Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales (on behalf on S & L Bozinovski Pty Ltd and MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd [2007] NSWIRComm 286 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Glen Cameron Nominees Pty Ltd FILE NUMBER(S): IRC64; IRC65 of 2007 CORAM: Sams DP; Macken Dr J; Tinney Mr G Applications to Contract of Carriage Tribunal - contracts of carriage in the road transport industry - five year contract for delivering of paper - contract not renewed - contract drivers entered into contracts during term of major contract - payment of goodwill to enter the yard - assignment of existing contracts - requirement to sign acknowledgement that goodwill not required to be paid - whether respondent was aware of goodwill payment - terms of contract prevented any compensation for loss of contract - custom and practice of paying goodwill in the yard - hearsay evidence - whether respondent took steps to advise that goodwill was not a requirement to enter the yard - whether respondent offered alternative work to displaced carriers - no offer of alternative work taken up - preliminary jurisdictional issues - whether there was a head contract of carriage - whether the drivers were carriers - whether the respondent a principal contractor - jurisdiction under s 346 of the Act - whether termination of contracts unfair, harsh or unconscionable - whether compensation should be paid by principal contractor. CATCHWORDS: Held; decision of part time members of the Tribunal - unnecessary to determine preliminary jurisdictional issues - premiums or goodwill paid to enter yard - respondent was aware of practice of goodwill being paid - custom and practice established - applicants signed acknowledgement that the respondent did not require goodwill to be paid and that goodwill was not a custom and practice - both applicants were aware of and understood terms of acknowledgement - assigned contracts contained provision for no compensation - both applicants were aware of and understood contract terms - major contract for five years until October 2006 - contracts not renewed - offers of alternative work should have been investigated - jurisdictional hurdle in s 346(1)(e) not overcome - terminations of contracts not harsh, unfair or unconscionable - applications for compensation dismissed. LEGISLATION CITED: Industrial Relations Act 1996 BP Refinary (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Galea v Amatek (1996) 86 IR 455 CASES CITED: Monier Roofing Pty Ltd v Quintrell (1997) 78 IR 38 Rumsey v R Clifford & Son Holdings Pty Ltd (1996) 68 IR 75 Transport Industry - Redundancy (State) Contract Determination [2007] NSWIRComm 183 Truckbug Pty Ltd v Blue Circle Southern Cement Ltd [2001] NSWIRComm 88 HEARING DATES: 27 August 2007; 28 August 2007; 29 August 2007 DATE OF JUDGMENT: 30 November 2007 APPLICANT Mr A Hatcher of counsel Assisted by: Mr O Fagir Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Mr T Saunders of counsel Solicitor: Ms P Tumpey Hunt & Hunt Lawyers JUDGMENT: - 51 - CONTRACT OF CARRIAGE TRIBUNAL CORAM: SAMS, DP MACKEN, DR. J TINNEY, MR G 30 November, 2007 Matter No IRC07/64 Transport Workers' Union of New South Wales (on behalf of S & L Bozinovski Pty Ltd) and Glen Cameron Nominees Pty Ltd Notification by Transport Workers' Union of New South Wales on behalf of its member S & L Bozinovski Pty Ltd for a claim for compensation pursuant to section 348(2) of the Industrial Relations Act 1996 Matter No IRC07/65 Transport Workers' Union of New South Wales (on behalf of MJW Transport Pty Ltd) and Glen Cameron Nominees Pty Ltd Notification by Transport Workers' Union of New South Wales on behalf of its member MJW Transport Pty Ltd for a claim for compensation pursuant to section 348(2) of the Industrial Relations Act 1996 DECISION OF THE TRIBUNAL [2007] NSWIRComm 286 1 Slagan (Steve) Bozinovski t/as S & L Bozinovski Pty Ltd and Matthew Wilson t/as MJW Transport Pty Ltd ('the applicants') were contract carriers engaged by Glen Cameron Nominees Pty Ltd ('the respondent') at its Chullora site. On 20 October 2006, the applicants' contracts of engagement were terminated by the respondent due to the loss of a major contract. Their letters of termination, expressed in identical terms, were as follows: We have been informed today that Paperlinx NSW will not be renewing our contract for transport services, effective October 20, 2006. Under clause 5.4(ii) of your contract we hereby give you the required notice period to terminate our Agreement. Due to the outcome of clause 5.4(ii) we have suffered a Fundamental Change in our business and therefore give you notice under clauses 5.3 and 5.4(i). Paperlinx have indicated that they will engage the current contractors to provide services direct to Paperlinx and will approach those contractors at the appropriate time. In the event that there are not enough positions contracting direct to Paperlinx, Cameron's will interview any contractors who may wish to contract to our general fleet. Positions will be subject to the availability of work and the suitability of the vehicle specification. We appreciate your efforts over the duration of the contract and trust that those efforts will continue until the termination date. 2 On 19 January 2007, the Transport Workers' Union of New South Wales ('the Union') filed claims for compensation on behalf of the applicants pursuant to Pt 7 Ch 6 of the Industrial Relations Act 1996 ('the Act'). Both applicants seek monetary compensation on the grounds that the termination of their contracts of engagement were unfair, harsh and unconscionable within the meaning of s 349(1) of the Act. Pursuant to s 348 of the Act, the parties came before Sams DP on two occasions for conciliation. Conciliation proved unsuccessful and the Contract of Carriage Tribunal was constituted, pursuant to s 347, to hear and determine the claims according to the requirements set out in s 346 and s 349 of the Act, which we set out hereunder: 346 Claim for compensation (1) A carrier whose head contract of carriage is terminated by a principal contractor may claim compensation from the principal contractor if: (a) the carrier entered into the head contract of carriage by arrangement with a previous carrier whose provision of services to the principal contractor under contracts of carriage was replaced by the carrier, and (b) under the terms of the arrangement between the previous carrier and the carrier, a sum of money was paid by the carrier to the previous carrier as a premium or fee in connection with the entry into the head contract of carriage by the carrier, and (c) it is a custom and practice in the relevant section of the industry or business of the principal contractor that such a premium or fee be paid, and (d) the principal contractor knew or ought reasonably to have known that such a premium or fee had been paid to the previous carrier, and (e) the principal contractor failed to take reasonable steps to advise the carrier that it was not a requirement of the principal contractor that such a payment be made or requested. (2) A carrier is not prohibited from making a claim under this section because the carrier performs minor or incidental work for a person other than the principal contractor under the head contract of carriage. 349 Arbitration of claim (1) The Tribunal may determine that compensation is payable in relation to a claim only if it is satisfied that the termination of the head contract of carriage concerned was unfair, harsh or unconscionable. (2) The Tribunal may direct that any person (including, but not limited to, a previous principal contractor) who or which is not a party to a claim notified to the Industrial Registrar under section 348 (1), is to be a party to the arbitration proceedings. (3) Subject to subsection (4), the Tribunal may order that a carrier, previous carrier, principal contractor or previous principal contractor joined as such a party is liable to pay solely, or jointly with another party or parties, compensation under this Part. (4) In determining whether or not compensation is payable and, if so, the amount of compensation, the Tribunal is to have regard to the following matters: (a) the amount of the premium or fee paid by the carrier as referred to in section 346, (b) any amount paid to the carrier by the principal contractor (including but not limited to redundancy payments) in respect of the termination of the head contract of carriage, whether or not such payment was made expressly on account of the payment of that premium or fee, (c) the duration of the head contract of carriage, (d) the likelihood of the carrier being able to use the motor vehicle required by the head contract of carriage for other types of work, and the availability of any such work, (e) the re-sale value of the motor vehicle, (f) the preparedness of the principal contractor to guarantee a flow of work to the carrier for a specified period in the future. (5) If the Tribunal determines that compensation is payable by more than one party, the Tribunal is to determine the respective proportions of the total sum to be paid by each. (6) Quantification of any compensation is to be approached as though in a claim for damages for breach of contract and compensation is payable only in respect of pecuniary loss resulting from termination of the head contract of carriage. Without limiting the amount of compensation that may be determined to be payable, compensation may include the whole or a part of the amount of premium or fee paid by the carrier. (7) A claim for compensation may not be dealt with by the Tribunal if the claim (however described) is the subject of an application before, or has been determined by, any court or other tribunal. (8) The Tribunal must not make a determination under this Part if the determination has the effect of altering or varying a contract agreement or a contract determination. 3 The respondent has raised three preliminary jurisdictional issues in answer to the applicants' claims as follows: a) there were no head contracts of carriage between the respondent and either of the applicants; b) the applicants were not 'carriers' for the purposes of s 346(1) of the Act; and c) the respondent was not a principal contractor in relation to the applicants. We shall later return to outline the submissions of the respondent on these jurisdictional issues. 