period. In the 23 months it falls within the only full financial year covered by the contract. 59 During the month of May 1998 the van was called out before 7am on five days, after 7am on five days, after 8am on ten days, after 9am on seven days, after 10am on two days and one day after 11am. The latest in that month the van finished work was one minute past midnight. The van was called out after 8pm on 15 days and on 14 days its work finished before 8pm. 482 jobs were performed that month. 60 If one assumes the second applicant began work at or before 7am and the relief driver came on between 2pm to 8pm (at least), then in May 1998 the second applicant was called out 15 times after 8pm in the 31 day period. The second applicant asserts he was "on call" at all times. At first he claimed the total number of hours he worked were 168 hours per week. He, however, conceded in cross examination he had used back-up drivers for some of these hours but re-asserted he probably worked 138 hours per week. 61 In May 1998, the second applicant was on the road eight hours per day, five days a week equalling 40 hours per week; plus he was "on call" after 8pm, and as an example, called out 15 times in a 31 days period. Calling that 15 hours as work "on road" he therefore put in at least 55 hours of work plus was "on call" at other times. At weekends using, Saturday 23 May 1998 as a guide only, he was called out 15 times beginning at 10am and finishing at 8.30pm equalling 101/2 hours plus giving a similar credit to him for Sunday work he put in 76 hours per week "on road" plus "on call" time. I cannot therefore reach a conclusion the second applicant worked 138 hours per week as he asserts. It can be held he worked long hours perhaps up to 76 hours per week plus an "on call" time. 62 To calculate the loss claimed arising from the unfairness in requiring the second applicant to work such long hours, the applicants submit the court should strike an hourly rate from an applicable award and recognise 138 hours as the second applicant's labour per week. I reject the proposition the second applicant worked 138 hours per week. It is not supported by the evidence. Payments 63 Under the contract, payment was made for service by way of a delivery fee as defined under Clause 3 of the contract, not for hours of work. Clause 3.1 reads: 3. Delivery Fee 3.1 Subject to Clause 1 above BA shall pay the SDC a delivery fee with respect to the delivery and installation of all batteries by the SDC. (a) The amount of the delivery fee payable to the SDC shall be calculated in accordance with Schedule B and payable on a monthly basis within 14 days of the each of each month of trade. 64 It is relevant to examine how the first applicant was paid. I have again chosen the month of May 1998 for the purpose. The respondent's Income Statement to the first applicant for May 1998 was as follows. Income Statement Month: May 98 Name: Kassafern Pty Ltd Address: 5/530 Mowbray Road LANE COVE NSW 2066 Van No. 252 Sales: (Enclosed detailed report) Sales 403 $8,715.00 Warranties: 41 $615.00 Non Sales, Unable To Locate & Cancelled Jobs: 41 $410.00 Other Income: Sub Total $9,740.00 Other Payments Accessories $63.00 Any Deductions: Insurance May 98 ($168.23) Accessories Invoice 038232 ($18.00) Uniforms Invoices 0838835 & 0857627 ($151.50) Others Communication Fee ($75.00) Damage to members vehicle ($124.50) Banking Error ($82.00) Unders & Overs in Banking/Paperwork Underbank ($1,154.00) Total Payment: $8,029.77 The document reveals the applicants did not bank in May 1998 $1,154.00 of the income of the $9,740 earned. 65 An examination of the respondents' financial records determine the income received by the first applicant under the agreement. The financial records of the respondent and both applicants, Kassafern and Mr Geraghty, are relevant to determine what Kassafern earned and what Mr Geraghty and the back-up drivers were paid for their labours. 66 There were no Time or Wage Records tendered by Mr Geraghty or Kassafern or even, I find, no satisfactory records produced by the back-up driver, Mr Harcourt-Smith. No records were produced from Mr Gatt, the other relief driver. Two pages of Kassafern records, as to Mr Gatts' work, were tendered but I find they are also unsatisfactory and not comprehensive. 67 As to the lack of primary documentation, Mr Geraghty asserted he held little documentation, because "a lot of documents and receipts were destroyed" in a flood on the property in which they were stored. Except for his sworn evidence he offered no other supporting evidence as to this assertion. His evidence was that both his and Kassafern's tax returns, filed just before the hearing, had been prepared from his best recollection. 68 As to the first applicant's earnings, from April 1997 to June 1997, in the tax year 1996/1997, the first months of operation, Kassafern declared an income of $13,229.28. It paid Mr Geraghty $5,682.20 for his labour and the other drivers $3204.50. It declared an operating loss. 69 Kassafern, in 1997/1998, the next and only full year the company traded, declared a gross income of $101,950.00 and a net income of $3,607.00. Salaries "Ordinary", which the evidence revealed were paid to the back-up drivers, were declared at $27,222.00. The salary to "Associated Persons", identified in evidence as Mr Geraghty, was declared by Kassafern at $31,671.15. Mr Geraghty's tax return however declared a taxable income of $38,945. He acknowledged tax payments of $7,274.23 had been deducted by Kassafern. Kassafern's tax return in 1997/1998 suggest there may be a major non-compliance by the company in that it failed to remit tax on Mr Geraghty's behalf. The question as to what was Mr Geraghty's gross and net income therefore arises. Given the company declared it paid him $31,671.15 and he declared it paid him $38,945.00 and he further declared the "payer" for tax instalments deducted was "Kassafern Pty Ltd" their declarations are at odds. Both Mr Geraghty and the company seem to be claiming the taxation deduction. 