Bradford v Collison Finance & Investments Pty Ltd (ACN 079 188 524) [2002] QIRC 172 (2002) 171 QGIG 760

760 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 276 – power to amend or void contracts Dean Bradford AND Collison Finance & Investments Pty Ltd (ACN 079 188 524) (No. B1463 of 2002) VICE PRESIDENT LINNANE 26 November 2002 DECISION [1] This is an application by Dean Bradford (Applicant) pursuant to s. 276 of the Industrial Relations Act 1999 (Act). The application seeks to amend a Consultancy Agreement between the Applicant and Collison Finance & Investments Pty. Ltd. (ACN 079 188 524) (Respondent) entered into sometime probably in or about May or June 2001. The Consultancy Agreement is sought to be amended on the basis that it was an unfair contract when it was entered into and/or that it became an unfair contract after it was entered into because of the conduct of the parties. The Applicant further seeks the payment of certain monies consequent upon the amending of the Consultancy Agreement. [2] The Respondent operates a business of facilitating and procuring financing and refinancing of property or other assets. The Applicant was engaged as a broker to procure the finance and/or refinance of properties and the settlement of properties. [3] The matter was originally set down for hearing early in November 2002 however those dates were vacated at the request of the Respondent and further dates were scheduled for December 2002. On or about 12 November 2002 it came to the attention of those representing the Applicant that a meeting had been arranged in late November 2002 to facilitate a buy back of shares in the Respondent by Gary Collison, Manager of the Respondent. These shares had been purchased by Tomato Technologies Limited in or about May 2001. As and from May 2001 to the present time Tomato Technologies Limited has been the parent company of the Respondent. Whilst the original buy back agreement had been entered into in or about 17 July 2002 the Applicant became aware at this time of a recent amendment to that buy back agreement which referred to this s. 276 application. The Applicant identified concerns about the financial viability of the potential purchaser of the shares. In those circumstances I thought it prudent to hear the matter urgently and it generally has been heard out of ordinary Commission hours. [4] I have also undertaken to release a decision in respect of the matter urgently and prior to the buy back meeting scheduled for this week. History of the Contractual Arrangements between the Applicant and Respondent [5] Consultancy Agreement No. 1: In or about February 2000 the Respondent entered into a Consultancy Agreement with Jodean Pty. Ltd. (ACN 092 326 782) (Consultancy Agreement No. 1). The Applicant was the sole director of Jodean Pty. Ltd. and he and his wife were the two shareholders in the company. The Applicant signed that Consultancy Agreement on behalf of Jodean Pty. Ltd. Schedule 1 to that Consultancy Agreement provided as follows: “SCHEDULE ONE Consultant’s Remuneration ¾ A minimum standard Brokerage Fee relevant to individual introducers is to be charged on all transactions together with at least one standard Application Fee of $750. ¾ Remuneration for a standard aforementioned deal is $500. ¾ For every additional $750 Application Fee, a further $250 in Commission will be paid. ¾ Each subsequent Application Fee of $750 shall attract an additional $150.”. [6] As and from 1 July, 2000 Schedule One to Consultancy Agreement No. 1 was amended so that Jodean Pty. Ltd. received the following remuneration (Exhibit 13): “Schedule One (as from 1 st July, 2000) -- 1 of 13 -- 6 December, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 761 PARTARKTRENT INVESTMENTS: $825 (Inclusive G.S.T.) providing minimum Brokerage Nett to C.F.I. of $1375 (otherwise refer to Accounts Department). PACIFIC LIFESTYLE: $1100 (Inclusive G.S.T.) providing minimum Brokerage Nett to C.F.I. of $2500 (otherwise refer to Accounts Department). PHILCO: as per Scale A. A.P.G: per Scale A (note scale refers to C.F.I. fee after commission paid to Introducer). OTHER: refer to Accounts Department. ♦ The above supersedes all existing Schedule One Structures. Signed for & behalf of:_____________________________________________ JODEAN PTY LTD. Signed for & behalf of:_____________________________________________ COLLISON FINANCE & INVESTMENTS PTY LT_D.”. [7] Consultancy Agreement No. 2: In or about May 2001 Tomato Technologies Limited purchased the Respondent and the Applicant was presented with a new Consultancy Agreement (Consultancy Agreement No. 2). This Consultancy Agreement was to be between the Applicant personally and the Respondent. The Applicant was originally unwilling to sign this new Consultancy Agreement. The Applicant asserts that he did not sign Consultancy Agreement No. 2 for at least a period of three weeks after being presented with it. Further he asserts that it was only when his immediate supervisor, his brother Scott Bradford, advised him that Mr Collison had informed him that anyone failing to sign the new agreement “would not be paid” that the Applicant signed Consultancy Agreement No. 2. [8] At the time of entering into Consultancy Agreement No. 2 clause 9(f) of Consultancy Agreement No. 1 was not applicable as Consultancy Agreement No. 1 had been terminated after the expiry of twelve months. Rather clause 9(g) of Consultancy Agreement No. 1 would have applied. Clause 9(g) provided as follows: “(g) If the Consultant’s engagement is terminated after the expiry of twelve months from the date hereof for whatever reason, the Consultant shall be paid commissions only in respect of those transactions which are fully and unconditionally approved.”. [9] As at May/June 2001 the Applicant maintained a belief that if he failed to enter into Consultancy Agreement No. 2 there was a real prospect that he would not receive commission for matters that he, or Jodean Pty. Ltd., had undertaken prior to the termination but which had not settled prior to termination. As indicated previously the Applicant’s immediate supervisor at the time was his brother, Scott Bradford. It was the evidence of Scott Bradford that Mr Collison had informed him to instruct the Applicant that if the Applicant did not sign the new Consultancy Agreement that ongoing commissions that became due to Jodean Pty. Ltd. under Consultancy Agreement No. 1 would be lost. It was the evidence of both the Applicant and Scott Bradford that Scott Bradford relayed the instruction from Mr Collison to the Applicant. [10] The Applicant says that the loss of that commission would have placed him in a difficult financial position. As such the Applicant decided he had to sign Consultancy Agreement No. 2 and did so in or about May or June 2001. This new Consultancy Agreement was to become effective 1 July 2001. [11] Mr Collison denies ever suggesting to either the Applicant or to Scott Bradford that commissions earned under Consultancy Agreement No. 1 would not be paid if Consultancy Agreement No. 2 was not signed by the Applicant. [12] It is however clear from the evidence that the Applicant was faced with only two options i.e. to sign the Consultancy Agreement No. 2 or have his engagement with the Respondent terminated. Given the reliance by the Respondent on a similar clause to clause 9(g) in Consultancy Agreement No. 1 to refuse payment of monies to the Applicant upon termination of Consultancy Agreement No. 2, I can well understand why the Applicant maintained the belief that he would not receive commission for matters that had not settled prior to the termination of Consultancy Agreement No. 1. Scale A C.F.I. Nett Brokerage fee Received: Under $1325 Refer to Accounts Department. $1325 --- $1925 + 2 Application Fees $1100 (Inclusive G.S.T.) $1926 --- $2750 + 2 Application Fees $1500 (Inclusive G.S.T) $2751 --- $3500 + 2 Application Fees $1750 (Inclusive G.S.T.) Over $3500 Refer to Accounts Department. * If only 1 (one) Application Fee - Refer to Accounts Department. -- 2 of 13 -- 762 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 [13] It is apparent that a further amendment was made to Schedule One of Consultancy Agreement No. 1 although the parties were unable to provide me with any documentation of such an amendment. I say this because Schedule One to Consultancy Agreement No. 2 has rates of remuneration as and from 1 January 2001 (January 2001 Schedule One) even though Consultancy Agreement No. 2 only became effective as and from 1 July 2001. [14] The terms and conditions of Consultancy Agreement No. 2 were generally identical to those contained in Consultancy Agreement No. 1 except for the name of the Consultant and Schedule 1, although the evidence reveals that the Schedule One attached to the Consultancy Agreement No. 2 was identical to the remuneration received by Jodean Pty. Ltd. prior to the Consultancy Agreement No. 2 becoming effective. Schedule One to Consultancy Agreement No. 2 provided as follows: “Schedule One Interview – (as from 1 st January 2001) Scale A C.F.I. Nett Brokerage fee Received: 1 App. 2 Apps. 3 Apps. (after GST & Introducer Commission removed) Under $950 Refer to Accounts Department $ 950 --- $1150 $ 400 $ 900 $1400 $1151 --- $1925 $ 600 $1100 $1600 $1926 --- $2750 $1000 $1500 $2000 $2751 --- $3500 $1250 $1750 $2250 $3501 --- $4250 $1500 $2000 $2500 $4251 --- $5000 $1750 $2250 $2750 Over $5000 Refer to Accounts Department * Note: All Above Commissions are G.S.T. Inclusive. PARKTRENT INVESTMENTS: $500 (Inclusive G.S.T.) – 1 Application. $825 (Inclusive G.S.T.) – 2 Applications providing minimum Brokerage Nett to C.F.I. of $1375 (otherwise refer to Accounts Department). PARKTRENT (New Zealand): (From 27/09/2001) Minimum Brokerage: $2500 / Application fee: $950 / Broker to get $1100 (Inclusive G.S.T.) PACIFIC LIFESTYLE: $1250 (Inclusive G.S.T.) providing minimum Brokerage to C.F.I. of $2500 (Inclusive G.S.T.) – (otherwise refer to Accounts Department). PHILCO: as per Scale A. A.P.G: per Scale A (note scale refers to C.F.I. fee after commission paid to Introducer). OTHER: refer to Accounts Department. ♦ The above supersedes all existing Schedule One Structures. Signed for & behalf of:_________________________________________________ DEAN BRADFORD. Signed for & behalf of:_________________________________________________ COLLISON FINANCE & INVESTMENTS PTY LTD.”. [15] The evidence indicates that as and from the entering into of Consultancy Agreement No. 2 all commission was paid, according to Schedule One, to the Applicant personally, less GST and less PAYG. This included commission that had been earned by Jodean Pty. Ltd. pursuant to Consultancy Agreement No. 1. [16] Following the entering into of Consultancy Agreement No. 1 all amendments to Schedule One which were tendered in this proceeding and the Schedule One included in Consultancy Agreement No. 2 were each signed by both the Applicant, either in his personal capacity or as director of Jodean Pty. Ltd., and Mr Collison for the Respondent. That is until a document which purports to be an amendment to Schedule One which indicates its effective date of operation as 1 December 2001 (December 2001 Schedule One) which I will deal with later in this decision. -- 3 of 13 -- 6 December, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 763 [17] Reason for Consultancy Agreement No. 2: As to the reasons for proposing Consultancy Agreement No. 2, Mr Collison’s evidence was that he conveyed to the Applicant that there was a need to contract direct with the individual rather than a corporation because of potential taxation liability on the Respondent’s part resulting from amendments to the Income Tax Assessment Act 1997 and to the Taxation Administration Act 1953 by the new Business Tax System Alienation of Personal Services Income Act 2000, often referred to as the “80/20 Ruling”. The Applicant concedes that he was informed in or about May 2001, by the Respondent’s accountant, that the reason for the change in the manner in which he consulted with the Respondent resulted from some tax implications. [18] The Business Tax System Alienation of Personal Services Income Act 2000 was assented to on 30 June, 2000. Section 2(1) of the Act provides that the Act commences on the day on which it receives the Royal Assent. [19] If there was a need to change the method of operation then it seems to me that the need did not arise in or about May 2001. It is apparent from the evidence that the catalyst for the change in the method of engaging brokers arose as a result of the purchase of the Respondent by Tomato Technologies Limited. Prior to that time it seems that the Respondent was prepared to accept the potential taxation liability arising from amendments to the Income Tax Assessment Act 1997 but the new owner, Tomato Technologies Limited, was not prepared to accept such liability. [20] Proposed Change to Schedule One to Consultancy Agreement No. 2 in or about December 2001: Mr Collison contends that in or about December 2001 amendments were made to the Applicant’s Schedule One which effectively broke the commission payment structure into two parts – Scale A and Scale B. The Respondent contends that as and from 1 December 2001 Schedule One provided as follows: “Scale A C.F.I. Nett Brokerage fee Received: 1 App. 2 Apps. 3 Apps. (after GST & Introducer Commission removed) Under $950 Refer to Accounts Department $ 950 --- $1150 $ 250 $ 560 $ 900 $1151 --- $1925 $ 400 $ 700 $1000 $1926 --- $2750 $ 650 $ 950 $1250 $2751 --- $3500 $ 800 $1100 $1450 $3501 --- $4250 $ 950 $1250 $1550 $4251 --- $5000 $1100 $1450 $1750 Over $5000 Refer to Accounts Department The above supersedes all existing Schedule One Structures.”. “Scale B C.F.I. Nett Brokerage fee Received: 1 App. 2 Apps. 3 Apps. (after GST & Introducer Commission removed) Under $950 Refer to Accounts Department $ 950 --- $1150 $ 350 $ 800 $1250 $1151 --- $1925 $ 550 $1000 $1450 $1926 --- $2750 $ 900 $1350 $1800 $2751 --- $3500 $1100 $1600 $2050 $3501 --- $4250 $1350 $1800 $2250 $4251 --- $5000 $1590 $2050 $2500 Over $5000 Refer to Accounts Department. -- 4 of 13 -- 764 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 ♦ The above supersedes all existing Schedule One Structures. 1. The above scale will apply for all sales made in any month personal budgets are achieved. 2. The Scale B is retrospective to Sale No.1 once budget is achieved. (ie. Budget is 4 and 4 sales are made, then all 4 Sales will attract Scale B). 3. A Sale is deemed to be recorded once lodged with credit department. 4. Date of initial interview is the Month of the Sale. 5. Any withdrawal of finance or declines must be replaced in the same Month they were declined or withdrawn to achieve budget (ie. If Sale is made in November and withdraws in December, then you must achieve +1 to achieve Nett budget. Personal Budget for: DEAN BRADFORD Dec '01 Jan '02 Feb '02 March '02 April '02 May '02 June '02 July '02 8 8 10 15 15 15 15 T.B.A.”