Federal Circuit and Family Court of Australia
(DIVISION 2)
Belcher v Scruton Property Pty Ltd [2022] FedCFamC2G 180
File number(s): BRG 222 of 2020 Judgment of: JUDGE TONKIN Date of judgment: 19 April 2022 Catchwords: INDUSTRIAL LAW – Whether employment relationship existed – whether respondent in breach of Fair Trading Act-whether respondent in breach of statutory contract – application dismissed Legislation: Corporations Act 2001 (Cth)
Fair Work Act 2009 (Cth)
Cases cited: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
BP (Refinery) Westernport Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Brunette v Integral Energy Australia [2003] NSWIR Comm 324
Byrne & Anor v Australian Airlines Limited (1995) 185 CLR 410
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Collins v Trimatic Contract Services Pty Ltd & Ors (No 5) [2019] FCCA 1018
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169
Hawkins v Clayton (1988) 164 CLR 539
Hollis v Vabu Pty Ltd [2001] HCA 44
Kelly v Commissioner of Taxation [2013] FCAFC 88
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
Division: Division 2 General Federal Law Number of paragraphs: 176 Date of last submission/s: 25 November 2021 Date of hearing: 19- 21 October 2021 Place: Brisbane Counsel for the Applicant: Mr Amerena Solicitor for the Applicant: Workplace Law Group Counsel for the Respondent: Mr Hogg Solicitor for the Respondent: McInnes Wilson Lawyers ORDERS
BRG 222 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: GUY ANDREW BELCHER
Applicant
AND: SCRUTON PROPERTY PTY LTD ACN 620 687 292
Respondent
order made by:
JUDGE TONKIN
DATE OF ORDER:
19 April 2022
THE COURT ORDERS THAT:
1.The amended originating application and statement of claim filed on 12 February 2021 be and is hereby dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE TONKIN
Introduction
The applicant Guy Belcher filed an originating application on 16 April 2020 seeking declarations alleging that the respondent Scruton Property Group Pty Ltd (“Scruton Property”) contravened the Fair Work Act 2009 (Cth) (“FWA”) in failing to pay the applicant for work performed between June 2017 and 29 June 2018 and additional entitlements. He sought to recover all accrued salary and bonuses in accordance with section 323 (1) of the FWA $80,769 plus interest, his leave entitlements of $5769.23 plus interest,…
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Details
- Case
- [2022] FedCFamC2G 180
- Decision Date
CaseChat Overview and Summary
In Belcher v Scruton Property Group Pty Ltd, the applicant, Guy Belcher, sought relief from the Queensland Civil and Administrative Tribunal (QCAT) for alleged unpaid work performed for the respondent, Scruton Property Group Pty Ltd. Belcher claimed that he had performed work for Scruton Property over a period, which he asserted constituted employment under the Fair Work Act 2009 (Cth) or a breach of statutory contract under the company's constitution. Scruton Property argued that Belcher was not an employee and did not volunteer for remuneration, denying any breach of statutory contract.
The primary issue was whether Belcher performed work for Scruton Property and, if so, whether he was an employee or merely a volunteer. If Belcher was an employee, the court needed to determine whether Scruton Property contravened the Fair Work Act. If Belcher was not an employee, the court had to decide whether he was entitled to remuneration for "other work" under the company's constitution, and if so, how that remuneration should be assessed. Belcher relied on extensive affidavits and personal experience to argue his case, while Scruton Property countered with evidence and legal precedents arguing against any obligation to pay Belcher.
The court found that Belcher had indeed performed some work for Scruton Property but concluded that no employment relationship existed between the parties. The court noted that Belcher volunteered to perform the work and did not request remuneration, and no formal resolution on remuneration for "other work" was made as required by the company's constitution. The court held that Belcher could not prove a breach of statutory contract as he did not specify the nature and extent of the work performed, nor could it determine what constituted "reasonable wages." Consequently, the application was dismissed.
The final orders of the tribunal reflect the conclusion that Belcher's claims for unpaid work and breach of statutory contract were unfounded. Scruton Property was not required to pay any remuneration to Belcher for the work performed.
The primary issue was whether Belcher performed work for Scruton Property and, if so, whether he was an employee or merely a volunteer. If Belcher was an employee, the court needed to determine whether Scruton Property contravened the Fair Work Act. If Belcher was not an employee, the court had to decide whether he was entitled to remuneration for "other work" under the company's constitution, and if so, how that remuneration should be assessed. Belcher relied on extensive affidavits and personal experience to argue his case, while Scruton Property countered with evidence and legal precedents arguing against any obligation to pay Belcher.