70 Kassafern in its 1997/1998 taxation return claimed a deduction for a Hyundai car which, evidence revealed, was a private vehicle registered in Mr Geraghty's name. Deductions for the expense of a family vehicle which were incurred in the name of Mr Geraghty would normally not be accepted as a business tax deduction. Kassafern also claimed the fuel, oil and lease of this vehicle as deductions. Fuel and maintenance of the van were asserted in evidence by the second applicant to be $10,210.00 whereas the financial statements of the second applicant as at 30 June 1998 disclosed the relevant expense to be $5,251.23. Mr Geraghty revealed he retained no independent records of the monies he expended for fuel and oil and he did this estimate for the tax returns from his recollection. 71 Kassafern in the financial year 1998/1999 only traded from July 1998 to February 1999. It declared an income of $85,000-$90,000 "(approx)" with deductions for work performed of $14,000.00 for contractors and $28,080.00 "(approx)" to the second applicant, the principal driver. The court must grapple with what does the "approximate" mean as to the true income of either the first or the second applicant. As to the contracted drivers, the $14,000 expenditure over eight months indicates the applicant used less work from back-up drivers in the eight month period from July 1998 to February 1999 than was utilised by the company in 1997/1998. 72 To determine income and earnings I believe it fair to look at the earnings under the contract in the full financial year 1997/1998 and take into account the earnings from July 1998 to February 1999. The performance under the contract from February to end of June 1998 allows for both applicants to have an opportunity to build up the business. Kassafern under the contract enjoyed an income of over $101,950.00 in 1997/1998 and could have exceeded this in 1999 had it continued to trade into the identified busy months ahead. 73 Mr Geraghty, I find, was paid by the first applicant what Mr Geraghty determined as appropriate in the circumstances and it would appear such payments were made on an ad hoc basis without any detail as to the hours he was "on road" or the hours he was "on call". Whatever amount he was paid seems to have depended on the level of expenses incurred by the first applicant. 74 As to the taxation payments related to the second applicant's earnings, the taxation law puts the onus on the company to remit taxation payments. There appears to be a minor non-compliance issue in 1996/1997 and 1998/1999 and a major non-compliance issue in 1997/1998 as to the conduct of the first applicant's financial affairs. 75 The evidence revealed the second applicant, as principal of Kassafern, had retained and still retains taxation payments deducted from monies paid to the back-up drivers and at the time of the hearing, had still not remitted those payments to the Australian Taxation Office. In cross examination on this issue, the second applicant was asked: Q. In respect of those two individuals, being subcontractors, your company was required to retain taxes in respect of the prescribed payments scheme, is that right? A. That's right. Q. Did you remit to the Tax Office the tax which was payable in respect of moneys that you were providing to Mr Harcourt-Smith? A. No, I haven't. Q. No, you have not? A. No, I have not. Q. You deducted moneys from Mr Harcourt-Smith's payments but didn't remit them to the tax office? A. That's correct. 76 The first applicant also claimed a deduction for rent explaining it was a condition of the Service Agreement for the Service Delivery Provider to live in the area in which the Service Agreement covered. Mr Fouladi, the other Service Delivery Provider called to give evidence, confirmed this condition. Rent however was only claimed in the 1998/1999 financial year. 77 There were many discrepancies between the amounts pleaded as to earnings and the evidence produced. The respondent relies on these discrepancies to submit Mr Geraghty is not a man of truth. Banking procedures 78 There was dispute as to the second applicant's habit of under-banking. It was alleged he held on to cash and cheques that were the property of the respondent. From the documentary evidence, all monies were accounted for eventually. 79 I have difficulties casting aspersions on Mr Geraghty's practice of withholding cash as the documentation of the respondent reveals that it took into account the deduction of cash "held-over" in their monthly accounting procedures under the heading tendered "Unders & Overs in Banking/Paperwork". Termination 80 The termination of the contract occurred by agreement between the parties when the second applicant as a Director was called in and the first applicant, Kassafern, was suspended for the practice of retaining cash received and circumstances related to a particular cheque transaction. I accept the respondent had warned the applicants against its banking practices a number of times but it appears withholding cash received is an endemic practice, allowed even under Battery Assist's own fiscal accounting system. 81 The applicants were given a number of warnings from the respondent as to banking practices as indicated in the last letter received: 10th March 1999 Kassafern Pty Ltd The Director 16 Stanley Street PUTNEY NSW 2112 Dear Sir, Following consideration of the banking summary for Kassafern Pty Ltd ("Kassafern") it is apparent that again Kassafern have for the month of March 1999 banked late, being in breach of clause 1.3 (e) (ii) of the Service Delivery Agreement ("the Agreement") between Battery Assist Pty Ltd ("BA") and Kassafern dated the 9th of April, 1997. Further it is evident that Kassafern have failed to bank sufficient funds in relation to banking for February 1999 invoices due to the return of a dishonoured cheque from Kassafern to BA to the amount of $2,267.00. In these circumstances Kassafern is notified that BA suspends Kassafern pursuant to clause 17.2 of the Agreement until further written notice. Further BA request that a Director of Kassafern attend a meeting at the premises of BA, 191 Power Street, Glendenning, NSW, 2761 on the 11th of March, 1999, at 12.00pm. All outstanding banking sheets, and invoices for the month of March 1999 are also to be brought with the Director. Should there be any reference to the above a Director of Kassafern should contact the undersigned immediately. Yours Sincerely Alan Stubbs STATE MANAGER 82 Following this suspension, the