4 For the purposes of the hearing, the applications were joined and it was agreed that the evidence in one was to be treated as evidence in the other. Documentary Evidence 5 In view of the significant reliance placed by the respondent on various documents signed by the applicants we intend, at the outset, to identify the relevant material or extracts there from. 6 A standard contractor assignment agreement was required to be signed by the respondent, the driver selling his truck and the driver purchasing the truck. It is expressed as follows: PARTY 1) GLEN CAMERON NOMINEES PTY LTD ACN 005 350 860 / ABN 54 576 366 297 and PARTY 2) ASSIGNOR and PARTY 3) ASSIGNEE This Agreement serves to formalise an Agreement between Parties 2) and 3) listed above, as a result of Party 2) negotiating with Party 3) the Assignment of it's existing Contractor Agreement with Party 1). Party 1)'s inclusion in this Agreement is for the purpose of approving this Assignment, in accordance with Clause 8.2 of the existing Contractor Agreement. I (sic) executing this Agreement, Party 2) has all rights within the existing Contractor Agreement voided, with the rights and obligations within the latter Agreement being transferred to Party 3). Both Party 2) and Party 3) recognise and fully understand their rights and obligations in relation to this Assignment, as detailed in Scott Carson's Information Package dated 4 August, 2003, with Scott Carson, acting for Party 1). The completed "Acknowledgment Form" is attached as part of this Agreement and is to be signed by Party 3). 7 The acknowledgement form referred to in the last paragraph above was a separate document and was expressed in the following terms: I understand that I will be required to execute a Driver Agreement with Camerons in order to access work with them. This Driver Agreement has been provided to me for consideration. Camerons will consider my suitability to provide driver services and may permit me to enter into a Driver Agreement if I satisfy their requirements as set out in the Driver Agreement. It has been explained to me by Camerons and I understand that Camerons does not require a premium or fee to be requested or paid in order to enter into a Driver Agreement with them and there is no custom and practice within Camerons that premiums or fees be paid to access work under a Driver Agreement. 8 The standard drivers' or contractor agreement contains the following relevant provisions: The term of the agreement is found at Clause 4. The commencement date referred to is 1 October 2001. Subject to earlier termination under clause 5, this Agreement shall commence on the Commencement Date defined in Schedule 1 ("the Commencement Date") and continue in force for a period of five (5) years unless terminated by either party in accordance with the provisions of this Agreement. At least three months prior to expiration of this Term, Camerons will advise the Contractor if a new Agreement is to be offered to the Contractor. 9 Clause 5 deals with the termination of the contract. Relevantly Clause 5.3 provides: [5.3] Either party may terminate this Agreement without notice before the end of the Term if a Fundamental Change occurs in the business of either party such as would prevent it from completing the Agreement. 'Fundamental change' is defined as: means a change in the circumstances of one of the Parties, however caused, which results in the Party not being able to fulfill its obligations under this Agreement. 10 The following provisions deal with termination of the contract with notice: (i) Except for the circumstances listed in part (ii) of this clause, either party may terminate this Agreement before the end of the Term for any reason upon the expiration of the required period of notice in writing to the other party. The required period of notice shall be one month. No compensation will be payable in these circumstances. (ii) If a contract between Camerons and a Camerons' customer is terminated for any reason before the end of the Term, this Agreement will terminate. The period of notice provided to Camerons by the Camerons' customer, less one working day, will be the amount of notice provided by Camerons to the Contractor. No compensation will be payable in these circumstances. (iii) If either party terminates this Agreement in accordance with Clause 5.4(i) above, during this notice period, the Contractor shall train a new driver in all Camerons and Camerons' customer processes associated with the delivery of the Services, if required to do so by Camerons. 11 Clause 6 provides that no compensation is payable on termination of the contract: CONSEQUENCES OF TERMINATION 6.1 Upon lawful termination or expiration of this Agreement, the Contractor shall: (a) not be entitled to any compensation or damages; (b) return any equipment supplied by Camerons in good order; (c) provide to Camerons all money collected for and documents issued on behalf of Camerons by the Contractor; (d) return all property, including keys and access passes, which may then be or ought to be in the Contractor's control or possession; (e) ensure that all signage and imaging required by Camerons and Camerons' customers in accordance with clause 2.1(g) is removed; (f) supply all final invoices detailing any and all payments due to the Contractor from Camerons within 7 days of termination. 12 Clause 8 deals with the assignment of the contract from one driver to another: ASSIGNMENT 8.1 During the term of this Agreement, the Contractor shall not assign, subcontract, transfer, mortgage, charge or encumber all or any part of its rights, benefits or obligations under this Agreement, without the prior written permission of Camerons. 8.2 The proposed assignee ("the Assignee") must be approved by Camerons and Camerons may at its discretion require a trial period of fourteen days before its determination as to whether to grant written permission for the assignment of this Agreement, such permission shall not be unreasonably withheld. 8.3 The Contractor is responsible for professional training of the Assignee in all Camerons and Camerons' customer processes wherever such assignment occurs. The Assignee must be suitably qualified. Brief chronology of events 13 The respondent is a transport company operating in Sydney, Melbourne and Brisbane and engages both contract and employee drivers at a number of depots. On 1 October 2001, the respondent entered into a five year contract with Paperlinx delivering paper in the Sydney area. At that time, the respondent entered into contractual arrangements to engage the 18 to 20 drivers who had been previously employed directly by Paperlinx. Both applicants commenced working for the respondent during the life of the contract between the respondent and Paperlinx - Mr Bozinovski in February 2002 and Mr Wilson in August 2003. 14 In January 2002, Mr Bozinovski responded to a newspaper advertisement for the sale of a truck and business owned by Mr Andrew Kulibab, for an amount of $130,000. The truck was a 1996, 5.6 tonne, Hino table top worth about $50,000. On 10 February 2002, Mr Bozinovski paid Mr Kulibab a 10% deposit. He met with Mr Scott Carson, the respondent's Transport Manager on 18 February 2002. Minutes of this meeting signed by Mr Bozinovski indicate that: · SC (Scott Carson) tabled and explained the statement required to be signed by Steve acknowledging that no premium or goodwill factor should be included in the private, commercial transaction covering the Truck Sale. · SC presented Steve with a copy of the standard incorporated Driver Agreement, it was agreed to supply Steve with a copy of the standard unincorporated Driver Agreement. · SC advised Steve to seek independent legal and / or accounting advice in relation to the Driver Agreement assignment being offered by A & E Kulibab. 15 Mr Bozinovski commenced training on 19 February 2002 and paid Mr Kulibab the balance of the sale price on 26 February. The acknowledgement form referred to in the minutes is shown as being signed on 26 February 2002 and witnessed by another driver, Mr Vella. Mr Bozinovski signed the driver agreement on 4 March 2002 and he commenced work for the respondent the next day. 16 In early 2003 Mr Wilson had discussions with Mr Graham Aldcroft, a contract driver engaged by the respondent, concerning the purchase of his business. Both of them met with Mr Scott Carson in early August 2003. Mr Wilson arranged finance to purchase the truck and business from Mr Aldcroft for $100,000. He insured the truck on 22 August 2003 for $45,000. From 11 August 2003, Mr Wilson underwent training for two weeks. On 18 August Mr Wilson signed the standard acknowledgement form. A Contractor Assignment Agreement was signed by Mr Wilson on 18 August (although he claimed he had backdated it from 25 August). 17 On 20 September 2006, Paperlinx informed the owner drivers that the company would not be renewing its contract with the respondent and invited the drivers to apply for work with it. All of them did so. However, on 10 October 2006 both Mr Wilson and Mr Bozinovski (and two others) were advised that their applications had been unsuccessful. No termination payments were made by the respondent to either Mr Wilson or Mr Bozinovski. 18 The claims in these proceedings are for the loss of goodwill in the amounts of $55,000 for Mr Wilson and $70,000 for Mr Bozinovski. THE EVIDENCE 19 We turn now to the evidence adduced in the proceedings. 20 Mr Matthew Wilson deposed that when he discussed purchasing Mr Aldcroft's business, he had told him that the last two trucks sold in the yard had been for $100,000. Mr Wilson offered Mr Aldcroft this amount in July 2003 after reviewing the last three years of Mr Aldcroft's earnings with the respondent. 21 Mr Wilson said that in a meeting with Mr Carson and Mr Aldcroft around 4 August 2003, Mr Carson had assured him that the work was secure and that Paperlinx was very happy (with the contract) and had given every indication the relationship would be long term. He said he was also assured that the respondent would always utilise a contractor fleet, and as the workforce was ageing, he expected a renewal of the workforce in the next 12 months. At this meeting they had also discussed uniforms, start times, induction and training. With these assurances, Mr Wilson said that he had felt confident in buying the contract and, although it only had two years to run, he expected it to continue for many years to come. He added that it wouldn't have made sense to pay all that money for a couple of years work. 22 Mr Wilson deposed that at this meeting Mr Carson had raised the issue of goodwill. Mr Carson had said that he didn't want to know the price of the purchase, but that he (Mr Wilson) should know that a premium wasn't a requirement of the respondent. When Mr Wilson replied that he'd just go out and buy a truck in that case, Mr Carson said that he must buy Mr Aldcroft's truck, as Paperlinx was very happy with the existing fleet configuration. Mr Wilson deposed that Mr Aldcroft appeared unhappy at that point in the meeting, as it appeared momentarily he might lose the $55,000 of goodwill. 23 Mr Wilson financed the purchase by two loans - one from Esanda of $45,000 for the truck and a business loan of $55,000 from ANZ. As Mr Aldcroft owed $30,955.61 to AMP for the truck, Mr Wilson transferred this amount to AMP and the balance to Mr Aldcroft's bank account. 24 Around 18 August 2003, Mr Carson called Mr Wilson and told him he would have to preload overnight if he wanted to work in the yard. As a result, Mr Wilson purchased a car for $3,000 and was paid an extra four hours per week for preloading. 