. [21] Unlike the former amendments to Schedule One which are signed by both parties this document is not signed by either the Applicant or the Respondent. This Schedule One introduced, for the first time, a scale of commission payment which was substantially less that the January 2001 Schedule One remuneration payments (Scale A) and then a scale which was similar to the January 2001 Schedule One remuneration payments but with such payments being conditional upon the Applicant reaching a certain budget level (Scale B). [22] Mr Collison was unable to identify any other broker being required, at or about this time, to meet a budget in order to receive a certain commission level. [23] The Applicant contends that when this amendment was proposed by Mr Collison he spoke with Scott Bradford who in turn arranged a meeting with Jamie Pickering, the Managing Director of Tomato Technologies Limited. Mr Pickering was at that time, and is, the most senior person at Tomato Technologies Limited and is a superior of Mr Collison. The Applicant, Scott Bradford and Mr Pickering were in attendance at this meeting. The evidence of both the Applicant and Scott Bradford is that at this meeting the Applicant advised Mr Pickering that he would not work under the proposed Schedule One remuneration i.e. he would not work under Scale A and he would not work under Scale B if he was required to meet a particular budget. [24] It was not disputed that the Applicant’s (or Jodean’s) remuneration package up until 1 December 2001 had never required the Applicant to reach a certain level of budget. Nor is it disputed that the Applicant was a very valued member of the Respondent team, having been broker of the year in 2001. [25] According to the evidence of both the Applicant and Scott Bradford, Mr Pickering at that meeting then withdrew the proposal. [26] Further, it was the evidence of both the Applicant and Scott Bradford that Scale B was then amended by them to reflect the agreement reached with Mr Pickering at that meeting. Exhibit 14, tendered by the Respondent is a copy of that proposed Schedule One with striking out undertaken by the Applicant and notes made by the Applicant. The Scale B as amended was as follows: “Scale B C.F.I. Nett Brokerage fee Received: 1 App. 2 Apps. 3 Apps. (after GST & Introducer Commission removed) Under $950 Refer to Accounts Department $ 950 --- $1150 $ 350 $ 800 $1250 $1151 --- $1925 $ 550 $1000 $1450 $1926 --- $2750 $ 900 $1350 $1800 $2751 --- $3500 $1100 $1600 $2050 $3501 --- $4250 $1350 $1800 $2250 $4251 --- $5000 $1590 $2050 $2500 Over $5000 Refer to Accounts Department. ♦ The above supersedes all existing Schedule One Structures. 1. The above scale will apply for all sales made in any month personal budgets are achieved. 2. The Scale B is retrospective to Sale No.1 once budget is achieved. (ie. Budget is 4 and 4 sales are made, then all 4 Sales will attract Scale B). 3. A Sale is deemed to be recorded once lodged with credit department. 4. Date of initial interview is the Month of the Sale. 5. Any withdrawal of finance or declines must be replaced in the same Month they were declined or withdrawn to achieve budget (ie. If Sale is made in November and withdraws in December, then you must achieve +1 to achieve Nett budget. -- 5 of 13 -- 6 December, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 765 Personal Budget for: DEAN BRADFORD Dec '01 Jan '02 Feb '02 March '02 April '02 May '02 June '02 July '02 8 8 10 15 15 15 15 T.B.A.” [27] It is the evidence of both the Applicant and Scott Bradford that the document with the deletions made represented the agreement reached at the meeting with Mr Pickering. Also on that document is a notation in the handwriting of Scott Bradford stating “As per discussion with Jamie Pickering” and that notation is signed by Scott Bradford. It was the evidence of Scott Bradford that the amendments and the notation were made to the document on the day of the meeting with Mr Pickering. [28] The actual date of this meeting is unknown. Mr Pickering seems to recall that it may have been in April 2002. This may account for the change in the levels of remuneration paid to the Applicant after 10 April 2002. This is a matter which will be dealt with later in this decision. [29] Mr Pickering’s evidence of the meeting with the Applicant and Scott Bradford was that the Applicant was seeking a higher level of remuneration to that which he was receiving prior to December 2001 – not a lesser remuneration. Mr Pickering said that, in addition to what the Applicant was receiving prior to December 2001, it was proposed by him that an arrangement be considered whereby the Applicant’s remuneration would be topped up. According to Mr Pickering, any such arrangement however would be an arrangement that would encourage the Applicant to remain working for the Respondent. Mr Pickering said that it was his aim at the meeting to keep the Applicant working for the Respondent. [30] Mr Pickering also was quite clear that it was never his intention at that meeting to reduce the remuneration package of the Applicant. It was also his evidence that he relied on information from Mr Collison that the Applicant was meeting budget at the time of the meeting and at subsequent times. If the meeting was in April 2002 then the evidence shows that the Applicant was not meeting the budget indicated on Scale B of the December 2001 Schedule One and had not met the budget levels indicated in that document from December 2001 onwards. [31] Attachment CG-1 to Exhibit 9, the Respondent’s record of commission paid to the Applicant as and from the week ending 13 December 2001 to the week ending 6 May 2002, reveals that the Applicant continued to be paid according to the January 2001 Schedule One for work performed between 1 December 2001 and 10 April 2002. The commission paid to the Applicant during that time bears no resemblance to the amounts in either Scale A or Scale B of the December 2001 Schedule One. [32] After 10 April 2002 the scale of commission paid to the Applicant coincides with the rates provided for in Scale B to the December 2001 Schedule One although, as Mr Collison’s evidence reveals, at no time during that period did the Applicant meet the budget targets referred to in Scale B of the December 2001 Schedule One. The evidence also reveals that at no time during the course of his engagement with the Respondent was the Applicant paid according to Scale A of the December 2001 Schedule One. [33] The fact that the rate of remuneration changed sometime in April 2002 may be indicative that the meeting between the Applicant, Scott Bradford and Mr Pickering did occur in April 2002. [34] Mr Collison contends that the failure to pay the Applicant in accordance with Scale A of the December 2001 Schedule One arose as a result of “accounting errors” by Christine Tyler. Ms Tyler performed certain accounting or bookkeeping functions for the Respondent during her employment which ceased in late August 2002. Ms Tyler is not qualified as an accountant. Mr Collison relies for this contention on the fact that Ian Prowse, the current General Manager of Tomato Technologies Limited, informed him of certain errors made by Ms Tyler. Mr Prowse says that he identified certain errors made by Ms Tyler in a review of the Respondent’s accounting practices undertaken by him in or about April 2002. At the time of undertaking this review Mr Prowse was an operations officer with Tomato Technologies Limited. [35] I should add that the evidence of errors on the part of Ms Tyler referred to by Mr Prowse and/or Mr Collison in the course of this proceeding appeared to be the types of errors one would expect from any employee in the course of their employment. One error referred to was drawn to Ms Tyler’s attention by Peter Hughes, the then Chief Operating Officer of Tomato Technologies Limited, and Ms Tyler said that she was cautioned as a result. There did not appear any pattern established which would indicate incompetence on the part of Ms Tyler. [36] Mr Hughes was employed by Tomato Technologies Limited from January 2002 to September 2002. His evidence was that Mr Collison was never involved, during that period of time, with the payment of staff. According to Mr Hughes all Respondent staff were paid via an entity known as Tomato Group Services and that the payment of Respondent staff was handled primarily by the Chief Executive Officer of that organisation, Craig Duffy. The Pay Advices of the Applicant tendered in this proceeding indicate that the Applicant was paid by the Respondent at least up until 6 March 2002 and that he was paid by Tomato Group Services