second applicant determined to sell his van and leave the contract. The contract allowed same with the approval of the respondent. The second applicant submits the respondent worked against his interests when it was asked by a potential purchaser to give an estimate of the value of the applicant's van. It gave a value to the purchaser of $16,000.00. The second applicant had wanted to get back his $30,000 outlay. The respondent argues the second applicant was attempting to gain a goodwill for the business in the price he set. The respondent submitted as the applicants paid no goodwill to enter into the business, they were not entitled to such a price simply for the van. The applicants contend all they wanted was to get back the monies they outlaid and the respondent worked against their interests. The applicants eventually sold the van at a loss. Alterations to the System of Work 83 Since the first applicant's Agreement with the respondent was entered into there have been variations made by Battery Assist (now Club Assist) to the Service Agreement. I accept there had been concerns expressed to the respondent from the service providers as to the clauses in the Service Agreement requiring each principal to be "on call" 24 hours a day, 365 days a year. 84 The applicants assert the clause in the present Service Agreement has been varied from that entered into by Kassafern. The Agreement now states at Clause 11.5: The SDC shall employ or otherwise engage a minimum of two (2) SDPs. (Service Delivery Providers). The variation refers to the need for a minimum two drivers. Mr Wallis was questioned as to this contractual change: Q. What that clause is really saying is that it is no longer an option to employ people, that in fact its now mandatory you're required to do it? A. Yes, but the SDP is also a principal in that sense. I believe Mr Wallis to be saying one of those drivers could be the service delivery provider and another a back-up driver and both were permitted under the old contract. However, I find the contract has been strengthened in its requirement two drivers be employed. 85 The Buddy System has also now been strengthened. The respondent has employed two "peak" drivers as employees of Battery Assist. They are employed to deal with "area overloads". The Service Delivery Contractor, for a weekly fee paid to Battery Assist, can use these employed drivers of the respondent between the hours of 11pm and 6am to cover their district. It is indicative of the work demand in that time slot that Battery Assist can provide two drivers to give assistance to all the service providers across metropolitan Sydney, who choose to pay for the relief service at $200.00 a week. The demand in this period is not excessive. The respondent's statistics reveal Mr Geraghty's van was called out after 11pm on 163 nights out of 700 nights covered under the contract. 86 The second applicant described the effect of working under the contract as always being in a "state of readiness". By "state of readiness" he meant the van had to be available for any job despatched to him from the NRMA Call Centre at any time day or night every day of the year. The second applicant asserted the terms of the agreement were such that Kassafern was not allowed to refuse a job from the NRMA Dispatch Centre. The second applicant asserts, given the expense of hiring a back-up driver to provide him with some relief from the demands of the contract, he had to drive the vehicle 138 hours a week to make $35,000.00 (approximately). 87 From the records available I am only able to discern the second applicant began work sometime on or about 7am each day of the week from Monday to Friday; he stopped at 2pm, after 8pm he was "on call" and often not called out. He was "on call" all weekend. He cannot define which hours he was at work and which hours he was "on call". The company remunerated him for his labour between $31,000.00-$38,000.00 a year. 88 The second applicant asserts for the hours he was "on road" and was "on call", the hours term of the contract was unfair. He further asserts the contract is against the public interest or that it provided him with remuneration less than an employee would earn. Consideration 89 Applications under s106 of the Industrial Relations Act 1996 have been given much judicial consideration. Barwick CJ said of s88F, a prior provision similar to the provision s106 in the present Act in Stevenson v Barham (1976-77) 136 CLR 190 (at 192): Notwithstanding the wide language of section 88F, I have found difficulty in becoming convinced that it was within the contemplation of the Legislature that agreements for business ventures of which the present may be a specimen freely entered into by parties in equal bargaining positions, should be so far placed within the discretion of the Industrial Commission as to be liable to be declared void. However, I have come to the conclusion that the language of section 88F of the Act is intractable and must be given effect according to its width and generality. The Legislature has apparently left it to the good sense of the Industrial Commission not to use its extensive discretion to interfere with bargains freely made by a person who was under no constraint or inequality, or whose labour was not being oppressively exploited. 90 A contract may not be unfair in the circumstances in which it was entered into but may become unfair in the context in which the contract operates. In McNaught v Micador Australia Pty Ltd (1996) 83 IR 111, Hungerford J said (at 117): In determining whether "unfairness" in the contract or arrangement has been established, regard may be had not merely to the terms of the contract or arrangement, as originally negotiated, but also to the manner in which the contract or arrangement has ultimately worked out and operates as between the parties to it: Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 133-134, 140,149 (per Kirby P, semble, Meagher and Sheller JJA). Relevant to the applicants' claim it is against the public interest to require an individual to provide a service 24 hours a day, 365 days a year and for meagre return, is the consideration of the Full Bench of the Commission sitting in Court Session in Metrocall Inc v Electronic Tracking Systems Pty Ltd (2000) 