Industrial Relations Commission of New South Wales in Court Session CITATION : Vicary v Pacific Highway Health Pty Ltd t/as Health Search Global [2004] NSWIRComm 232 APPLICANT David John Vicary PARTIES : RESPONDENT Pacific Highway Health Pty Ltd t/as Health Search Global FILE NUMBER: 7002 of 2002 CORAM: Marks J CATCHWORDS : Ex parte judgment - joint venture recruitment services - unpaid invoices - dispute over allocated equity share - respondent failed to honour representations as to payment for services - unfair contract - immediate payment ordered plus interest and costs. LEGISLATION CITED : Industrial Relations Act 1996 ss 105 106 Legal Profession Act HEARING DATES: 08/11/2004 DATE OF JUDGMENT: 08/24/2004 APPLICANT LEGAL REPRESENTATIVES: Solicitor: Mr J Moerkerke JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Tuesday 24 August 2004 Matter No IRC 7002 of 2002 DAVID JOHN VICARY v PACIFIC HIGHWAY HEALTH PTY LTD t/as HEALTH SEARCH GLOBAL Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2004] NSWIRComm 232 1 The applicant in these proceedings, David John Vicary, claims certain relief against the respondent, Pacific Highway Health Pty Ltd trading as Health Search Global, under s 106 of the Industrial Relations Act 1996 ("the Act"). Relevantly, sections 105 and 106 of the Act are in the following terms: 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 . 106 Power of the Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss. 2 The proceedings were undefended in that the respondent did not participate in any way by filing any affidavit material. They were heard ex parte. 3 Affidavits from the applicant, Mr Brian Clarke and Mr Allan Pittman were tendered into evidence and oral evidence was given by the applicant and Mr Clarke. 4 The factual background to these proceedings can be stated quite shortly. A number of persons, including Messers Pittman and Clarke and, in particular, a Mr Tim Costa, arranged in late 1999 for the applicant to provide recruitment services to a joint venture which was intended to conduct business as "a global healthcare recruitment consultancy". The applicant commenced providing services in February 2000 on the basis that he would receive equity in the joint venture business but would not be paid any salary until sufficient venture capital had been raised. The respondent was incorporated in May 2000, one of the directors of which was Mr Costa. The applicant commenced providing recruitment services to the respondent throughout 2000 and during the first few months of 2001 and during this period sought formalisation of the basis for payment of remuneration. He was advised that the requisite amount of venture capital had not been raised. Arrangements were made that he would receive an enhanced shareholding in the respondent in recognition of the work that he had performed. This was increased again in March 2002 when no concluded arrangement had been made. However, during this period the applicant had by agreement with the respondent rendered a number of invoices for work performed which Mr Costa on behalf of the respondent said would be reflected in the value of equity in it allocated to the applicant. 5 After a dispute with a number of persons associated with the respondent concerning the level of equity in the respondent to be allocated to the applicant, the applicant was advised by Mr Costa on 15 May 2002 that his services were no longer required and that he was not to be offered any equity in the respondent. He was told that he would receive "an amicable offer" in recognition of the invoices which he had presented on 21 March 2002. 6 In a telephone conversation on 25 June 2002 Mr Costa offered to arrange for payment of the applicant's outstanding invoices over a three-month period. The applicant declined to accept payment over this period and his relationship with the respondent ended accordingly. 7 In these proceedings the applicant has confined his monetary claim to the sum of $34,445.08 together with interest and costs. That amount represents unpaid invoices. The applicant has declined to press any further claim with respect to other work performed by him over this period of time. 8 I accept the submissions made on behalf of the applicant that there was an arrangement between him and the respondent that he would provide recruitment services and perform other work with the inducement that the applicant would be allocated equity in the respondent and would be employed by the respondent at a salary initially of $100,000 together with bonuses and share options. I find that the applicant performed work for the respondent pursuant to that arrangement. The arrangement became unfair because the respondent failed to honour representations that the applicant would be given an equity share in the respondent and would be employed on a salary together with bonuses. This unfairness is compounded by the fact that the applicant was paid very little during the course of the period during which he performed work for the respondent and that, of invoices rendered, an amount of $34,445.08 remains outstanding. 9 Consequent upon this finding of unfairness I propose to vary the agreement by requiring immediate payment to the applicant by the respondent of all amounts outstanding and unpaid with respect to invoices rendered to it by the applicant. 10 Consequent upon this variation I order that the respondent pay the applicant the sum of $34,445.08 together with interest thereon assessed pursuant to the Supreme Court Rules from 15 May 2002 to the date of judgment. The applicant should also have an order for costs in his favour in an amount assessed under the Legal Profession Act in default of agreement. 11 ORDERS Consequent upon the finding of unfairness which I have made I make the following orders. 1. The arrangement between the applicant and the respondent described in these reasons for judgment is varied as at 15 May 2002 by requiring immediate payment by the respondent to the applicant of all amounts outstanding under invoices rendered by the applicant to the respondent for work performed pursuant to that arrangement up to 15 May 2002. 2. The respondent is to pay the applicant the sum of $34,445.08. 3. The respondent is to pay interest on the above amount calculated in accordance with the rules of the Supreme Court from 15 May 2002 to this date. 4. The respondent is to pay the applicant's costs of these proceedings in an amount assessed under the Legal Profession Act in default of agreement. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.