Pty. Ltd. at least from 22 April 2002. The Pay Advices between those two dates were not tendered. [37] It should be noted that in conducting his review into the operations of the Respondent during the period from his commencement with Tomato Technologies Limited in or about February 2002 until he was appointed General Manager, Mr Prowse did not find any incorrect payments of commission made by Ms Tyler to the Applicant. [38] According to the evidence of Ms Tyler she paid the Applicant on the correct scale which was assigned to her. It was her evidence that whilst Mr Collison attempted to bring in a performance based scale for the Applicant she was never instructed by Mr Collison, the Chief Financial Officer of Tomato Technologies Limited or any Director of Tomato Technologies Limited to pay the Applicant according to the performance based scale. I accept the evidence of Ms Tyler in this regard. [39] In any event clause 17 of Consultancy Agreement No. 2 provides that “[n]o variation to this Agreement shall be valid unless in writing and signed by both parties”. There is no material before me which would indicate that the variation proposed by Mr Collison to take effect as and from 1 December 2001 has been signed by both parties. Mr Collison when asked why the purported variation to Schedule One was not signed said that he had received legal advice to the effect that signatures were not required. I find that to be unusual legal advice, if received, in light of clause 17 of Consultancy Agreement No. 2. [40] In those circumstances I find that there was no agreement to vary the remuneration of the Applicant at any time in or about December 2001 so that the December 2001 Schedule One proffered by Mr Collison has no effect. [41] Termination of Consultancy Agreement No. 2: In or about May 2002 the Applicant submitted an application for leave during the period 24 June 2002 to 12 July 2002 and this was approved by the Respondent. The Applicant departed for his leave on 21 June 2002. -- 6 of 13 -- 766 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 [42] On 2 July 2002 whilst on leave the Applicant attended the Respondent’s office to undertake some urgent business. Whilst in attendance at the office on that day Mr Collison handed the Applicant a letter dated 24 June 2002 which provided as follows: “24 th June 2002 Dean Bradford 15 McIlwraith Avenue Sorrento QLD 4217 Dear Dean, RE: Termination of Contract Further to our meeting on Friday, 21st June 2002 regarding your performance and overall conduct and pursuant to your contractor agreement, we have decided to terminate your contract as at this day 21st June 2002. In regards to, but not limited to, items 9 b (ii) (iii) (ix) of the agreement this termination is effective immediately. Your continued failure to comply with these items has been b[r]ought to your attention on numerous occasions and your actions cannot and will not be tolerated any further. Yours sincerely, COLLISON FINANCE & INVESTMENTS PTY LTD. signed by GARY COLLISON Managing Director.”. [43] Clause 9(b)(ii), (iii) and (ix) of Consultancy Agreement No. 2 provides as follows: “9. Termination This Agreement may be terminated:- … (b) (ii) If the Consultant or any of his employees or consultants fail to perform their duties in accordance with the instructions of the Director of the Company; or (iii) If the Consultant or any of his employees or consultants do not act or are placed in any position which in the reasonable opinion of the Directors of the Company brings it or any of its associates into serious disrepute; … (ix) If the Consultant or any of his employees or consultants commit any serious or persistent breach of any of the provisions of this Agreement; or…”. Statutory Provision [44] Section 276 of the Industrial Relations Act 1999 provides the Commission with power to amend or void contracts. The relevant provisions of s. 276 are as follows: “(1) On application, the commission may amend or declare void (wholly or partly) a contract if it considers – (a) the contract is – (i) a contract of service that is not covered by an industrial instrument; or (ii) a contract for services; and (b) the contract is an unfair contract. (2) In deciding whether to amend or declare void a contract, or part of a contract, the commission may consider – (a) the relative bargaining power of the parties the contract and, if applicable, anyone acting for the parties; or (b) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, a party to the contract; or (c) an industrial instrument or this Act; or (d) anything else the commission considers relevant. … (4) The commission may consider a contract to be an unfair contract if it considers the contract – (a) was an unfair contract when it was entered into; or (b) became an unfair contract after it was entered into because of the conduct of the parties, or a variation to the contract or for any other reason it considers sufficient. -- 7 of 13 -- 6 December, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 767 (5) The Commission may make an order it considers appropriate about payment of an amount for a contract amended or declared void. … ‘unfair contract’ means a contract that – (a) is harsh, unconscionable or unfair; or (b) is against the public interest; or (c) provides, or has provided, a total remuneration less than that which a person performing the work as an employee would received under an industrial instrument or this Act; or (d) is designed to, or does, avoid the provisions of an industrial instrument.”. Contract of Service or Contract for Services [45] It is not disputed that if Consultancy Agreement No. 2 is found to be a contract of service then the contract is not covered by an industrial instrument. On that basis Consultancy Agreement No. 2 clearly falls within s. 276(1)(a) and I should not need to determine whether it is a contract of service or a contract for services. [46] Whilst the matter is not necessary for the purposes of s. 276(1)(a) a determination of the relationship has some relevance to other matters raised in the course of the proceeding. [47] Commissioner Asbury in Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees v. Ralph Soutar (1992) 170 Q.G.I.G. 455 at 457 has recently considered the decision of the majority of the High Court in Hollis v. Vabu Pty. Ltd. (2001) 207 CLR 21 in determining whether a relationship is that of employer/employee or principal/independent contractor. Asbury C noted as follows: “The majority of the High Court in Hollis v Vabu noted that the relationship of the parties was to be found not merely from contractual terms, both oral and written. Rather, the system which was operated under the contracts, and the work practices imposed by Vabu went to establishing the totality of the relationship. The statement of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48 explaining that an independent contractor carries out work not as a representative but as a principal, was considered to warrant close attention. The majority went on to state: ‘…employees and independent contractors perform work for the benefit of their employers and principals respectively. Thus by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee. However, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor. These notions were later expressed positively by Windeyer J in Marshall v Whittaker’s Building Supply Co [(1963) 109 CLR 210 at 217]. His Honour said that the distinction between an employee and an independent contractor is ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own.’