101 IR 66 (at 90-91) it was said: . . . An 'unfair contract' is defined first as a contract which is "unfair, harsh or unconscionable", but also includes contracts which are "against the public interest" or which provide remuneration less than that available to an employee or which are designed to avoid an industrial instrument. Whilst unconscionability is a concept known to the general law as well as the Trade Practices Act, the concepts of "unfair" and "harsh" indicates the breadth of the jurisdiction. The fact that section 106 is aimed at contracts which are against the public interest or which undermine the system of Industrial awards and agreements indicates that Parliament intended that the Commission exercise its functions not merely in the manner of ordinary inter partes litigation but so as to assist in the achievement of Industrial objectives set out in the Act. 91 The applicants make a general assertion the contract "was unfair, harsh or unconscionable and against the public interest" and make application for the contract to be varied from its commencement or from some other relevant date. The applicants allege under the terms of the contract the principal was required to work long hours in a routine established solely by the respondent and he was given minimal financial return for those long hours of labour. Such circumstances the applicants allege make the contract unfair. The second applicant should be perceived, in such unfair circumstances, the applicants asserts, as an employee of the respondent and, it follows, entitled to be justly compensated in accordance with relevant industrial rates. Guidance as to the appropriate rate of pay should, the applicants assert, be as defined in the NRMA Patrol Officers Enterprise Agreement which Agreement reflects the industrial policy established through relevant awards namely the Shop Assistants Award and the Transport Award - which policy asserts an appropriate payment be made for work "on road" and a payment when a driver is required to be "on call". 92 The applicants assert the contract in its operation reveals both applicants were in reality engaged in a joint venture or, at the very least, a joint project whereby the work performed by the second applicant was co-ordinated with and by the NRMA road service network. The second applicant and others were therefore part of a parallel workforce to that of the NRMA Patrol Officers and should be equally renumerated it is asserted. 93 The respondent submits as to the claim for unfairness, Clause 19.1 of the contract has the effect "upon a proper and principled approach (to be) a bar to the work of the applicants' claim". This is particularly so where there was no duress or material inequality in bargaining power between the parties at the time the agreement was reached. 94 I do not understand the respondent to argue, as the applicants submit, that because the agreement was freely entered it cannot be reviewed pursuant to s106 but rather the respondent submits this agreement was fair and as there was no unfairness related to the parties understanding of the agreement, clause 19.1 has effect and the agreement should not be varied. 95 The respondent further submits the terms of the contract were respected by the respondent and in the performance of this contract there was no unfairness. The first applicant was remunerated in accordance with the terms of the contract and the second applicant was fairly remunerated for the service he provided to the first respondent. Employment 96 As to the employment relationship, the applicants assert the facts establish the second applicant was an employee of the respondent. Some guidance as to determining an employment relationship is found in Stevens v Brodribb Sawmilling Company Proprietary Limited, Gray v Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16. The High Court (Wilson and Dawson JJ) said (at 35): The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it: Performing Right Society, Ld. v. Mitchell and Booker (Palais de Danse), Ltd. [1924] 1 KB 762. The modern approach is, however, to have regard to a variety of criteria. Further (at 36-37): In many, if not most, cases it is still appropriate to apply the control test in the first instance because it remains the surest guide to whether a person is contracting independently or serving as an employee. That is not now a sufficient or even an appropriate test in its traditional form in all cases because in modern conditions a person may exercise personal skills so as to prevent control over the manner of doing his work and yet nevertheless be a servant: Montreal v. Montreal Locomotive Works (1947) 1 DLR 161, at p 169. This has led to the observation that it is the right to control rather than its actual exercise which is the important thing ( Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 at 571) but in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. . . . The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance. 97 These tests were applied by the High Court more recently in Hollis v Vabu Pty Ltd (2001) 106 IR 80 where it was found a bicycle courier, over whom the company held control for job allocation, finances and riding outfits was found to be an employee. The fact the couriers provided their own tools, eg, bicycles, did not indicate they were independent contractors. However, I distinguish this case. The couriers' relationship was directly with the company that exerted the control. In the circumstances before me there is an intervening relationship between the parties to the litigation and a third party, the NRMA. 98 It is necessary to have regard to a wide range of matters to determine the nature of a work relationship (see Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24.5 per Mason J; 35.5 per Wilson, Dawson JJ; 49.8 per Deane J; Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 406-407 and Zujis v Wirth Brother Pty Ltd (1955) 93 CLR 561 at 572-573). While control may represent "the surest guide" (Stevens at 36.3) it is not the sole criteria and other relevant matters must be given consideration. No criteria is conclusive. 