The court found that Belcher had indeed performed some work for Scruton Property but concluded that no employment relationship existed between the parties. The court noted that Belcher volunteered to perform the work and did not request remuneration, and no formal resolution on remuneration for "other work" was made as required by the company's constitution. The court held that Belcher could not prove a breach of statutory contract as he did not specify the nature and extent of the work performed, nor could it determine what constituted "reasonable wages." Consequently, the application was dismissed.
The final orders of the tribunal reflect the conclusion that Belcher's claims for unpaid work and breach of statutory contract were unfounded. Scruton Property was not required to pay any remuneration to Belcher for the work performed.
Orders
Orders of the court
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Background
Background to the litigation
In written submissions the applicant sought relief under the FWA, or in the alternative, relief for breach of statutory contract. The quantum meruit claim was not pressed.[1] The respondent sought the application be dismissed. [1] Applicant’s written submissions filed 18 November 2021 at [31]Facts not Disputed The applicant Guy Belcher:(a)was at all material times a director of BeautyFULL CMC Pty Ltd (trading as BeautyFULL Cosmetic Medical Clinic) (“BeautyFULL”) from 5 January 2012 to 17 July 2018; (b)was at all material times a director and secretary of Cosmetic Skin Therapies Pty Ltd (“CST”) from 21 March 2016 to 17 July 2018; and(c)is and was at all material times an individual able to sue and be sued. The respondent Scruton Property Group Pty Ltd (ACN 620 686 292) (“Scruton Property”) is and was at all material times:(a)A corporation registered under the Corporations Act 2001 (Cth);(b)Registered on 26 July 2017;(c)able to sue and be sued;(d)a company whose secretary was appointed as Mark Scruton Sowden (“Mark”);(e)a company whose directorship includes:(i)Margaret Scruton (“Margaret”);(ii)Mark Scruton Sowden;(f)a company whose previous directorships included:(i)Kate Scruton Belcher (“Kate”) between 26 July 2017 and 17 September 2018; and(ii)Guy Belcher (“the applicant”) between 26 July 2017 and 28 June 2018;(g)a company since 29 November 2017 that was the registered owner of 1024 Logan Road Holland Park West more specifically described as Lot 9 on Registered Plan 811608 in the Local Government area of Brisbane City (“1024 Logan Road”); and(h)a company since 1 February 2018 that was the registered owner of 29 Lamette Street Holland Park more specifically described as Lot 10 on Registered Plan 44087 in the Local Government area of Brisbane City (“29 Lamette Street”) Margaret and Kate were directors and shareholders of BeautyFULL CMC Pty Ltd (trading as BeautyFULL Cosmetic Medical Clinic) (“BeautyFULL”) during the period July 2017 to 18 June 2018. Margaret is the mother of Kate and Mark. Guy Belcher married Kate on 26 February 2011 and the parties separated on or about 18 June 2018.Issues The following issues require determination:(a)Did the applicant perform work for the respondent and if so what work was performed for the respondent over what period;(b)When performing work during the relevant period was the applicant an employee of the respondent;(c)If so, did the respondent contravene the Fair Work Act 2009 (Cth) as asserted by the applicant; (d)If not an employee of the respondent was the respondent in breach of a statutory duty under the company’s constitution;(e)If so was the applicant entitled to remuneration under the respondent’s constitution for the performance of “other work” undertaken by the applicant; and(f)If so, how should remuneration for “other work” undertaken by the applicant be assessed. Evidence The applicant Guy Belcher relied on his affidavits filed on 11 January 2020 (some 580 paragraphs), on 16 April 2020 and on 21 August 2020. He was cross examined at length. He confirmed he held a Bachelor of Business (Accounting with Banking & Finance) degree and in 2012 became a Certified Practising Accountant. In 2010 he was employed as an accountant for WorkCover Queensland and through his employment he was involved in commercial lease matters and worked closely with the property team at WorkCover Queensland.