25 Mr Wilson said he first became aware of two company documents concerning "prospective purchases" and "procedures for the sale of a truck" after the commencement of these proceedings. Both documents were issued in March 2002 and were designed to recognise the acknowledgement that the respondent did not require a premium to be paid. The procedures document was expressed as follows: 1) Contractor commences private negotiations with interested party ("Buyer") ensuring that the buyer is immediately made aware that Camerons does not require a premium or fee to be paid in order to enter a Driver Agreement to either Camerons or the Contractor and in fact, insists that such a fee, often referred to as "Goodwill", is specifically excluded from the Truck Sale and Driver Agreement Assignment negotiations from the outset. 2) Contractor advises Camerons Contract Manager ("Contract Manager") of likelihood of possible Truck Sale and Assignment of Driver Agreement. 3) Contractor to ensure that the potential Buyer / Buyer's Drivers, holds the appropriate Truck Licence, is well presented, has recent relevant driving experience, is fully aware of their obligations under the Driver Agreement and has prepared a brief resume that includes at least the names of two character references, with at least one of these references being willing to attest to the Buyer's / Buyer's drivers, abilities, attitude and experience as a driver. 4) Contractor negotiates meeting time for attendance by potential Buyer, the Contractor and the Contract Manager and if available, a Fleet Scheduler, in order to further assess the buyer's interest and for the Contract Manager to give the Buyer a briefing on Camerons and the Paperlinx Contract, current industry conditions and advise the Buyer to obtain professional advise (sic) in relation to the requirements of the Driver Agreement. Key points of the Driver Agreement will also be highlighted at this time. 5) Contract Manager then assesses the Buyer's situation, checks references and reverts back to the Contractor with feedback. If positive, Contract Manager approves further negotiations, if negative, Contract Manager advises Contractor with detailed and relevant reasons as to why the application is rejected. 6) Assuming positive response to item 5), Contractor then privately negotiates further with the Buyer and if the Buyer expresses firm commitment, then asks the Buyer to write an "Expression of Commitment" to the purchase, addressed to the Contract Manager. 7) Contractor to then commence 14 trial / training period personally with Buyer, immediately after which the Buyer will be expected to be fully conversant with all Operational and Legal / Licensing responsibilities required to operate self sufficiently within the Fleet and fulfill looming obligations under the Driver Agreement. 8) Contractor and the Fleet Schedulers to review the results of the trial / training period and revert back to the Contractor with any issues requiring attention. 9) Assuming the success of items 7) and 8), Contract Manager then, upon request from the Contractor, issues a copy of the Driver Agreement and a standard "Acknowledgment Form" in relation to "no premium, fee or goodwill" (see copy attached) to the Buyer, with both documents required to be fully completed and signed before the Buyer commences providing services to Camerons, with these completed documents to be provided to the Contract Manager. 26 Mr Wilson said that in his case the procedures had not been followed in that the acknowledgement form was not provided at the initial meeting with management. 27 Mr Wilson said that when he attended the meeting with Paperlinx on 20 September 2006, Mr Shannon van Melde, Operations Manager, had told the drivers that Paperlinx would take some, but not all the drivers on a new contract. Mr van Melde had also said that any drivers not taken on by Paperlinx would be "looked after by Camerons". Mr Wilson said that the respondent did not consult with the drivers or discuss with them the effect of losing the contract. He finished working for the respondent on 20 October 2006. 28 Mr Wilson has since worked with Lodehaul, Cobb & Co and Fine Wines as a contract carrier earning about $750 per week. 29 In a reply statement, Mr Wilson said that he may have received the acknowledgement form from Mr Aldcroft, not from Mr Carson. He had signed the form and handed it in on 25 August 2003, when he commenced paid work, but had backdated it to the 18 August. He could give no explanation why he did so. 30 Mr Wilson said that he was unaware of the arrangements between the respondent and Paperlinx, as Paperlinx was particularly protective about the details of the contract. 31 Mr Wilson recorded the details of a conversation he had with Mr Cameron when he learnt that he was unsuccessful in his application to Paperlinx. Mr Cameron had offered him work as a company driver on a contract with Amcor, but Mr Wilson wasn't in a position, financially, to accept. In addition, Mr Wilson said he didn't trust the respondent and he decided to seek work elsewhere. 32 In cross-examination, Mr Wilson agreed that Mr Aldcroft had given him a copy of his own contract with the respondent in July 2003. He understood that the contract was for five years from October 2001 and that there was no assurance it would be renewed. He understood further that either party could terminate the contract on one month's notice and that the respondent could terminate the contract due to a 'fundamental change'. They had in fact discussed this at the meeting with Mr Carson. 33 Mr Wilson also understood that Mr Aldcroft couldn't assign his contract without the respondent's approval. He knew that Mr Aldcroft had only been with the respondent since 2001, having been earlier employed by Paperlinx for some 15 years. Mr Wilson understood from Mr Aldcroft that when he had joined the respondent he had been offered to be engaged as a contractor or an employee. All the drivers had come over as contractors without paying any goodwill. 34 Mr Wilson said he had not been provided with a document setting out the procedure for the assignment of a truck. Mr Aldcroft had given him an acknowledgement form after he had started training and had left his previous job. He had started paid work on 25 August 2003, the same day he had signed the acknowledgement form. He hadn't signed it on the 18 August because Mr Aldcroft had signed it on the 22 August and handed it back to him. 35 Mr Wilson deposed that in his meeting with Mr Carson there had been no mention of an expiry date of the Paperlinx contract. Rather, Mr Carson had said that Paperlinx was very happy with the arrangement, expected it to continue and would be looking to build its business in Sydney. Mr Wilson said he had an expectation the contract would continue after October 2006. 36 Mr Wilson was closely questioned on when he had signed the acknowledgment form. He denied signing it on 18 August 2003, but agreed he understood its terms as to "no custom and practice of goodwill at the yard". However, he believed it was just a procedure. Mr Wilson acknowledged that Mr Carson had earlier said that the respondent did not require a premium to be paid but he hadn't used the words "custom and practice". Mr Wilson said that he didn't really know what the respondent did or didn't do, but he conceded he understood the respondent didn't require a premium to be paid. 37 Mr Wilson agreed that he had obtained legal and accounting advice prior to the purchase and had taken Mr Aldcroft's contract to a solicitor. He had arranged finance with the bank on 19 or 20 August 2003, and obtained insurance for the vehicle on 22 August. He again denied signing the agreement with the respondent on 18 August. The first payment to Mr Aldcroft was 27 August and the balance was paid on 21 September 2003. 38 As to the meeting at which the drivers were told the respondent had lost the Paperlinx contract, Mr Wilson agreed that Mr Cameron had said it wasn't a reflection on the company or the drivers. Paperlinx wanted to in-source the work. Mr Cameron had said the respondent was very disappointed. Mr Wilson further agreed that Mr Cameron had said that if any driver missed out with Paperlinx they should give him a call and he would see what they could do. Mr Cameron had also said he expected all the drivers to fulfil their contracts to 22 October 2006. Mr Wilson denied rejecting Mr Cameron's offer to work as an employee driver. He simply hadn't responded to it as he wasn't in a financial position to do so. 39 Mr Wilson agreed that the respondent had paid to have his truck repainted when his contract ended and arranged for a week's work for him while this was done. 40 In re-examination, Mr Wilson said that in the meeting with Mr Carson he had asked him about the 'fundamental change' clause in the agreement and the provision concerning reconfiguring the fleet. Mr Carson had assured him that Paperlinx was very happy with the fleet configuration, and he didn't see any change in the foreseeable future. 41 Mr Wilson confirmed that there was no other way of entering the yard than by paying a fee or premium to an exiting driver. 42 Mr Steve Bozinovski is presently an employee driver with Loumbos Wastepaper Sales & Services. Mr Bozinovski said that when he bought into the yard in February 2003, Mr Kulibab had told him that he bought his truck four years earlier from a Mr Vella for $125,000. Mr Kulibab had told him that the only way to get into the yard was to buy a run for goodwill. He later visited the yard and other drivers had told him the same thing. Some of the drivers had been there for 15 years. Mr Bozinovski believed, as a result of these conversations, that it was the practice in the yard to pay goodwill, and only four of the longest serving drivers hadn't payed goodwill to get in. 43 Mr Bozinovski said that Mr Kulibab had spoken to Mr Carson and he had approved him purchasing Mr Kulibab's truck. Mr Bozinovski had paid a 10% deposit to Mr Kulibab before meeting Mr Carson because he believed he had already been approved and the meeting was only a formality. Mr Bozinovski met with Mr Carson around 15 February 2002, and Mr Carson told him that he needed to be trained. He said that Paperlinx was "very happy with us" (Camerons) and there was no reason why they wouldn't keep doing Paperlinx work for many years to come. Mr Bozinovski believed the work sounded secure and the contract would be ongoing. He said he wouldn't have paid all that money if he thought the contract would end after its nominal term. 44 Mr Bozinovski said that during the meeting on 15 February 2002, Mr Carson had asked Mr Kulibab how much he was selling for. When Mr Kulibab told him, Mr Carson replied "that's between the two of you, its not my business". Despite signing the minutes of the meeting, Mr Bozinovski said he had no recollection of Mr Carson explaining to him that no premium should be paid in the transaction. 45 After commencing training on 19 February 2002, Mr Bozinovski said that on 26 February Mr Carson gave him the acknowledgement form which stated the Company didn't recognise goodwill. Mr Carson didn't suggest he obtain legal or other advice and he just signed it on the spot. He claimed he was uncertain about it, but he had already arranged finance, paid a deposit and needed to start work. He commenced on 5 March. Mr Bozinovski said that after he started work, other drivers had asked him if he knew of anyone who wanted to buy in. His brother-in-law paid $100,000 for Mr Charlie Xiberras truck and business. Mr Wilson and Mr Craig Carter had also bought into the yard for around $100,000. 