99 To determine the work relationship the following indicia are relevant to the court's consideration: the language of the contract, the form, frequency and mode of remuneration; payment of outgoings; provision and maintenance of equipment; obligation to work; hours of work and roster; provisions for holidays; deduction of income tax; capacity to delegate work by putative employer; right to have a particular person to do the work; right to suspend, dismiss or discipline; right to exclusive service; duration of appointment and/or permanency; possibility of promotion; requirement to conform to employer's requirements with respect to ethical conduct; compliance with the law and observance of appropriate procedures; method of selection in recruitment; use of sick leave and/or annual leave. 100 Clause 1.3(m) of the Service Delivery Agreement and the language of the Agreement entered into by the second applicant, who had access to legal advice, acknowledges there was intended to be no employment relationship established through this Service Agreement. The second applicant, through the company was required to provide the equipment, that is: invest in a van, tools and drive and maintain the vehicle. The first applicant was responsible for the provision and maintenance of all equipment. The first applicant enjoyed the benefits of tax deductions for this equipment cost and the running cost of its vehicle. The investment was significant. The first applicant under the contract could and did employ drivers, including back-up drivers, whose hours of work the first and second applicants could and did determine. The first applicant, with consent, could assign the contract to another company. The first applicant could organise its financial arrangements. The first applicant was paid for services performed from the digital record kept by the NRMA and forwarded to the respondent on a monthly basis. The first and second applicants defined their own work roster. The first applicant could determine which individual provided the service delivery - be it the service delivery provider, a contract driver or a "buddy driver". The first applicant accepted the NRMA records be the basis upon which the respondent paid it for sales. While back-up drivers were given training by the respondent at the commencement and during the course of employment, such training related to issues of agreed procedures under the contract. Training, whilst provided by the respondent, was cost shared under the Agreement. 101 The language of the contract disavows any suggestion that an employment relationship was intended. While the uniform worn by the drivers was in accordance with the requirements of the NRMA and while the drivers could be held to be connected to the NRMA they could not be held to hold themselves out as recognisably connected to the respondent, Battery Assist. 102 I accept there was considerable control exerted over how the delivery of the service was to be performed. I find the first applicant entered into a contract for the delivery of a particular service with the system of work clearly defined. The terms of the service delivery were specific in the contract. The contract revealed the service was specifically designed and it specifically revealed the relationship to the NRMA. The contract did not in any way deceive as to its purpose being a service delivery. I find the second applicant was under no duress and was acting on his own behalf in the establishment of the company of which he was the principal and in agreeing to take on duties as service delivery provider. I find the first and second applicants contracted to provide a service delivery. The contract recognised payments under it would be made for sales made referred to as "Delivery Fee" (clause 3 of Contract) not hours worked. I find the contract defined the applicants' roles: the first applicant, as the Service Delivery Contractor and the second applicant, as the Service Delivery Provider. I take into account the control exerted in the system of work adopted but I accept the applicants were acting on their own behalf. I reject the claim the second applicant was a servant of the respondent. I find therefore the second applicant was not an employee of the respondent. I reject therefore the applicants' claim the second applicant was an employee of Battery Assist. Unfairness 103 It remains to be considered under s106 whether there was an unfairness in any term of the contract or in the performance of the contract given the second applicant has been found to be a contractor working under a contract of employment under which work was required to be performed as a Service Delivery Provider (see Mitchforce v Industrial Relations Commission & Ors [2003] NSWCA 151). 104 The change made to the contract requiring the first applicant, the Service Delivery Contractor, to hire support drivers and the decision by the respondent Battery Assist to employ two night drivers to cover the hours 11pm to 6am, are changes directly relevant to the alleged unfairness asserted by the applicants, namely, that in the performance of the contract there was an unfairness in the requirement of the respondent for the delivery of a service 24 hours a day, 365 days a year for meagre return to the service delivery provider. 105 As to the changes now made to the Service Agreement (for example, the provision of night drivers) the respondent submits such a fact was not relied upon in the pleadings so the court should not accept the evidence and should not take such established facts into its consideration in its determination as to any unfairness either in the contract or in the performance of the contract. The respondent submits an applicant is specifically required by the Rules of the Industrial Relations Commission to give proper notice in its pleadings of the claim it makes and the orders sought (see, for example, Rule 18A(1), Form 12A and Rule 57(1)). 