Evidence
Evidence Before The Court
The following issues require determination:(a)Did the applicant perform work for the respondent and if so what work was performed for the respondent over what period;(b)When performing work during the relevant period was the applicant an employee of the respondent;(c)If so, did the respondent contravene the Fair Work Act 2009 (Cth) as asserted by the applicant; (d)If not an employee of the respondent was the respondent in breach of a statutory duty under the company’s constitution;(e)If so was the applicant entitled to remuneration under the respondent’s constitution for the performance of “other work” undertaken by the applicant; and(f)If so, how should remuneration for “other work” undertaken by the applicant be assessed. Evidence The applicant Guy Belcher relied on his affidavits filed on 11 January 2020 (some 580 paragraphs), on 16 April 2020 and on 21 August 2020. He was cross examined at length. He confirmed he held a Bachelor of Business (Accounting with Banking & Finance) degree and in 2012 became a Certified Practising Accountant. In 2010 he was employed as an accountant for WorkCover Queensland and through his employment he was involved in commercial lease matters and worked closely with the property team at WorkCover Queensland. He gave evidence that he had experience in building and renovations and completed three residential constructions in 2009 and 2010 when he was the owner builder of 142 Queensport Road, Murarrie in Queensland. He was assisted by his father. In 2015 the builder contracted to construct the home for the applicant and his then wife Kate at 76 Stanmere Street, Carindale in Queensland went into liquidation and he completed most of the works on that property including demolition, subdivision and general building works. He engaged trades as needed and organised and discussed jobs with those tradesmen. In mid - 2017 he took annual leave and long service leave from WorkCover. Purchase of commercial premises From 2010 the applicant was managing director of BeautyFULL Cosmetic Medical Clinic (“BeautyFULL”) a cosmetic injectables business run by his wife Kate a nurse and her mother Margaret a medical practitioner who were also directors. In early 2017 it is common ground that the lease for premises from which BeautyFULL operated was ending and those premises were no longer meeting the business’s requirements. The applicant said in June 2017 he had a conversation with Margaret, Kate and Mark regarding the need to find alternative premises from which BeautyFULL could operate in circumstances where the lease for the premises was due to end. The applicant said he had attempted to negotiate with the original landlord about obtaining additional space for BeautyFULL but those negotiations were unsuccessful. According to the applicant Margaret indicated that “she was happy to purchase a new commercial premise for BeautyFULL to run its business from.” The new premises would be owned by her (or an entity owned by her) and BeautyFULL would lease the newly purchased premises back from Margaret (or an entity owned by her) at market value.
Decision
Reasons for decision
The respondent argued in the alternative that should the court find that clause 88 does create a contractual right on its own for directors to be paid remuneration, the clause must be void for uncertainty it being an essential term to an employment contract that the parties have agreed on wages: Brunette v Integral Energy Australia [2003] NSWIR Comm 324 at [87]. Counsel argued that the applicant seeks to avoid the need for certainty by saying that a term can be implied into the respondent’s constitution that directors are entitled to “reasonable remuneration” however the term cannot be an implied term. The respondent relied on the decision in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [29] where the High Court said “the ‘necessity’ which will support an implied term in law is demonstrated where absent the implication ‘the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless or perhaps seriously undermined.” The implication of the contended term that an employee will be paid reasonable wages is not a duty and cannot be implied at law nor can the term be implied in fact either. The requirements for a term to be implied are set out in BP (Refinery) Westernport Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. In Byrne & Anor v Australian Airlines Limited (1995) 185 CLR 410 at 422 the court cited with approval the decision of Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 573 to the effect that BP (Refinery) Westernport Pty Ltd v Shire of Hastings (supra) criteria for implying a term into a contract should be avoided where there is no formal contract. The respondent contends that this statement would not apply in the applicant’s case as the respondent’s contract is a formal contract between the parties and the criteria espoused in BP (Refinery) Westernport Pty Ltd v Shire of Hastings would operate. I find this unnecessary to answer. Conclusion I rely on my findings in the judgment. The applicant exaggerated the work he performed on the improvements on the Logan Road premises. Though he performed some work I am unable to determine what work was performed and the amount of work performed for Scruton Property. I have found that no employment relationship existed between the applicant and Scruton Property with respect to any work performed and have found that the applicant volunteered to perform work for Scruton Property. I have found that the applicant made no request for remuneration for any work performed including any accounting work. No general meeting was held to resolve what constituted remuneration for other work performed as required by clause 85. Though pursuant to clause 88 a director was entitled to be remunerated for other work, I am unable to quantify the “other work” performed nor determine what would constitute “reasonable wages.” I am not satisfied that the applicant has proved a breach of statutory contract. That application is dismissed.
Ratio Decidendi
Legal Principle Established
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