46 Mr Bozinovski said that some time in 2003, Mr Carson asked him to put a tautliner on his truck in order to preload. This had cost $3,000. Mr Bozinovski said that he was forced to buy a car for $5,000 and the respondent paid one hour per day extra for preloading. 47 Mr Bozinovski recorded the circumstances when the respondent lost the Paperlinx contract. Mr Bozinovski did not secure work with Paperlinx and did not secure work for a couple of weeks until joining Loumbos on 16 November 2006. He sold the truck for $15,000 and still owes the bank almost $100,000. He said he had earned around $1,200 per week nett after costs with the respondent and he now earns an average$920 per week. 48 In a statement in reply Mr Bozinovski said he did not sign the acknowledgement form on 18 February 2002, but on 26 February. 49 In response to Mr Cameron's statement about offering work to the displaced drivers, Mr Bozinovski said the offer was not specific; there was no explanation of what the work would be, nor the rates. In any case, Mr Bozinovski was aware there wasn't much work at Villawood and the drivers there were on lower rates. 50 In cross-examination, Mr Bozinovski said he first saw Mr Kulibab's contract with the respondent when he met Mr Carson on 18 February 2002. However, Mr Bozinovski had asked Mr Kulibab earlier about the terms of the contract and that they had only discussed termination of the contract where the driver may have "done the wrong thing". Mr Kulibab had told him the contract had been renewed over 20 years and that he had joined the respondent when Paperlinx commenced in 2001. He didn't tell him that, at the time, he was offered either to be a contractor or an employee driver. He had told him he had paid goodwill four years earlier when he (Mr Kulibab) had bought the truck from Mr Paul Vella. 51 Mr Bozinovski couldn't recall exactly when Mr Carson had given him the acknowledgement form, but he believed it was in the second week of his training. He said he hadn't seen a copy before this time. 52 Mr Bozinovski said he had accepted Mr Kulibab's estimate of the truck value of $50,00 and had paid a 10% deposit on 10 February 2002, after being assured by Mr Kulibab that Mr Carson had approved the sale. Mr Bozinovski accepted he hadn't spoken to anyone in management before paying the deposit. 53 Mr Bozinovski agreed he had met Mr Carson with Mr Kulibab and Mr Matt Steel, also from the respondent, on 18 February 2002, and the purpose of the meeting was to determine if he was a suitable person to take over Mr Kulibab's run. 54 After Mr Carson spoke to all of Mr Bozinovski's referees, he was told that he was approved as a purchaser of the truck. Mr Bozinovski said he would become incorporated and would have all the necessary insurances and registration in place by 31 March 2002. 55 Mr Carson had given him a driver's agreement and advised him to seek independent legal and accounting advice. Mr Bozinovski saw his accountant with Mr Kulibab's last three years financial accounts, but did not seek legal advice. Mr Bozinovski recalled that Mr Carson spoke about the good relationship with Paperlinx and why he expected the contract to continue. 56 Mr Bozinovski could not remember if Mr Carson had a copy of the acknowledgement form at the meeting. He found out about it from the other drivers after the meeting. When pressed in cross-examination, he thought he may have received it on the same day as the meeting and Mr Carson had said to him that he had to sign the form to confirm he understood no goodwill should be included in the sale. 57 Mr Bozinovski said he thought he had received the minutes of the meeting shortly after he started his training. Mr Bozinovski couldn't say why he used the words "appeared to be his signature" (on the minutes) in his statement. The minutes do not record reference to an exchange about the sale price. However, Mr Bozinovski insisted the discussion had occurred. 58 Mr Bozinovski said he had signed the acknowledgement form on 26 February 2002 with Mr Vella as a witness. Mr Vella had told him he had to sign it or he would not be starting in the yard. He had read it and understood it, but felt he had to sign it or he wouldn't be working. At the time he signed it, he understood that the company had said there was no custom and practice of premiums being paid in the yard. 59 Mr Bozinovski was shown the contract he had signed which disclosed a contract term of five years commencing in October 2001. He agreed he had read and understood the provision relating to a 'fundamental change' which might terminate the contract. He had read and understood no compensation would be paid for the contract's termination on one month's notice. 60 Mr Bozinovski agreed that at the meeting on 20 October 2006 announcing the termination of the Paperlinx contract, Mr Cameron had said that: · Paperlinx's decision was not a reflection on anyone's performance; · Paperlinx wished to in-source its work; · he was very disappointed; · he would be pleased to meet with any displaced drivers with a view to offering ongoing work with Camerons; and · he appreciated the drivers' efforts and hoped they would maintain the standard to the end. 61 Mr Bozinovski acknowledged that when he was refused work with Paperlinx he did not make any contact with the respondent about alternative work. 62 Mr Bozinvoski could not give details of his actual earnings with the respondent as it varied from week to week according to various costs. 63 In re-examination, Mr Bozinovski said he did not know at the time he signed the acknowledgement form that he could get work with the respondent without paying a premium. 64 Mr John Johnston is an owner driver engaged under a contract with Paperlinx Merchant Logistics. He has 18 years' experience in the transport industry and was engaged by Paperlinx prior to 2001 and subsequently by the respondent when it won the contract in 2001. In order to maintain good customer relationships between Paperlinx and the drivers, all the then drivers had been offered contracts with the respondent using their own trucks or alternatively employed as company drivers. During the negotiations in 2001 the drivers established a negotiating committee and engaged the services of an industrial relations consultant. 65 Mr Johnston said that one of the issues discussed at the time was recognition of goodwill. He said that while he hadn't paid goodwill (because he had been in the yard from the beginning), all of the drivers who later came into the yard paid goodwill, including four or five drivers who came in after the respondent took over the contract. He had in fact sold his truck and business for $110,000 to Mr Craig Carter in 2003. Mr Johnston said the prices for such sales were well known in the yard as the drivers were always interested to know what they would get for their trucks. 66 Mr Johnston deposed that during the 2001 negotiations, agreement was eventually reached with the respondent for a clause (cl 8) allowing assignment of contracts, subject to company approval. The terms of that clause were: During the term of this Agreement, the Contractor shall not assign, subcontract, transfer, mortgage, charge or encumber all or any part of its rights, benefits or obligations under this Agreement, nor transfer ownership of the Delivery Vehicle, without the prior written permission of Cameron's. 67 In cross-examination, Mr Johnston was asked if a copy of the acknowledgement form had been left in his pigeonhole in early 2002. He claimed he couldn't remember and wasn't sure if such a document was required to be signed by new drivers entering the yard. However, Mr Johnston said that he had received a memorandum from the respondent in March 2002 and understood that it did not require a premium or fee to enter the yard. 68 Mr Johnston remembered the meeting with Paperlinx in September 2006 when the drivers were advised to apply for positions back with the company. Mr Johnston had applied and had been successful with a further five year contract. He agreed Mr Cameron had said at the meeting that unsuccessful drivers should talk to him about alternative work with Camerons. 69 As a member of the Driver Committee, Mr Johnston recalled a meeting in August / September 2006 when Mr Cameron had said that the Paperlinx contract was due to expire and that the parties were negotiating a renewal, but the outcome was unknown. 70 In re-examination, Mr Johnston said that he could think of no other way a driver could enter the yard during the Paperlinx contract without paying a fee or premium. 71 Mr Paul Vella commenced driving in the paper industry in 1990 with Dalton Fine Paper. He bought a truck and work for $55,000, $21,000 of which represented goodwill. The company was bought by Amcor and it eventually merged its warehousing operations into the company Paperlinx. 72 Mr Vella said there was no formal contract when he started work, but he later signed contracts in 1994 and 1997. He gave similar evidence to Mr Johnston as to what occurred in 2001. He said that at the time, goodwill had always been paid to get into the yard and the drivers wanted to protect it if they sold during the respondent's contract. All drivers who bought in after the respondent's contract had paid goodwill. Everyone knew how much drivers were paying as the drivers always talked about it. 73 Mr Vella referred to the 2006 negotiations with the respondent. The drivers assumed they would continue to work under the existing contract. Mr Vella secured a position back with Paperlinx in 2006 with a six tonne truck which is now 10 years old. 74 In oral evidence, Mr Vella deposed that Mr Carson had regularly mentioned that the respondent was not necessarily against the drivers selling their trucks with work, but it didn't want to get involved with price. 75 In cross-examination, Mr Vella agreed that he had not paid any goodwill when he started with the respondent. Mr Vella agreed that he had received the respondent's memorandum or a version of it in early 2002, but could not recall the acknowledgment form. Mr Vella was shown Mr Bozinovski's signed form which he had witnessed. He said that Mr Bozinovski had signed it because otherwise he wouldn't get a job in the yard. 76 Mr Ken Smith started work with Paperlinx in 1994 when he paid $75,000 for a truck and work. The truck was worth about $35,000. 77 Mr Smith gave similar evidence to Mr Johnston concerning the move to the respondent in 2001. At the time, he said, the respondent did not want to recognise goodwill and while the issue wasn't completely resolved the drivers maintained the right to assign their contracts, subject to approval, and there was no specific prohibition on goodwill. In any event, the practice in the yard after 2001 was that any new driver paid goodwill. It was a matter of interest to the drivers and common knowledge of the amounts which were paid. 78 In cross-examination, Mr Smith said that he had received and read the memorandum from the respondent in March 2002, and recalled seeing the acknowledgment form. 79 Mr Smith referred to the meeting in October 2006 when the drivers were invited to apply for work back at Paperlinx. He had done so and was successful. He now owns a 1991, five tonne truck. 