106 The applicants established the two alterations to the contract, namely the amendments of Clause 10 of the contract and Battery Assist's decision to employ drivers in the evenings to support the Service Delivery Providers, through the issue of summons and from evidence of witnesses including witnesses called by the respondent. While accepting the ruling of the Full Bench in Bourke Air Charter v Easton (2002) 109 IR 443 at [41-42] where their Honours commented as to the need for pleadings to outline any claim to be met by a respondent, I do not believe pleadings are required to state all relevant facts. Facts established by the evidence are both admissible and can be taken into account in the court's consideration of the claim before it. 107 The respondent further submitted it would be wrong in principle to use the mere fact of a change or proposed change in contractual arrangements as an admission of 'unfairness' in the sense of s106 of the Act (see Smith v Craig Mostyn & Co Pty Ltd (1984) 2 NSWLR 393 at 401E). 108 From the totality of the evidence taking into account the second applicant's evidence and that of the other driver, Mr Fouladi, who described the difficulties under the contract one of which was making a reasonable income from delivering a 24 hour service, 365 days of the year and also weighing into my consideration Mr Wallis' evidence of the changes made to the system of work, I am persuaded the change in the contract requiring at least two drivers to be employed to provide the service and the hiring of two night drivers as employees of the respondent to support the Service Delivery Providers were changes made because of expressed concerns as to the demand for the service to be available 24 hours a day, 365 days a year. That is not to say that any contract requiring 24 hour, 365 day service is per se unfair. The claims here are that the demand on a Service Delivery Provider in the circumstances of this contract required long hours of labour and for an unfair remuneration. 109 I find the changes made to the contract and the employment of relief drivers by the respondent now available to the Service Delivery Contractor are changes relevantly directed to the assertion of the applicants, that the contractual requirement of providing a service for 24 hours a day, 7 days a week, 365 days a year was unfair, harsh and unconscionable and/or against the public interest. I find the changes made by the respondent to the contract were reactive and directed to allay the specific complaints made to the respondent by the Service Delivery Contractors and the Service Delivery Providers reflecting the difficulties they had under the contract in providing the service for which they had contracted. 110 The company, the Service Delivery Contractor was required to provide the delivery of a service 24 hours a day, seven days a week, 365 days a year. The NRMA Patrol Officers Enterprise Agreement, with the Union, also acknowledged a 24 hour, 365 day a year service. However, the contract itself acknowledged the demand for such service delivery required support for the Service Delivery Provider through a buddy system and back-up drivers. The support services available have now been strengthened. I accept the fact that there is no unfairness per se in the term requiring the delivery of a service 24 hours a day, 365 days a year. This contract acknowledged the need for back up support to the driver. That support service has been adjusted and improved. I do not believe the extra support provided established the term requiring the service 24 hours a day is unfair and should be varied. 111 I have found the second applicant could have worked per week on-road, in his own arrangement of his affairs, 70 hours, and was on-call an extra number of hours. It becomes a question of fairness as to whether he was in such circumstances fairly renumerated. Compensation 112 The second limb of the claim is the applicant worked long hours for meagre reward. If an unfairness in a term of or in the performance of the contract is found, consideration must be given as to whether to make an order and what order would be just in the circumstance. Barwick CJ in Brown v Rezitis (1970-71) 127 CLR 157 commented on the similar statutory provisions to s106 saying it is directed to (at 16): ... a broad concept of a restitution of the parties to a situation which existed before the making of the contractual arrangement as well as in an appropriate case to make remedial provision for what has taken place or been done under the contract in the meantime. Awards 113 The applicants submit the court should take guidance from the relevant Awards and the NRMA Enterprise Agreement in its determination as to compensation just in the circumstances. As a matter of fairness, the applicants submit all hours "on call" should be recognised by a monetary payment. The applicants conceded there was no award which matched the job description of the Service Delivery Providers. The Transport Awards and the NRMA Enterprise Agreement however were relied upon as both acknowledge drivers "on call" should be compensated for their services. The applicants assert the close connections between the two service delivery workforces that is the NRMA Patrol Officers and the Service Delivery Providers performing "on road" battery delivery are such that the NRMA Patrol Officers Agreement provides the Commission sitting in Court Session with the best guidance as to fair earnings. The Transport Award reveals the relevant policy position namely: persons subject to recall in transport and related industries are entitled to a financial consideration for the inconvenience of being "on call". That consideration is reflected in an allowance. The 'on call' allowance is supplementary to payment for time worked if "called in". Such underpins the terms of the NRMA Limited Patrol Officer (Enterprise Agreement). 114 I am satisfied the Shop Assistant's Award, the Transport Award and the NRMA Enterprise Agreement relied upon can only give guidance to the Commission sitting in Court Session as to how to determine "just compensation". 115 The respondent meets the applicants' submission as to the applicability of the awards and enterprise agreement, arguing from the authority of Lipman & Anor v A G Lifestyle Management Pty Limited & Anor [2003] NSWIRComm 160 (on appeal) where Schmidt J held at [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. Her Honour however did not reject the concept of a "best fit" Award but noted at [107]: . . . 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. She therefore found some awards could be relevant. In Bourke Air the court found assistance from a Federal Award in determining just compensation for a young pilot. This reasoning was not overturned. 