. The majority in Hollis v Vabu then considered the notion of control as a means of distinguishing between a relationship of employment and one of independent contract, noting that the Court had adjusted the notion to circumstances of contemporary life in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, and had continued the developments in Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 and Humberstone v Northern Timber Mills (1949) 79 CLR 389. The statement of Mason J in Brodribb (at 29) that control is not the only relevant factor and that the totality of the relationship must be considered, was also cited with approval by the majority in Hollis v Vabu. In determining that bicycle couriers considered in Hollis v Vabu were employees, the majority said: ‘In classifying the bicycle couriers as independent contractors, the Court of Appeal fell into error in making too much of the circumstances that the bicycle couriers owned their own bicycles, bore the expenses of running them and supplied many of their own accessories. Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant, and greater skill and training were required to operate it.’. … The majority also held that this was not a case where there was only the right to exercise control in incidental or collateral matters, but rather, one where there was considerable scope for the actual exercise of control, stating that: ‘Vabu’s whole business consisted of the delivery of documents and parcels by means of couriers. Vabu retained control of the allocation and direction or the various deliveries. The couriers had little latitude. Their work was allocated by Vabu’s fleet controller. They were to deliver goods in the manner in which Vabu directed. In this way, Vabu’s business involved the marshalling and direction of the labour of couriers, whose efforts comprised the very essence of the public manifestation of Vabu’s business. It was not a case that the couriers supplemented or performed part of the work undertaken by Vabu or aided from time to time; rather, as the two documents relating to work practices suggest, to its customers they were Vabu and effectively performed all of Vabu’s operations in the outside world. It would be unrealistic to describe the courier other than as employees.”. [48] The Applicant contends that the relationship between the Applicant and the Respondent is one of employment whilst the Respondent submits that the Applicant was an independent contractor. [49] The indicia favouring a relationship of employer/employee can be briefly summarised as follows: ¾ throughout the course of evidence and submissions the Respondent strongly put the case that the broker was the face of the Respondent; ¾ the term “employment” is regularly used in clause 10 of Consultancy Agreement No. 2 i.e. the Non-Solicitation provision or restraint of trade provision; ¾ the actual restraint provided for in clause 10; ¾ the Pay Advices received by the Applicant in July 2001, December 2001 and March 2002 indicate a Holiday Leave Accrual and a corresponding entitlement to monies for the accrual; -- 8 of 13 -- 768 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 ¾ the Pay Advices indicate that superannuation contributions were paid by Tomato Group Services Pty. Ltd. and the Applicant’s evidence is that on termination he was paid out this superannuation; ¾ Clause 2 of Consultancy Agreement No. 2 which provides that the Applicant must “work the hours which are reasonably necessary to satisfactorily complete the duties and responsibilities of the Consultant” as provided for in clause 5 of the Agreement which in turn refers to the Job Description at Schedule 2 to the Consultancy Agreement which in turn evinces a reasonable degree of control exercised by the Respondent over the manner and performance of the work of the Applicant; ¾ Clause 6 of Consultancy Agreement No. 2 which provides that the Applicant “will not engage in any business or occupation which in the opinion of the Company interferes with the performance” of his duties; ¾ Clause 7 of Consultancy Agreement No. 2 which requires the Applicant to attend “all staff meetings called by the Company”; ¾ Clause 11 of Consultancy Agreement No. 2 which provides that the Applicant “undertakes not to work as a Consultant or otherwise for other persons, companies, organisations or businesses practising in the area of the facilitation and procuring of refinancing of properties or any other assets as well as the introduction of people to investment properties”; ¾ Clause 13 of Consultancy Agreement No. 2 which provides that the Respondent “is prepared to meet reasonable out-of-pocket expenses that may be incurred by the Consultant” and in fact the Respondent paid for “all accommodation, meals etc” when the Applicant was on business trips; and ¾ Clause 23 of Consultancy Agreement No. 2 which refers to Intellectual Property and Confidentiality. [50] The indicia favouring a relationship of principal/independent contractor are briefly summarised as follows: ¾ the Applicant supplied his own motor vehicle and personally maintained that vehicle although it was used for business purposes. The evidence is however that the great majority of work performed by the Applicant was performed in the Respondent’s office at the Gold Coast and that the vehicle was generally only used when the Applicant had to travel to locations outside the Respondent’s Gold Coast office; ¾ the Applicant supplied his own mobile telephone and person ally paid for the cost involved. Once again the evidence was that the Applicant performed most of his duties in the Gold Coast office of the Respondent. The need for the mobile telephone and the costs associated with that would have been for periods when the Applicant was engaged outside the Gold Coast office of the Respondent; ¾ Clause 24 of Consultancy Agreement No. 2 which specifically provides that the “parties agree that it is intended that this Agreement shall create the relationship of Contractor and independent Contractor between them and they state that it is not their intention to create any other relationship and in particular the relationship of employer and employee or the relationship of partners”; ¾ Clause 9 of Consultancy Agreement No. 2 refers to “the Consultant or any of his employees or consultants”; and ¾ the fact that the contract provided for a commission only form of remuneration. [51] Viewed as a practical matter, the Applicant was not running his own business or enterprise nor did he have independence in the conduct of the work he performed. In considering the totality of the evidence I consider that the relationship between the Applicant and the Respondent to be one of employment. Was Consultancy Agreement No. 2 Unfair? [52] Section 276(1)(b) of the Act provides that the Commission can only amend or declare void a contract if it considers that the contract is an unfair contract. Section 276(4) of the Act then deals with when the Commission may consider a contract to be an unfair contract. I was referred by Mr Logan SC, Counsel for the Respondent, to a decision of Commissioner Asbury in Robert Over/RW & LK Over v Hexlawn Pty Ltd trading as the Ready Towing Group and Brisbane Communications Pty. Ltd. (2001) 168 QGIG 161 for a collation of decisions of this Commission on s. 276(4) of the Act. In particular I was referred to the following passage: “Section 276(4) provides that the Commission may consider a contract to be unfair if it considers the contract was unfair when it was entered into; or became unfair because of the conduct of the parties, or a variation to the contract, or for any other reason it considers sufficient. In my view these provisions are sufficiently broad to give the Commission jurisdiction to deal with a breach of a contract: See decisions of Thompson C in BD & HA Steele Pty Ltd v Austcover Pty Ltd (2000) 165 QGIG 256 at 259 and Swan C in Woodview Transport v Toll North Pty Ltd (2001) 168 QGIG 30 at 31. In relation to the question of what constitutes ‘unfairness’ for the purpose of s.276, in P & J Trucking Pty ltd v Toll Transport Pty Ltd (2001) 166 QGIG 434 at 435 Blades C referred to a number of New South Wales cases determined under