80 Mr Greg Selig is the Union Organiser responsible for the owner drivers previously engaged by the respondent. Mr Selig gave evidence concerning a dispute with the respondent in 2004 over a reduction in work being offered by Paperlinx. The respondent had attempted to force two or three drivers to move permanently to its Villawood depot. The dispute resulted in a rotating of Paperlinx drivers to Villawood. However, Mr Selig understood that there was very little work at Villawood and drivers would often be instructed not to come in at all. Mr Selig believed that there was no indication that the respondent could offer viable work to the displaced Paperlinx drivers. 81 Mr Selig said that throughout his numerous discussions with the respondent's management over a variety of topics, no mention of the contract's expiry had been made until late in 2006. Further, Mr Selig said he and the drivers were not privy to the contractual terms between the respondent and Paperlinx. 82 In response to Mr Camerons' evidence, Mr Selig said it was his impression that the offer of alternative work for displaced drivers was a token gesture made without any reference to the nature of the work or the rates to be paid. 83 In cross-examination, Mr Selig recalled that Mr Cameron had mentioned in meetings in August / September 2006 that the respondent was negotiating a renewal of the contract with Paperlinx and that the outcome was unknown. Mr Selig agreed that in the meeting on 20 September 2006, Mr Cameron had said : · he was very disappointed; · the drivers could apply to be engaged by Paperlinx; · that any driver unsuccessful in applying could talk to him about being engaged by the respondent on other work; and · he appreciated the work of the drivers. 84 Mr Selig conceded that he had not approached Mr Cameron or anyone else about alternative work for Mr Wilson and Mr Bozinovski. Respondent's Evidence 85 Mr Scott William Carson is currently a self-employed consultant in the transport and logistics industry with 20 years experience. From June 2001 to January 2004 he was employed by the respondent as the Transport Manager at the Chullora yard. This role included being responsible for managing and administering the contractual relationship with Paperlinx. Mr Carson was also responsible for negotiating the contractor agreements for the drivers who came across from Paperlinx to the respondent in 2001. It was his understanding that none of these contractor agreements provided for the payment of goodwill by the respondent or anyone else. 86 Mr Carson said that the acknowledgement form had been prepared in early February 2002 and in early March 2002 he had prepared a procedures document for the sale of a truck and assignment of a driver's agreement. Both documents were left in each driver's pigeonhole in March 2002. This was the normal practice for distributing information in the yard. Mr Carson deposed that in early 2002 when he became aware that Mr Kulibab was intending to sell his truck to Mr Bozinovski, he had placed the necessary documents in Mr Kulibab's pigeonhole. 87 On 18 February 2002, he met with Messrs Kulibab, Bozinovski, Steel and Frederico (an employee of Paperlinx). Minutes were prepared which were signed by those present. Mr Carson said that he had told Mr Bozinovski that he would have to sign the acknowledgement form confirming his understanding that no goodwill should be included in the purchase. At the same meeting he provided Mr Bozinovski with the standard contractor agreement. Mr Carson deposed that Mr Bozinovski handed him the signed acknowledgement form a few days later. On 4 March 2002 S & L Bozinovski Pty Ltd entered into a fixed term contractor agreement with the respondent. Mr Bozinovski had undertaken normal training prior to this time. 88 Mr Carson deposed that, at no time prior to the commencement of these proceedings was he aware of the negotiations for the agreement between Mr Bozinovski and Mr Kulibab of the price Mr Bozinovski paid for the truck. 89 Mr Carson said that in late July 2003, Mr Aldcroft had approached him about selling his truck to Mr Wilson. He told Mr Aldcroft that the procedures should be followed and that he would be happy to meet the new driver and assess his suitability. Mr Carson provided Mr Aldcroft with a copy of the procedures and Mr Aldcroft provided him with a number of documents from Mr Wilson. At the meeting with Mr Wilson, Mr Aldcroft and Mr Steel, Mr Carson said he told them "Guys, no goodwill factor should be included in these private commercial transactions covering the truck sale". Shortly after the meeting Mr Carson put the necessary documentation in Mr Aldcroft's pigeonhole and within a few days Mr Wilson handed them back. Mr Wilson undertook two weeks training before commencing work. 90 Mr Carson deposed that prior to the commencement of these proceedings, he had not known of the details of the negotiations and agreement between Mr Wilson and Mr Aldcroft and had not known the sale price of the truck. 91 Mr Carson responded to Mr Wilson's statement by deposing that in the first meeting with him he had said: Paperlinx are very happy with us. We hope to continue with Paperlinx in the long term, however, you need to know there is an expiry date to our agreement with Paperlinx. Any driver agreement you sign with us will also have a fixed expiry date. We cannot guarantee ongoing work past that expiry. 92 Mr Carson denied making any observations in relation to Mr Wilson's purchase of the truck. He had simply said "Camerons does not require goodwill to be paid and it should not be paid". 93 In reply to Mr Bozinovski's statement, Mr Carson said it had not been his practice to approve a contract driver instantaneously. He confirmed that he had no knowledge of the transaction between Mr Kulibab and Mr Bozinovski. Mr Carson denied making any representations about the respondent's Paperlinx contract or giving any guarantees to Mr Bozinovski about ongoing work. Mr Carson said he had placed the necessary documents in Mr Kulibab's pigeonhole in early February 2002 and that Mr Bozinovski returned the acknowledgement form at the meeting on 18 February 2002. 94 In reply to Mr Vella's statement, Mr Carson reiterated that as the Transport Manager at the Chullora yard, he did not know the price contract drivers were paying for their trucks. 95 In cross-examination, Mr Carson said that when he commenced employment with the respondent, the Company had just won the contract for Paperlinx in Sydney. It already had a similar contract in Melbourne. Mr Carson said he had never been privy to the detail of these contracts. Nevertheless, Mr Carson agreed that he had been a party to discussions with the drivers when they moved from Paperlinx to the respondent in 2001. He insisted that the drivers had not put that they wanted the system of goodwill to continue at Camerons. At this time, he took the view that goodwill was irrelevant considering the long term nature of the proposed agreement. Mr Carson conceded that he had not replied to Mr Johnston's affidavit in which he had said that the drivers wanted to ensure that goodwill was recognised. He later accepted that the drivers did raise the issue in the initial negotiations. However, Mr Carson denied that cl 8 of the agreement resolved the issue of goodwill in the negotiations. He accepted that cl 8 was about the assignment of one driver's rights under the contract to another. 96 Mr Carson said that the documents he had prepared in 2002 were introduced later to clarify the procedures involved in assigning contracts and had been prepared following a request from the drivers themselves. They were issued and accepted. He agreed they were not negotiated. Mr Carson said that the wording in the acknowledgement form had been proposed by the respondent's legal advisers. 97 Mr Carson accepted that at the time Mr Bozinovski entered the yard the procedures document had not existed. Mr Carson was referred to the minutes of the meeting with Mr Bozinovski on 18 February 2002. He accepted that the minutes do not record that the respondent's position on custom and practice as to goodwill had been explained to him. However, Mr Bozinovski could not get into the yard without signing the acknowledgement form which had indicated that the custom and practice as to goodwill had been explained to him. Mr Carson conceded that it hadn't been explained to him. 98 Mr Carson denied saying at the meeting that there was no reason why they (the respondent) wouldn't be doing Paperlinx work for many years. He also denied asking Mr Kulibab how much he was selling his truck for. He had said that the Paperlinx contract had an expiry date, although the minutes don't record this statement. 99 Mr Carson deposed that he did explain to Mr Bozinovski that the respondent did not require a fee or premium to be paid. He conceded that the acknowledgement form was concerned with drivers entering into a driver contract, not directly with the sale of a truck. Mr Carson said that he believed he gave Mr Bozinovski the acknowledgement form on or around 26 February 2002, and he signed it and gave it back on the same day. 100 Mr Carson denied making an agreement with Mr Kulibab that he could sell his truck for whatever price, so long as he did not make a claim for an injury he had earlier suffered. He further denied any conversation with Mr Frederico about Mr Kulibab's injury. 101 Mr Carson was questioned about Mr Wilson's entry into the yard. Mr Carson believed there had been an informal meeting in July 2003 and a formal meeting sometime later. However, there was no record of the formal meeting and he couldn't recall what had been said. Mr Carson had requested the minutes of the meeting through the respondent's solicitor, but none had been provided. 102 Mr Carson said that Mr Wilson was required to sign the acknowledgement form before he would be taken on as an owner driver for the respondent. The issue of goodwill had been explained to Mr Wilson, but the reference to custom and practice was not mentioned in Mr Carson's account of the conversation. Mr Carson wasn't sure if this conversation was at the informal or the formal meeting. 103 Mr Carson denied telling Mr Wilson that the Paperlinx contract would very likely continue and denied saying that he didn't want to know the price or the details of the truck transaction. He did say however, that the respondent did not require a premium to be paid. He also denied telling Mr Wilson that he would have to buy Mr Aldcroft's truck. 