116 The NRMA Enterprise Agreement for Patrol Officers reveals, in the Sydney region, allowance is made for overtime by agreement. In country areas there is an allowance given of $26.25 when "on call", in addition to payments for work performed if called in. In country areas there is a varied minimum payment for overtime between two to three hours. 117 The order sought in respect of the claim is for payment to the first applicant (Kassafern) (see Order 3) and/or the applicants (see Order 4). The respondent perceives the claims as follows: The primary claim in effect is that Kassafern makes a claim that it should be compensated, in advance, for a payment which it might, in its discretion, make to Mr Geraghty if the advance payment of compensation is directed by the Commission from Club Assist. Such a claim is highly unsatisfactory in every respect. It amounts to an abuse of the privilege which the proceedings represent, an abuse of the processes of the Commission, which afford Kassafern its present opportunity for litigation. This, and for similar reasons, the wages claim, should be decisively rejected with indemnity costs regardless of any other outcome of the proceedings. I reject this submission of the respondent. 118 The orders sought are for time "on road" and time "on call" by the second applicant, as the principal of Kassafern, the first applicant, with some guidance as to the appropriate rate from relevant awards and a relevant agreement. 119 The Commission sitting in Court Session must rely, for its assessment of the loss suffered for long hours worked for meagre reward and any associated just compensation on the pleadings, the evidence from Mr Geraghty, the respondent's records and the limited financial records of the applicants, including both applicant's tax returns. 120 As to the "meagre reward", the tax return of the first applicant discloses, in the only full financial year during which there was performance under the contract, the first applicant had an income before tax of $101,950.00. This income is above that provided in the estimation of the respondent of expected earnings: it estimated an income of the company of up to $80,000.00. 121 The first applicant reveals it paid the second applicant $31,671.15 in the financial year 1997/1998. There were questionable deductions made for the cost of running a private vehicle. The second applicant's tax return for the same year acknowledges this income but suggests $7,274.23 was also paid in taxation payments for the income earned. He acknowledges therefore an income of $38,495 for that year. The returns do not correlate. The respondent calls into question rent claimed as a deduction. There were deductions for running costs of both the private vehicle and the van. Few if any deductions were supported by primary receipts. 122 The respondent's records reveal the applicants began the Service Delivery Contract in April 1997. There was a building up of the business to the end of June 1997. There was then a full financial year's work performed under the agreement between July 1997 and June 1998. The contract was terminated in February 1999. Kassafern, the first applicant, was paid $13,229.28 in 1996/1997; $101,950 in 1997/1998; $91,495 in 1998/1999 - a total of $206,674.28. 123 It was declared the second applicant was, over the 23 months, paid at least $72,707.70 which represents over the 92 weeks of the contract, $790.80 gross a week. He also had the running cost of both vehicles covered and some rent payments. The NRMA Agreement (1997) allows for a 38 hour week over a six day roster and salaries between $767.18 and $792.18 plus some other allowances and an overtime rate. These officers working under such an agreement would earn more than the second applicant. However, they are paid on an hourly basis. The second applicant agreed to be paid for services performed. The basics of the contract are different. I do not believe it is against the public interest to contract for service delivery on sales instead of an hourly rate. It is not per se unfair. 124 While there is before me some documentation supporting the payments made from the respondent to the first applicant and the earnings of the second applicant from the first applicant I am not satisfied because of the lack of documentation as to the true earnings of each applicant. The second applicant's hours "on road" and hours "on call" are ill defined. There is unsatisfactory record keeping of both applicants. There are unsupported deductions claimed. There are differences between the two tax returns which include the question of liability for taxation payments for all drivers, including the second applicant. In the 1998/1999 tax return there is only an approximation given as to the earnings of each applicant. All are matters which I take into account in finding there is no reliable way of ascertaining the true earnings of either applicant. 125 The applicants' claim the unfairness is not solely the long hours of work but also the long hours of work for meagre reward. The court, it is submitted, in its consideration for just compensation should accept an assessed annual income of $38,745 by the second applicant from his employment with Kassafern from which an hourly rate can be calculated. For that calculation, the second applicant submits he worked 138 hours per week. 126 As to the hours of "work" of the second applicant, I find significant difficulty with the evidence. Estimates as to when the second applicant was either "on road" or "on call" I find are based on the most general, scanty and unreliable material. Neither time sheets nor wage records were kept. Both applicants carry the onus to make out a case of unfairness in the terms and/or conduct of the contract. 127 On a reading of all the Awards tendered as well as the asserted relevant Enterprise Agreement, hours "on road" attract a different rate from hours "on call". I cannot accept the proposition from the second applicant that he should be paid the rate for a person "on road" for the many hours he may well have been "on call". 128 Further, I find it relevant the applicants entered into an agreement which agreement allowed for payment calculated on sales made, called in the contract a "Delivery Fee", not on hours worked. There is no claim advanced that either applicant but especially the second applicant could have made, or was denied, the opportunity to make more sales. 