s.275 of the Industrial Relations Act 1991 (NSW), which is very similar to s.276 of the Queensland Act. In Palmer v TNT Australia Pty Limited t/a TNT Express (1995) NSW IRC 24, Hungerford J adopted the approach in an earlier decision of Sheldon J in Davies v General Transport Development Pty Limited (1967) AR (NSW) 371, that the unfairness of a contract or arrangement, was to be determined on the basis of common sense, characteristic of the ‘ordinary juryman’ and as a matter of morals not of law. … Taking the ‘common sense’ approach, I am unable to be reasonably satisfied that the conduct of Mr Ready was such that it rendered the applicant’s contract unfair. In my view, to apply the significant power of the Commission under s.276, to what was essentially a workplace altercation resulting in the termination of a contract, would be an improper exercise of that power, in all of the circumstances of this case. In this regard, the approach of Sheldon J in Davies v General Transport Development Pty Ltd (1967) AR (NSW) 371 at 375, is pertinent, where his honour said of the New South Wales unfair contracts provision that: ‘… [the section’s] massive power makes it imperative that it should be exercised with proper restraint…it should not permit itself to become a refuge for those who are merely disgruntled with a bargain, entered into on even terms…the discretion should be exercised to protect victims of wrong dealings not to prescribe anodynes.’”. [53] What then is said to be the unfairness in Consultancy Agreement No. 2? In the application itself the Applicant contends in paragraph 2(n) that Consultancy Agreement No. 2 is harsh, unconscionable or unfair and is against the public interest for the following reasons: “(i) I had little or no bargaining power in relation to the contract; Particulars I was told that if I did not sign a new consultancy agreement in my personal capacity with Collison Finance Investments Pty Ltd, the commission due and owing to me under the contract between Jodean and Collison Finance Investments Pty Ltd would be cut off. (ii) Undue influence or pressure and/or unfair tactics were used by the Respondent; -- 9 of 13 -- 6 December, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 769 Particulars Collison Finance Investments Pty Ltd now rely upon the fact that the agreement is less than 12 Months old at the time of termination as a justification to withhold commission payments to me. If they had given me 30 Days Notice the agreement would have been 12 months old. (iii) It is harsh or unconscionable and against the public interest to rely upon the term of the contract allowing the respondent to withhold payments due and owing to the applicant upon termination of the contract. Particulars I am now denied payment of monies owed to me for work done and completed by me purely as a punitive measure by Collison Finance Investments Pty Ltd and by no misfeasance by me.”. [54] I accept that in relation to the entering into of Consultancy Agreement No. 2 that the Applicant was faced with a fait accompli. I accept that he had no bargaining power at this time. The terms of Consultancy Agreement No. 2 however generally reflected the terms of Consultancy Agreement No. 1 which the Applicant was satisfied with. [55] As to (ii) and (iii) the Respondent does not rely upon clause 9(f) of Consultancy Agreement No. 2 to justify the withholding of commission payments to the Applicant. In any event given that neither party is able to say when Consultancy Agreement No. 2 was entered into there is a reasonable possibility that Consultancy Agreement No. 2 did have a life of more than twelve months. [56] Mr Shepley, Counsel for the Applicant, further submitted that Consultancy Agreement No. 2 was harsh, unconscionable or unfair given clause 9(e) and the ability of the Respondent to withhold payment of any amounts otherwise due to the Applicant where the Agreement is terminated pursuant to clause 9(b)(iii) and (ix) i.e. those provisions referred to in clause 9(e) on which the Respondent relied to terminate Consultancy Agreement No. 2. Clause 9(b)(iii) and (ix) have previously been quoted in this decision. [57] Further relevant provisions of clause 9 of Consultancy Agreement No. 2 are as follows: “(e) If this Agreement is terminated by the Company pursuant to Clause 9(b)(iii), (v), (vi), (vii), (ix) or (x) then the Company may withhold payments of any amounts otherwise due to the Consultant. (f) If the Consultant’s engagement is terminated for any reason whatsoever within twelve months of the commencement of this agreement, the company shall be entitled to withhold all commissions due and outstanding to the Consultant as at the date of termination. (g) If the consultant’s engagement is terminated after the expiry of twelve months from the date hereof for whatever reason, the Consultant shall be paid commission only in respect of those transactions which are fully and unconditionally approved.”. [58] There was no evidence before me which would suggest that the Applicant during the course of his employment with the Respondent brought the Respondent, or any of its associates, into serious disrepute. Whilst the evidence before me did not disclose the names of the directors of the Respondent I understand that Mr Collison was a director at the time of termination of Consultancy Agreement No. 2. Mr Collison, in the termination letter, relied upon clause 9(b)(iii). [59] If the contract enabled Mr Collison to terminate on that ground, even though there was no evidence placed before me to support the contention, and clause 9(e) then entitled the Respondent to withhold payments of any amounts otherwise due to the Applicant then in my view this would make Consultancy Agreement No. 2 harsh, unconscionable and unfair. The Respondent has to date interpreted clause 9(e) as entitling them to withhold any amounts that became due to the Applicant after the termination of Consultancy Agreement No. 2. The Respondent has retained commission due to the Applicant on matters that settled prior to the termination of Consultancy Agreement No. 2. Clearly it is the Respondent’s interpretation of clause 9(e) that it did not have any obligation to pay any monies to the Applicant once the Consultancy Agreement was terminated. [60] If it were otherwise the Respondent would have forwarded monies to the Applicant on an ongoing basis following termination of Consultancy Agreement No. 2 i.e. as and when matters settled. The letter from Grays Professional Services Group (Attachment DB-5 to Exhibit 2) reveals that many of the matters which the Applicant got to the awaiting approval stage have settled, including matters that settled on 17 May 2002, 13 June 2002, 14 June 2002, 19 June 2002, 21 June 2002 and 24 June 2002 i.e. before the termination of Consultancy Agreement No. 2. The retention of such monies based on an interpretation of clause 9(e) of Consultancy Agreement No. 2 makes, in my view, the Consultancy Agreement unfair. [61] It was also the evidence of Ms Tyler that she could not recall any commission being paid to a broker after the termination of their contractual relationship with the Respondent. [62] A reliance on clause 9(e) and clause 9(b)(iiii) in the circumstances of the evidence placed before this Commission to deprive the Applicant of commission which he had earned during the course of Consultancy Agreement No. 2 makes the Consultancy Agreement unfair. [63] The other provision of clause 9 relied upon to entitle the Respondent to withhold commission due and owing to the Applicant is if there was a serious or persistent breach of any of the provisions of Consultancy Agreement No. 2. The Respondent in this regard relies upon clause 6 of Consultancy Agreement No. 2 which provides: “6. Exclusive Devotion The Consultant will not engage in any business or occupation which in the opinion of the Company interferes with the performance of the Consultant’s duties.”