104 Mr Donald James Cameron has been the State Manager of Glen Cameron Nominees since 1999. He has worked in the transport and logistics industry for 17 years and has senior management responsibility for the respondent in New South Wales. It was Mr Cameron's evidence that goodwill was nowhere near as prevalent in the industry as it once was. 105 It was Mr Cameron's understanding that the procedures in place for the sale of trucks prior to 2002 were the same as those which Mr Carson introduced. Mr Cameron said he personally prepares all driver assignment agreements, contractor agreements and acknowledgement forms. He said it is a strict practice that all drivers must sign the acknowledgement form before commencing engagement with the respondent. Mr Cameron deposed that the respondent had never incorporated goodwill in its contractor agreements and he was not aware of any driver paying goodwill or a premium when entering the yard. He said that it was never a requirement or practice of the respondent that such a payment be made or requested. 106 Mr Cameron traced the history of the respondent securing the Paperlinx contract in New South Wales and attached the contract to his affidavit. Mr Cameron said that when he became State Manager there were 19 drivers engaged on the Paperlinx contract and another 20 drivers working on other contracts for the respondent. 107 Mr Cameron said he became aware of Paperlinx's decision not to continue the contract with the respondent around 18 September 2006. He immediately contacted Mr Selig of the Union and Mr Wilson of the Drivers' Committee to organise a meeting of all the drivers. Mr Cameron deposed to the following conversation he had at the meeting on 20 September 2006: "We have received advice from Paperlinx that they have chosen not to renew our contracts effective from 20 October 2006. The decision by Paperlinx was not a reflection of the performance of the contract, but my understanding is that it is a national decision by Paperlinx to in-source the majority of their transport operations. We are very disappointed. My understanding is that Paperlinx will seek to engage a number of the current contractors to perform services directly to Paperlinx, Mr Vanvemde, Regional Logistics Manager at Paperlinx will discuss those opportunities with you separately. If any contractors are displaced as a result of the process, we would be pleased to meet with you, with a view to performing ongoing services to Cameron Group and you should discuss that with me personally. We appreciate your efforts over the course of the contract to date and would also appreciate you maintaining that standard, despite the disappointment until the termination date." 108 In the following four weeks, Mr Cameron attended the yard on around seven or eight occasions. He said he had received no inquiries from any driver about alternative work with the respondent. Mr Cameron said that the respondent was not involved in the selection of drivers by Paperlinx. He had understood 13 drivers were engaged and four were not. Mr Cameron said the respondent had intended to offer work to any driver not taken on by Paperlinx. However, no driver had approached him. 109 Mr Cameron said that the respondent had paid to restore Mr Wilson's truck to its neutral state and while the work was done in the week of 23 October 2006, Mr Wilson was provided with another company truck so that he would not lose any income. 110 Mr Cameron responded to Mr Wilson's evidence by stating that when a new driver entered the yard the usual practice was for the driver to undertake two weeks training before commencing contract work for the respondent. Mr Cameron denied that the procedures were inconsistent. He said they were designed to ensure that a new owner driver is aware that a fee or premium is not a requirement and the acknowledgement form was required to be signed prior to commencing work. 111 Mr Cameron said that notwithstanding the 'fundamental change' clause in the contractor's agreement, the agreement had a nominal expiry date of 1 October 2006. 112 Mr Cameron rejected Mr Bozinovski's claim that the respondent did not talk to, or consult with the drivers about the loss of the Paperlinx contract. None of the drivers approached him about alternative work. 113 Mr Cameron responded to Mr Vella's statement and said that when the Paperlinx contract was won, the drivers were given the option of becoming employee drivers of the respondent or being engaged as contractors. They all undertook the latter. Mr Cameron again insisted that he did not know the price that the contractors were paying for their trucks and the price was never discussed with him. 114 Mr Cameron said that he had meetings with the Drivers' Committee on 9 and 24 August and 7 September 2006 where he told the drivers that the Paperlinx contract was due to expire and negotiations were being undertaken about renewal. The purpose of these meetings was to commence discussions about the terms of a new contract with the drivers. While at each meeting the drivers asked about progress of the negotiations with Paperlinx, he could not provide any information. Mr Cameron maintained that the respondent had never given the drivers the impression the contract was ongoing. In response to Mr Smith's and Mr Johnston's statements, Mr Cameron said that the respondent has never been involved in the sale or purchase of a truck and, prior to these proceedings, he had never known the price contractors had paid for their trucks. 115 In cross-examination, Mr Cameron said that the procedures at the Chullora yard were consistent with the procedures adopted throughout the respondent's business. Mr Cameron conceded that the contractors' agreement for the Paperlinx contract was different to the standard contract, in so far as cl 8 was concerned. That provision gives a driver the right to assign the contract to someone else without restriction of price. Mr Cameron accepted that assigning a five year contract for the balance of the contract had a potential commercial value. He agreed that the clause did not prohibit the driver assigning the contract from charging whatever he liked. 116 Mr Cameron said that from his knowledge, the drivers had been made aware that the Paperlinx contract was to expire in October 2006. Mr Cameron agreed that no firm offer of re-employment for actual vacancies had been put to any displaced driver. However, the offer was conveyed in a letter and at the 20 September meeting, for work in the general fleet operating mainly out of Villawood. He again said that no one had approached him. Mr Cameron added that he had no knowledge and had made no inquiries as to why some drivers were taken on by Paperlinx and others were not. 117 Mr Cameron had no recollection of a 2005 conversation with Mr Wilson in which he (Mr Cameron) had asked if any driver was interested in selling his truck. He denied being told by Mr Wilson that "Les was looking for $70 - 100,000 and Charlie wanted $100,000". 118 In re-examination, Mr Cameron said that in 2003/4 the respondent's revenue was $1.5 million and had since grown in the last financial year to $6.8 million. 119 Mr Wilson was recalled to clarify when he had the first meeting (and only meeting) with Mr Carson. It was a formal meeting in the week before he started training. He understood no notes were taken at the meeting. SUBMISSIONS For the applicants 120 Mr A Hatcher of Counsel addressed the five jurisdictional prerequisites required by s 346(1) of the Act. The first two (a) and (b) were not in contest. As to the third concerning the custom and practice of a premium or fee being paid, the evidence disclosed, notwithstanding the respondent denying any knowledge of a custom and practice, that at least eight transactions had involved the payment of goodwill. Mr Johnston had deposed that, apart from the original owner drivers 20 years ago, every transaction in the yard since had involved goodwill. 121 As to the further requirement that the principle contractor knew or ought reasonably to have known a premium or fee had been paid, the evidence was that the respondent actually did know of the practice. The evidence was that the issue of goodwill was a significant issue when the drivers came over from Paperlinx to the respondent in 2001. The drivers wanted to protect their goodwill and the negotiations at the time produced cl 8 in the contractor's agreement which permitted the assignment of the contract. Mr Hatcher said that Mr Carson's evidence on this issue was evasive when he firstly said that goodwill wasn't raised in the negotiations, but later agreed it had been. Mr Hatcher said it was incredible for the respondent to argue that cl 8 didn't give the driver an opportunity to assign his contract for value being the balance of the contract and the truck. This is in fact what had occurred. For example, three witnesses gave evidence of informing Mr Carson that they had paid goodwill: Mr Bozinovski, Mr Vella and Mr Wilson. Despite Mr Carson and Mr Cameron denying the conversations, the evidence of Mr Bozinovski, Mr Vella and Mr Wilson should be preferred to that of Mr Carson and Mr Cameron. 122 As to the fifth prerequisite in s 346(1) of the Act, concerning whether the principle carrier failed to take reasonable steps to advise the carrier that a premium was not made or required, Mr Hatcher submitted that it was not good enough to rely on the acknowledgement form signed by both applicants when in truth there was a requirement for goodwill to be paid: See Monier Roofing Pty Ltd v Quintrell (1997) 78 IR 38. Mr Wilson's evidence was that when he told Mr Carson he would buy a truck independently, Mr Carson had said that he had to buy from an existing driver. Indeed, Mr Carson had confirmed there was no other way of getting into the yard. Mr Hatcher submitted that whether the drivers were advised of the matter or not, isn't the point. 123 In any event, Mr Hatcher said that the acknowledgement forms don't stand up to scrutiny. Mr Bozinovski was provided with the form and signed it around 26 February 2002, after he had paid money for the truck. By then it was too late for him to back out. He had not been provided with the form at the meeting on 18 February 2002. Moreover, the minutes of this meeting do not refer to the two matters required to be explained to him; that it was not a requirement to pay a premium and it was not a custom and practice at the yard. Mr Carson then required Mr Bozinovski to sign a document acknowledging these two matters had been explained to him. In addition, as Mr Carson merely saw the form as 'housekeeping', why would Mr Bozinovski consider the document as important? 124 Mr Hatcher submitted that the same situation applied to Mr Wilson. Mr Carson couldn't even be sure if there was a formal meeting with Mr Wilson and what was said at the meeting. In these circumstances Mr Wilson's evidence would be preferred. 125 Mr Hatcher then dealt with the issue of unfairness. He claimed both applicants were denied any compensation, either by way of goodwill, or severance pay in circumstances where they had a reasonable expectation of ongoing work. Mr Carson had made such representations. The respondent had not told the applicants that the Paperlinx contract had a fixed term which expired in October 2006. 126 Another element of unfairness was the knowledge the respondent had that goodwill had been paid. 127 In addition, Mr Hatcher put that the respondent made no attempt to ensure that Paperlinx's process was fair, objective and transparent. No genuine effort was made by the respondent to find the applicants' alternative work aside from a vague, non-specific offer of general work in the fleet. 