129 As was observed by Dey J in Federated Miscellaneous Workers' Union of Australia New South Wales Branch v Wilson Parking (NSW) Pty Ltd & Ors 1980 AR 352 (at 363), it may not necessarily be unfair that a person is willing to sell his labour cheaply. An unwillingness after the effects of such a decision are felt does not ground a declaration for unfairness reflected in just compensation. 130 The difficulty I have with the evidence is, notwithstanding my findings the contract in its performance required long hours of labour from the second applicant, I am unable to determine from the evidence how many hours the second applicant himself laboured and what exactly was earned under the contract by the second applicant. I am further unable to discern what hours he was "on road" and what hours he was "on call". I cannot come to any safe conclusion as to what were either the gross or net earnings of the second applicant from the evidence. The expenditure claimed as costs to conduct the business of the first applicant is also unsatisfactory. 131 The court is asked to come to a concluded view and award an amount of compensation by reference to particular assertions in circumstances where I find to do so would be speculative and unsafe Both applicants have failed to put forward any credible material from which I can make any finding as to what was earned for hours worked. I reject the claim that a clause requiring a 24 hour service, 365 days of the year is unfair especially in a contract which acknowledges support services. 132 Counsel for the applicants summarised a further claim thus: "long hours worked for meagre reward". Even if I accept Mr Geraghty's annual income was between $35,000.00 and $38,000.00, and I do not, it is unclear how many hours he worked for that income and the nature of the type of work he performed to earn that income - be it work "on road" or by way of "on call". 133 The evidence as to the gross income of the first applicant is supported by the respondent's records but there is no evidence other than the tax returns as to the business deductions of the first applicant. The claim that all records were destroyed in a flood I do not accept as a satisfactory explanation. There lies a responsibility and onus in this case on both the individual income earner and the business enterprise to prove the expenditure of monies used to generate income. I reject much of the second applicant's evidence as to the cost of running the business. I cannot come to any conclusion as to what the second applicant was paid for his labour. I reject therefore the second limb of the claim that the applicant worked long hours for meagre reward. 134 I cannot therefore be satisfied the contract was unfair, against the public interest or that Mr Geraghty was paid less than an employee would earn for his labour. 135 I therefore reject the claim brought under s106 of the Industrial Relations Act 1996 by the first and second applicants. 136 The summons also seeks an order: the second applicant as the principal of the first applicant be able, on the open market, to sell the battery run. Under the contract the applicants were not entitled to sell the van with a component of goodwill. No goodwill monies were exchanged between the applicants and respondent when the contract was agreed. I do not believe evidence that the respondent put a lower value on the van than the value the applicants struck when they wanted to sell it establishes an unfairness in either the terms of or the conduct of this contract. 137 The applicants contend in the Amended Summons that in the event that Mr Geraghty was not an employee of Battery Assist, then a contract or arrangement requiring a contractor to work the hours which are the subject of these proceedings, and which does not provide for annual holidays, is against the public interest. Reliance is placed by the applicants on the judgment of Cahill J, Vice-President in Smith v Bellamy Council (1988) 81 IR 97. In that matter, Mr Smith was found to be an employee of the Council and the Council, as the employer, was thereby required to pay him annual holidays in accordance with the Act and the relevant award provisions. As there is no finding as to employment with Battery Assist, I reject the claim that Battery Assist has a statutory obligation to pay the second applicant annual holiday pay. Had it been clearer that Kassafern took out taxation deductions from the second applicant's income, it is possible an annual holiday obligation to the second applicant could be held by the first applicant. 138 The respondent submits the court has an obligation to forward these reasons for judgment and the transcript of the hearing to the Attorney General of the Commonwealth and the Commissioner of Taxation. Evidence revealed both applicants filed late taxation returns. The Taxation Commissioner is well able to protect its own interests in circumstances where there has, if belatedly, been partial compliance. The submission the transcript be referred to the Attorney General relies on a court finding as to possible perjured evidence from the second applicant. While I have not accepted all of the evidence of the second applicant, I make no such finding. 139 The respondent requested the opportunity to supplement submissions orally before the court. It submits the issues are best addressed orally. The estimate of hearing for this case by both parties was three days. The court sat a number of extended hours so the evidence could be completed. The respondent has filed 44 pages of submissions covering 116 points in clear and concise English directed to the issues it identified to be determined by the court. I decline the application to call the parties back for oral submissions. The court has been assisted by both parties' submissions on what the respondent terms "the difficult evidentiary and legal issues" before it. ORDERS 1. The Amended Summons brought by Kassafern and John Geraghty against Battery Assist Pty Limited (now known as ClubAssist Pty Limited) is dismissed. 2. Leave to re-list as to Costs. 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