. [64] Clause 14 of Consultancy Agreement No. 2 provides that clause 6 is an essential term of the Agreement and that breach of it will entitle the company to rescind the Agreement immediately by giving notice to the Consultant. [65] The Respondent relies upon the referral by the Applicant of a client of the Respondent to Quantum Strategies Australia Pty. Ltd. (Quantum Strategies). It was the evidence of the Applicant that whilst Consultancy Agreement No. 2 was still on foot a client of the Respondent, Ms Toni Jensen, sought to refinance. Her lender at the time was Pioneer Mortgage Services. At the time Ms Jensen spoke with the Applicant the Respondent no longer had an agreement with Pioneer Mortgage Services. It was the Applicant’s evidence that Mr Collison had directed him not to deal with -- 10 of 13 -- 770 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 Pioneer Mortgage Services. Mr Collison denies having given such a directive. In the event that the Respondent would not refinance through Pioneer Mortgage Services then the Applicant stated that he advised Ms Jensen that he would have to refinance her affairs with a lender that had an agreement with the Respondent. The Applicant states that he advised Ms Jensen that this would involve her in being charged a release fee on her current loan. [66] It was the further evidence of the Applicant that he informed Ms Jensen that she could either incur that cost, she could deal with Pioneer Mortgage Services direct or he could refer her to a broker who had a relationship with Pioneer Mortgage Services. The brokerage firm to whom Ms Jensen was referred by the Applicant was Quantum Strategies – a firm that engaged Scott Bradford at that time. It seems that as and from sometime in July 2002 Scott Bradford purchased Quantum Strategies and became the sole shareholder and a director of the company. [67] Given that the Jensen contract was entered into on 3 June 2002 and Attachment GC-2 to Exhibit 9, a letter from Grays Professional Services Group, is dated 25 June 2002 it would appear that the contact of Ms Jensen with the Applicant would have occurred sometime during the period 3 June and 25 June 2002. [68] At the time of the referral by the Applicant of Ms Jensen to Quantum Strategies it does not appear that Scott Bradford had an interest in Quantum Strategies. He was simply engaged by the company at that time. [69] The Applicant at no time went to Mr Collison or Mr Pickering to seek permission from them to refer Ms Jensen to Quantum Strategies. I can however understand why the Respondent would issue a directive to brokers not to use Pioneer Mortgage Services for if it allowed its brokers to obtain finance with Pioneer Mortgage Services it would not have been paid any application fee or brokerage fee for the work undertaken. [70] In the circumstances I am inclined to accept the evidence of the Applicant that such a directive was issued and that he was looking after the interests of the client, Ms Jensen. The Applicant however should have given the Respondent an opportunity to decide whether or not to deal with Pioneer Mortgage Services and forgo any brokerage fee. In the circumstances I am however of the view that the referral of Ms Jensen to Quantum Strategies did not involve the Applicant in a breach of clause 6 of Consultancy Agreement No. 2. [71] The Applicant also during the course of the Consultancy Agreement No. 2 carried out three interviews for his brother with clients of Mr Foster. They were not existing clients of the Respondent. Mr Foster’s evidence was that he had been contacted by Scott Bradford and he had decided to refer some work to Quantum Strategies. The Applicant’s evidence was that he conducted these interviews in his own time to assist his brother. Scott Bradford was unable to meet the clients and the Applicant agreed to stand in for him and interview these clients of Mr Foster. [72] The Applicant confirmed that he did not seek the permission of Mr Collison to conduct these interviews as he didn’t think it was necessary when he conducted them in his own time. The Applicant agreed that he saw Quantum Strategies as a competitor of the Respondent at the time albeit one of “many, many institutions” in the marketplace which were competitors. Once again at the time of these interviews which I understand were conducted in May 2002, Scott Bradford did not have an interest in Quantum Strategies other than as a person engaged by the corporation. [73] Once again I do not accept that the interviewing of persons who were never clients of the Respondent, in his own time, placed the Applicant in breach of clause 6 of Consultancy Agreement No. 2. There was no evidence before me that the interviews with Mr Foster’s clients interfered with the Applicant’s performance of his duties. [74] In those circumstances I conclude that reliance upon clause 9(e) of Consultancy Agreement No. 2 to deprive the Applicant of commission which he had earned in reliance on clause 9(b)(xi) makes clause 9(e) harsh, unconscionable or unfair. [75] Given my findings in this regard I am prepared to amend Consultancy Agreement No. 2 to delete clause 9(e) and clause 9(g). I do not believe that it is necessary to amend clause 9(h) in the manner sought in the application. Order for Payment of Monies [76] Whilst generally I found the Applicant and Scott Bradford’s evidence minimised to some extent the work performed by brokers once the awaiting approval stage had been reached I tend to prefer their evidence as to the entitlement of the Applicant to commission for work performed prior to the termination of Consultancy Agreement No. 2 to that of Mr Collison. [77] Having viewed a number of the files which Mr Collison stated that the Applicant’s commission should be reduced by 70% because of work performed by other brokers following the awaiting approval stage I am unable to conclude that anything like 70% of the file work was performed by others. Mr Collison himself had not performed any work on the files and the persons said to have performed the work were not available to give evidence. Further the Respondent was not able to indicate whether or not any commission had been paid to other brokers on the files that had settled since the termination of Consultancy Agreement No. 2. [78] Mr Collison stated that the Applicant “when paid commissions was paid commissions on the incorrect scale” and that he “received a number of payments of commission on scale B which he was only entitled to receive on scale A”. Given my findings on the December 2001 Schedule One I am unable to accept Mr Collison’s evidence in this regard. I am therefore unable to accept that there was any overpayment to the Applicant whatsoever. [79] I did not find Mr Collison’s response to a question as to why the December 2001 Schedule One was not signed by both parties to be acceptable particularly when Consultancy Agreement No. 2 specifically provides for any variation to be signed by both parties. Generally as to the evidence surrounding the December 2001 Schedule One I prefer the evidence of the Applicant and Scott Bradford where that evidence differs to that of Mr Collison. [80] I also find Mr Collison’s evidence that Scott Bradford had been “demoted” to be unreliable. I prefer the evidence of Mr Hughes, Scott Bradford and the Applicant in that regard. [81] I also find Mr Collison’s reason for the termination of Consultancy Agreement No. 2 difficult to accept. In paragraph 12 of Exhibit 9 Mr Collison states that: “… I recall that information came to my attention which suggested to me that the Applicant had been engaging in activities in breach of the terms and conditions of his contract of engagement. I was particularly concerned when a facsimile arrived at the office on 25 June 2002 indicating that a repeat client was obtaining refinance elsewhere. When this was brought to my attention, this led me to believe that the Applicant had been diverting away business opportunities from Collison Finance & Investments because the client concerned, Ms Jensen had entered into the contract on 3 June whilst the Applicant was still engaged under the terms of the Consultancy Agreement … On this basis, the Applicant’s employment was summarily terminated by letter dated 24 June 2002.”