128 Finally, as to unfairness, Mr Hatcher said that despite a three month notice provision in their contracts, the applicants were only given one month's notice. 129 In respect to compensation, Mr Hatcher said that in the case of Mr Wilson he had lost $55,000 premium and Mr Bozinovski had lost $80,000. Mr Wilson had suffered an ongoing loss and his truck was valued at $45,000 while Mr Bozinovski's truck was valued at $50,000. Mr Hatcher submitted that the Tribunal might also have regard to the recent decision of the Commission which resulted in a new general redundancy contract determination: See Transport Industry - Redundancy (State) Contract Determination [2007] NSWIRComm 183. For the respondent 130 Mr T Saunders of Counsel opened his submissions by raising three preliminary jurisdictional issues. 131 Firstly, he said that there were no head contracts of carriage between the respondent and the applicants. In this regard Mr Saunders referred to the definition of head contract of carriage in s 345 of the Act: head contract of carriage means an agreement, arrangement or practice under which a principal contractor and carrier agree that the carrier is to provide services exclusively and on an agreed regular basis for the principal contractor. 132 Mr Saunders relied on the word 'exclusively' in the definition to submit that there was no agreement the carriers were to provide services 'exclusively' for the principal contractor. Indeed, it was an express term of each of the contractor agreements that the carrier "may undertake the carriage of goods for or on behalf of any other person other than Camerons, provided such carriage does not conflict with the contractors' obligations under this Agreement". Thus, because it was an nonexclusive arrangement the respondent was not, and never had been a party to a head contract of carriage with either applicant: See BP Refinary (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266. 133 Secondly, Mr Saunders submitted that neither applicant was a carrier as defined by s 345 of the Act: carrier means an individual, partnership or body corporate who or which supplies services under contracts of carriage. 134 This proposition arose from the definition of a body corporate in s 309(c) that the person employed to drive the motor vehicle being used to transport goods must be: (c) where the carrier is a body corporate—if no person is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the body corporate or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business unless the person is: (i) a director of the body corporate or a member of the family of a director of the body corporate, or (ii) a person who, together with the members of his or her family, has a controlling interest in the body corporate, or (iii) a member of the family of a person who, together with the members of his or her family, has a controlling interest in the body corporate. 135 Mr Saunders said that there was no evidence that the person employed to drive the truck fell into any of the above categories and, consequently neither applicants were 'carriers' as denied. 136 Thirdly, Mr Saunders put that the respondent was not a principal contractor for the purposes of s 346(1). A principle contractor is defined at s 310(1) as: 1) For the purposes of this Chapter, a principal contractor is, subject to this section, the person for whom the carrier under a contract of carriage agrees to transport goods to which the contract relates. 137 It followed that there cannot be a principal contractor unless there is a carrier and a contract of carriage. As it was submitted there were no contracts of carriage, the respondent cannot be a principal contractor in relation to the applicants. The applicants claims should be dismissed on these three jurisdictional grounds. 138 Mr Saunders then referred to the other necessary jurisdictional prerequisites found in s 346(c), (d) and (e) of the Act. 139 Mr Saunders submitted that the establishment of a custom and practice requires something more than an assertion which is contested: See Galea v Amatek (1996) 86 IR 455. Custom and practice means an established practice or unavoidable fact: See Truckbug Pty Ltd v Blue Circle Southern Cement Ltd [2001] NSWIRComm 88. 140 Mr Saunders said that the focus of the Tribunal must not be on whether premiums were paid prior to October 2001 involving Paperlinx, but whether it was a custom and practice of the respondent's business. Mr Cameron's evidence was that there was no custom and practice in the paper section of the transport industry. One example of Mr Wilson paying a premium to Mr Aldcroft in August 2003 was insufficient to establish a custom and practice. Moreover, hearsay evidence of what other drivers were said to have been paid for their trucks should be given little or no weight. 141 As to subparagraph (d) relating to the knowledge of the respondent as to whether a fee or premium had been paid, Mr Carson, who presented as an honest and reliable witness, gave sworn evidence that he did not know the price paid by the applicants or whether a premium or fee had been paid. His evidence should be preferred to that of the applicants. 142 Mr Saunders put that the Tribunal would not find that the respondent ought to have known of a premium being paid because: a) the respondent had told the applicants the company did not recognise goodwill and excluded it from the contractors' agreements; b) there was no historic or other reason why the respondent ought to have been aware a premium had been paid by the applicants; and c) the respondent was entitled to believe that Mr Wilson and Mr Bozinovski were telling the truth when they signed acknowledgement forms. 143 Mr Saunders in describing subpar (e) as an 'escape' mechanism said it must be shown that either: (a) the principal contractor failed to take reasonable steps to relevantly advise the carrier concerning the payment of a premium; or (b) the principal contractor did not have a requirement against a premium being made or requested. The requirement of a principal contractor against the payment must be genuinely held rather than its desired or preferred position. 144 Mr Saunders submitted that the acknowledgement forms were an express recognition that the respondent had a genuinely held requirement that no premium be made or requested before a driver commenced work. The respondent took active steps to ensure Mr Wilson and Mr Bozinovski signed the acknowledgement form prior to commencing work. There were other reasonable steps taken by the respondent to advise, both orally and in writing, that it did not require a premium or fee to be paid. Mr Wilson and Mr Bozinovski both confirmed that they had been told this by Mr Carson. 145 Mr Saunders detailed the steps taken by the respondent to advise Mr Bozinovski that it was not a requirement that a premium be paid or requested. a) Mr Glen Cameron told the contract drivers in 2001 that the respondent did not recognise goodwill and it was excluded from the negotiations; b) Each of the contractor agreements signed by the drivers in late 2001 do not state that goodwill is preserved or recognised. Clause 6.1(a) provides that no compensation or damages will be paid in the event of the termination of the contract; c) Mr Bozinovski was told by Mr Carson on 19 February 2002 that he was required to sign an acknowledgement form confirming his understanding that no goodwill should be included in the truck transaction; d) Mr Bozinovski first accepted that the form was tabled at the meeting and he received it the same day, but then denied it. Mr Bozinovski's denials were not plausible as he later agreed the minutes of the meeting were a true record of what was said at the meeting and that he had signed the minutes; e) Mr Bozinovski had time to consider the acknowledgment and take advice in relation to it from 18 February 2002 to when he signed it on 26 February and to when he actually signed his contract agreement on 4 March; f) Mr Bozinovski signed the acknowledgement form in the presence of Mr Vella; g) Mr Bozinovski accepted that he had read the acknowledgement form before he signed it; and h) Mr Bozinovski agreed that it had been explained to him and he understood that it was not a requirement to pay a premium or fee to enter into a driver agreement with the respondent. 146 Mr Saunders said in light of these matters it must be found that the respondent did take reasonable steps to advise Mr Bozinovski that the payment of a fee or premium was not a requirement of the respondent. 147 Mr Saunders then detailed the steps taken by the respondent to advise Mr Wilson that it was not a requirement that a premium be paid or requested. a) Mr Glen Cameron told the contract drivers in 2001 that the respondent did not recognise goodwill and it was excluded from the negotiations; b) Each of the contractor agreements signed by the drivers in late 2001 do not state that goodwill is preserved or recognised. Clause 6.1(a) provides that no compensation or damages will be paid in the event of the termination of the contract; c) In March 2002, the respondent provided each driver with the written procedures in relation to the sale of trucks and assignment of contractor agreements. Attached to the procedures was the acknowledgment form. Mr Aldcroft had received these documents in March 2002; d) Mr Wilson met Mr Carson on 4 August 2003 and was told that no goodwill should be included and that the respondent did not require goodwill to be paid. Despite denying this was told to him in his affidavit, Mr Wilson conceded in cross-examination that Mr Carson had told him; e) The contractor assignment agreement and the acknowledgement form were both signed by Mr Wilson and dated 18 August 2003. He accepted that he had read both documents. Mr Wilson's credibility was damaged by the implausible explanation that he had backdated each document having signed them on 25 August 2003; f) The signing of the document on 18 August 2003 is consistent with the timing of events for securing the bank loans for the transactions and obtaining insurance for the vehicle on 22 August; g) Mr Wilson was given an opportunity to seek legal and accounting advice in relation to the purchase, and he did so; and h) Mr Wilson conceded that the respondent had explained to him and he understood that a premium or fee was not a requirement of the respondent. 148 Mr Saunders said these matters demonstrated that the respondent had taken reasonable steps to advise Mr Wilson it was not a requirement for a fee or premium to be paid. 149 Mr Saunders submitted that in the event of all the jurisdictional hurdles being overcome by the applicants, the termination of the head contacts of carriage were not unfair, harsh or unconscionable for the following reasons: (a) The contractors were given no assurance in relation to the availability of work beyond the term of the Paperlinx contract or the term of the contractor agreement, both of which expired in October 2006; (b) No representations, whether express or implied, were made by or on behalf of the Respondent that goodwill would be recognised or paid. In fact, the Respondent expressly stated on numerous occasions that it did not recognise goodwill and did not require goodwill to be paid. The Respondent actively and successfully sought the omission of goodwill from any agreement relating to the sale of a truck; (c) In 2001, the contractors were given the option of selling their truck to the Respondent and being engaged as employees (with all the benefits associated with permanent employment) or continuing to own their truck and being engaged as independent contractors, on the express footing that the Respondent did not recognise goodwill; (d) The Respondent had no knowledge of any goodwill being paid in relation to entry into the Respondent's yard; (e) The Respondent gave the contractors one month's notice of the termination of their contracts in accordance with the terms of those contracts. That notice was given immediately after the Respondent was informed by Paperlinx that its contract would not be renewed; (f) The Respondent's contract was not renewed with Paperlinx as a result of any fault on the part of the Respondent (or the drivers); (g) The Respondent did not play any part in the selection of contractors to be engaged by Paperlinx in October 2006. Any unfairness in relation to that process, or the criteria used for selection, is the responsibility of Paperlinx, not the Respondent; (h) Mr Wilson was offered alternative work with the Respondent as an employee driver on Amcor work. Mr Wilson did not even discuss that offer with the Respondent, with the result that he rejected the offer of alternative work without any knowledge of the terms and conditions of the offer; (i) The Respondent repainted Mr Wilson's truck without any contractual obligation to do so, at a cost of $4,235 to the Respondent; and (j) Neither Mr Wilson nor Mr Bozinovski made any attempt to contact the Respondent in relation to the availability of alternative work, as invited to do so both in the meeting on 20 September 2006 and in the Respondent's letter dated 20 September 2006. The evidence given by Mr Don Cameron was that the Respondent had work available at the time for owner drivers. 150 Finally, Mr Saunders asked the Tribunal to dismiss both applications with costs reserved. 151 In reply, Mr Hatcher answered each of Mr Saunders' three preliminary jurisdictional points. 152 On the exclusivity point, Mr Hatcher submitted that the definition of head contract of carriage is not limited to an agreement, but includes an arrangement or practice. The contract itself provides at cl 1.12: The Contractor may during the Term undertake or agree to undertake the carriage of goods for or on behalf of any other person other than Camerons, provided such carriage does not conflict with the Contractor's obligations under this Agreement 153 The issue cannot be determined on the face of the contract alone. In reality, it was impossible for the carriers to undertake other work because it was a requirement of their contract that: a) the truck to be fitted with communication equipment and other technology required by the respondent; b) for signage and the truck to be painted in company livery; and c) the vehicle to be available to provide a service for the respondent. 154 Significantly, subsection (2) of s 346 qualifies the exclusivity requirement as it says: (2) A carrier is not prohibited from making a claim under this section because the carrier performs minor or incidental work for a person other than the principal contractor under the head contract of carriage. Mr Hatcher also referred to Rumsey v R Clifford & Son Holdings Pty Ltd (1996) 68 IR 75 on this point. 155 In any event, it was incumbent on the respondent to call evidence to make good its propositions and not simply remain silent until closing submissions. 156 As to the point of whether the applicants were carriers as defined, Mr Hatcher referred to the evidence that Mr Bozinovski was a director of a family company. (Mr Saunders thereupon withdrew this jurisdictional objection in respect to Mr Bozinovski.) Mr Hatcher tendered a company search for MJW Transport which disclosed Mr Wilson to be both a director and shareholder of MJW Transport. The respondent's third jurisdictional issue must fail when the first two are rejected. 157 Mr Hatcher defended the attacks on the credibility of Mr Bozinovski by submitting that the infelicities with his evidence had more to do with his lack of command of English than a lack of credibility. 158 In respect to Mr Wilson, his frank admission that he backdated the documents demonstrated that he was being truthful, because his admission didn't advance his case at all. CONSIDERATION 159 For the reasons which will shortly become self-evident, we find it unnecessary to make any findings on the respondent's three preliminary jurisdictional points. 160 This is so because we find that all of the jurisdictional prerequisites under s 346(1) of the Act have been met, with the exception of subsection (e) of s 346(1) which is expressed as follows. "the principal contractor failed to take reasonable stops to advise the carrier that it was not a requirement of the principal contractor that such a payment be made or requested". 161 In our view, there is no doubt that the right to sell trucks with work was a contentious and much discussed issue between the contract carriers in the yard and the respondent's senior management when the respondent took over the Paperlinx contract in 2001. 162 Clearly, the result of these meetings and negotiations was the inclusion of cl 8 in the contract carriers' agreement between the contract carriers and the respondent for work performed under the Paperlinx contract. Clause 8 states: ASSIGNMENT 8.1 During the term of this Agreement, the Contractor shall not assign, subcontract, transfer, mortgage, charge or encumber all or any part of its rights, benefits or obligations under this Agreement, without the prior written permission of Camerons. 8.2 The proposed assignee ("the Assignee") must be approved by Camerons and Camerons may at its discretion require a trial period of fourteen days before its determination as to whether to grant written permission for the assignment of this Agreement, such permission shall not be unreasonably withheld. 8.3 The Contractor is responsible for professional training of the Assignee in all Camerons and Camerons' customer processes wherever such assignment occurs. The Assignee must be suitably qualified. 163 This allowed a contract carrier to assign the remainder of his contract with the Principal Contractor to a third party, provided the incoming third party was acceptable to the Principal Contractor and provided the incoming third party acknowledged in writing that no compensation was payable should the contract terminate for reasons other than misconduct. Both applicants had copies of this contract prior to signing their own contracts, and Mr Wilson obtained legal and accounting advice and Mr Bozinovaki obtained his accountant's advice. 164 Both applicants in these matters signed an acknowledgement that they were advised of it not being a company requirement for goodwill to be paid and goodwill was not a custom and practice in the yard, prior to their commencing paid work for the respondent. Even if we accept that Mr Wilson signed the form on 25 August 2003 (the day he commenced work) he was well aware of its contents prior to this date. In Mr Bozinovski's case, we believe he received the acknowledgement form on 18 February 2002, well before his actual commencement date, and was fully aware of its requirements. 165 The acknowledgement which both applicants were required to sign before commencing paid work for the respondent included the following words: It has been explained to me by Camerons, and I understand that Camerons does not require a premium or fee to be requested or paid in order to enter into a Driver Agreement with them and there is no custom and practice within Camerons that premiums or fees be paid to access work under a Driver Agreement. 166 The Tribunal believes that with such an explicit written acknowledgement, it could not be argued that the applicants were unaware that the respondent had a requirement that a premium not be paid. 167 The respondent specifically took steps to ensure that the applicants were made aware of it's position, and specifically had the applicants sign documents that they were made so aware. We accept Mr Saunders' submissions in this regard. 168 The Contractor Agreements, signed by the contractors in late 2001, had a cl 6.1 (a) which specifically provides that the contractor shall not be entitled to compensation on the termination of the agreement. The agreement also specifies that a contract can only be assigned to a third party with the written agreement of the Principal Contractor, (cl 8.1). 169 The evidence was that Mr Wilson had a copy of Mr Aldcroft's agreement in July 2003, and Mr Bozinovski gave evidence that he had read the contract and understood it was for a term of five years and that no compensation was payable on termination with one month's notice. 170 With these specific provisions, it is clear that an incoming prospective contractor could not expect compensation from the Principal Contractor for a cessation of the contract according to its relevant terms. 171 It is apparent to the Tribunal that both applicants proceeded with their purchase, in spite of these warnings, in the mistaken belief that the respondent would continue to retain the Paperlinx work past the contract expiry date of October 2006, and thus enable them to recover the costs associated with their purchase of the work. This expectation of future work seems to have been bolstered by the opinions expressed by other contract carriers in the yard and by the views of the sellers of the vehicles concerned. 172 In our opinion, the applicants took a calculated gamble that the Paperlinx work would continue past October 2006. Unfortunately, that gamble failed. 173 It did not reflect well on the applicants that neither of them took up the offer of alternative work offered by the respondent to those contractors who failed to be picked up by Paperlinx when Paperlinx again in-sourced the work. There seems no logical explanation for this. It is no answer that the offer by the respondent was not specific and may have involved lesser rates. The fact was they were invited to inquire and failed to do so. The Tribunal is of the opinion that had the applicants offered themselves for ongoing work they could have reduced their exposure to continued debt and compensation would not have been necessary. 174 Notwithstanding our earlier jurisdictional finding, we fail to see how the termination of the applicants' contracts could be considered unfair, harsh and unconscionable when continued engagement of the contracts was offered by the respondent, but not taken up, or even investigated, by them or the Union. 175 For these reasons the claims by both the applicants are dismissed. Any application for costs must be made by notice of motion within 14 days from today. 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.