. -- 11 of 13 -- 6 December, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 771 [82] Now the letter of summary termination was dated 24 June 2002 i.e. a day prior to the first opportunity that Mr Collison could have had his attention drawn to the correspondence from Grays Professional Services Group which was dated 25 June 2002 and faxed on that date. How this fact could have formed the basis for the summary termination of the Applicant is difficult to understand. [83] I have had provided to me an updated claim by the Applicant following the evidence in these proceedings. The Applicant seeks an amount of $47,140 which is particularised as follows:- Client Name Applicant Claim Respondent’s Position on Claim Troia 1,800 Full & Unconditional approval at time of termination Gannon 1,800 Full & Unconditional approval at time of termination Hudson 1,350 Full & Unconditional approval at time of termination Craig 1,800 Not approved by Applicant and a broker reassigned Lakasas 900 Full & Unconditional approval at time of termination McElwee 1,800 Not approved by Applicant and a broker reassigned Pullin 1,350 Not approved by Applicant and a broker reassigned Thaller 1,800 Full & Unconditional approval at time of termination Stewart & O’Connor 1,800 File approved by Applicant and approval lapsed Lowe 1,600 Was a client of Scott Bradford and not Applicant Leonard 1,800 File approved by Applicant and approval lapsed Spittle & Burrows 1,000 File approved by Applicant and approval lapsed Cassidy & Ebert 1,800 Full & Unconditional approval at time of termination Cartledge 1,350 File approved by Applicant and approval lapsed Leske 1,800 File approved by Applicant and approval lapsed Baker & Singleton 1,800 File approved by Applicant and approval lapsed Dickens 1,800 Not approved by Applicant and a broker reassigned. This file settled on 5 July, 2002 ie 3 days after Termination of Consultancy Agreement No. 2. Wallace 1,350 File approved by Applicant and approval lapsed Thomas 450 Already paid $1,350 on 11 June 2002 Watson & Hayward 550 Full & Unconditional approval at time of termination. No Application fee was received by Respondent therefore Incorrect fee claimed by Applicant. Should be $350 Biviano & Delosa 1,800 File approved by Applicant and approval lapsed Ward 600 Not approved by Applicant and a broker reassigned Marland 350 No fees have been received by the Respondent O’Donnell 1,590 Full & Unconditional approval at time of termination Mason 1,800 Purchase was terminated. Refinance only with reduced fees paid to Respondent DeJager 1,350 File approved by Applicant and approval lapsed Stewart 1,350 Not approved by Applicant and a broker reassigned Turner 1,800 Not approved by Applicant and a broker reassigned McGovern 2,050 Not approved by Applicant and a broker reassigned Ireland 1,600 Not approved by Applicant and a broker reassigned Laferla 1,350 File approved by Applicant and approval lapsed [84] The evidence was clear that the catalyst for payment of commission to a broker was the settlement of the matter and the receipt by the Respondent of the application fee and brokerage. In that regard the Respondent says that no part of the file has yet settled in respect of the following matters: DeJager, Stewart, Turner, McGovern, Ireland and Laferla. [85] Whilst I accept that some work would have been undertaken by another broker where a file, having been approved during the currency of Consultancy Agreement No. 2 but subsequently lapsed, I do not intend to reduce the amount of commission payable to the Applicant for those files. I do this because it was the Respondent who put it out of the ability of the Applicant to perform the necessary work to have the matter proceed. The Respondent did this by terminating the Consultancy Agreement No. 2. [86] As for those files which were not approved at the time of the termination of Consultancy Agreement No. 2 and which required the assignment of a broker to complete the file, I am prepared to reduce the amount of commission payable to the Applicant by 20%. Whilst I am loathe to do this in the absence of any evidence that other brokers have been paid any commission I am satisfied that other brokers would have been required to work on these files. I exclude the file of Dickens from this deduction. [87] Thus the commission payable in respect of the Craig, McElwee, Pullin and Ward files will be reduced by 20%. [88] The commission payable in respect of the Dejager and Laferla files will not be included as no part of these files has been settled. I do however order that as and when those matters settle the Respondent is to pay the Applicant the monies outlined in the Schedule above within seven (7) days of settlement of those files ie $1,350 on each file. The commission payable in respect of the Stewart, Ireland, McGovern and Turner files will also not be included as no part of these files have been settled. Instead I order that as and when those matters settle the Respondent pay to the Applicant the monies claimed by the Applicant which are outlined in the above Schedule, less 20%, within seven (7) days of settlement of those files ie $1,080, $1,280, $1,640 and $1,440 respectively. [89] The Respondent claims that the Lowe file was that of Scott Bradford rather than the Applicant. The Applicant did however work on the file prior to the termination of Consultancy Agreement No. 2. In the circumstances I will reduce the claim of $1,600 by 30%. [90] As to the Thomas file, the Respondent states that the Applicant has been paid $1,350 for this matter. The Applicant however asserts that there is still an amount of $450 owing in respect of file number 7041. I allow this claim. [91] In respect of the remaining files I order the Respondent to pay to the Applicant an amount of $33,800.00 by close of business on Friday, 27 December 2002. Particulars of this amount are as follows:- -- 12 of 13 -- 772 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 6 December, 2002 Client Name Applicant Claim Comment Troia 1,800 Gannon 1,800 Hudson 1,350 Craig 1,440 Less 20% Lakasas 900 McElwee 1,440 Less 20% Pullin 1,080 Less 20% Thaller 1,800 Stewart & O’Connor 1,800 Lowe 1,120 Leonard 1,800 Spittle & Burrows 1,000 Cassidy & Ebert 1,800 Cartledge 1,350 Leske 1,800 Baker & Singleton 1,800 Dickens 1,800 Wallace 1,350 Thomas 450 Watson & Hayward 550 Biviano & Delosa 1,800 Ward 480 Less 20%. Applicant’s claim is for $600 whilst Respondent suggests it would be $1,000 Marland 350 O’Donnell 1,590 Mason 1,350 Restraint of Trade Provisions in Consultancy Agreement No. 2 [92] The Applicant also seeks the deletion of various parts of Clause 10 of Consultancy Agreement No. 2 i.e. the restraint of trade clause. There was no evidence before me that this clause was inhibiting the Applicant in obtaining a reasonable remuneration. I therefore do not intend to interfere with that clause in Consultancy Agreement No. 2 and leave that to another jurisdiction should the matter need to be further litigated. Order Accordingly. Appearances: Mr J. Shepley, instructed by Primrose, Couper, Cronin, Rudkin Solicitors, for D.M. LINNANE, Vice President. the Applicant. Mr J. Logan SC, instructed by Nicol, Robinson, Halletts Lawyers, for the Hearing Details: Respondent. 2002 19, 21 - 23 November Released: 27 November 2002 ########################################################################################################################## # -- 13 of 13 --