Boyd v Glenvill Pty Ltd
[2021] FCCA 265
•23 FEBRUARY 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Boyd v Glenvill Pty Ltd [2021] FCCA 265
File number(s): MLG 1676 of 2019 Judgment of: JUDGE A KELLY Date of judgment: 23 February 2021 Catchwords: INDUSTRIAL LAW – adverse action – whether applicant had been dismissed from employment while on sick leave by reason that he had made inquiries and complaints in relation to claims for accrued commission in contravention of s 340 of Fair Work Act 2009 (Cth) – whether applicant had been dismissed because he had been temporally absent from work because of illness in contravention of s 352 of Act – whether respondent had failed to pay amounts payable to applicant in relation to performance of work in contravention of s 323 of Act – whether presumption displaced that dismissal was taken for proscribed reasons as alleged – whether the proscribed reasons were a substantial and operative reason for termination – where focus of inquiry is upon reasons of decision-maker at time of adverse action – where decision made by a diverse number of persons – where failure to call evidence unexplained – whether inference was open that uncalled evidence would not have assisted respondent’s case – where inference arose in context that respondent bore onus – where inference open in deciding whether reasonable to accept evidence of denial that proscribed reason was not a reason for termination – application upheld as to complaint and inquiry as to withholding of monies – application as to dismissal by reason of temporary absence dismissed - application as to contravention for failure to pay monies in full upon termination upheld.
INDUSTRIAL LAW – whether remedies of reinstatement or compensation appropriate – applicable principles – reinstatement ordinarily to be granted in appropriate case – reinstatement refused – measure of compensation for economic loss and general damages – failure to mitigate – discount for vicissitudes – compensation awarded.
CONTRACT – claim for accrued commissions – whether entitlement to commission crystallises at time of applicable third-party contract, annually or on a cumulative basis over period of employment – proper construction of contract – applicable relief – whether relief is in debt or damages.
Legislation: Fair Work Act 2009 (Cth), ss 3, 323, 324, 336, 340, 341, 342, 352, 360, 361, 392, 545, 547
Long Service Leave Act 2018 (Vic)
Edelman, James, McGregor on Damages (Sweet & Maxwell, 21st ed, 2021)
Sappideen, Carolyn et al, Macken’s Law of Employment (Thomson Reuters, 8th ed, 2016)
Cases cited: AGL Victoria Pty Ltd v SPI Networks (Gas) Pty Ltd (formerly TXU Networks (Gas) Pty Ltd [2006] VSCA 173
Australian Building and Construction Commissioner v
Bauer Consumer Media Ltd v Evergreen Television Pty Ltd [2017] FCA 507; (2017) 349 ALR 679
Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500
Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288
Commonwealth Bank of Australia v Barker (2013) 214 FCR 450
Construction Forestry Mining Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273
Construction Forestry Mining Energy Union v BHP Coal (No 3) [2012] 228 IR 195
Construction Forestry Mining Energy Union v Clermont Coal Pty Ltd [2015] FCA 1014
Construction Forestry Mining Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2012] 253 IR 391
Construction, Forestry Mining and Energy Union vEndeavour Coal Pty Ltd [2015] FCAFC 76; (2015) 231 FCR 150
Construction, Forestry, Maritime, Mining and Energy Union v Melbourne Precast Concrete Nominees Pty Ltd (No 2) [2020] FCA 1215
Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 314 ALR 1; 88 ALJR 980; (2014) 253 CLR 243
Dalfallah v Fair Work Commission (2014) 225 FCR 559
Dutta v Telstra Corporation Ltd [2019] FCAFC 103
Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (Hutchison Ports Appeal) [2019] FCAFC 69
General-Motors Holden Ltd v Bowling (1976) 51 ALJR 235
Harding v Harding (1928) 29 SR NSW 96
Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34
Ho v Powell [2001] NSWCA 168; (2001) 51 NSWLR 572
Independent Education Union v The Geelong Grammar School [2000] FCA 557
Kennewell v Atkins T/as Cardinia Waste & Recyclers [2015] FCA 716
Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
O’Donnell v Reichard [1975] VR 916
PIA Mortgage Services Pty Ltd v King (2020) FCR 225
Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118
Richardson v Oracle Corporation Australia Pty Ltd (2014) 223 FCR 334
Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407
Rumble v Partnership (t/as HWL Ebsworths) [2020] FCAFC 37; (2020) 275 FCR 423
Sayed v Construction, Forestry, Mining and Energy Union [2012] 228 IR 195
Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121
Shea v TRU Energy Services Pty Ltd (No 6) (2014) 314 ALR 346
Slonim v Fellows (1984) 154 CLR 505
Smith v New South Wales Bar Association (1992) 176 CLR 256
Sperandio v Lynch (No 2) [2006] FCA 1838
State of Victoria (Office of Public Prosecution) v Grant [2014] FCAFC 184; (2014) 246 IR 441
Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181
Wynn v New South Wales Insurance Ministerial Corp (1995) 184 CLR 485
Number of paragraphs: 650 Date of last submission/s: 29 January 2021 Dates of hearing: 21, 22, 23 December 2020, 28 January 2021 Place: Melbourne Counsel for the Applicant: Mr Jack Tracey Counsel for the Respondent: Mr Joseph D’Abaco Solicitor for the Respondent: Mark Caldwell Solicitor for the Applicant: Grice Legal ORDERS
MLG 1676 of 2019 BETWEEN: ROSS BOYD
Applicant
AND: GLENVILL PTY LTD (ACN 150 874 356)
Respondent
ORDER MADE BY:
JUDGE A KELLY
DATE OF ORDER:
23 FEBRUARY 2021
THE COURT ORDERS THAT:
1.The questions posed for determination be answered as follows:
Contravention of section 340 – Termination
Ques 1.Did the respondent contravene s 340 of the Fair Work Act 2009 (Cth) (Act) in terminating the employment of the applicant? In particular, was the adverse action in the form of the dismissal taken because, or for reasons including that, the applicant exercised his workplace right to complain or inquire about his allegedly unpaid commissions?
Answer:Yes.
Contravention of section 352 – Termination of employment – Absence from work due to illness or injury
Ques 2.Did the respondent contravene s 352 of the Act in terminating the employment of the applicant? In particular, was the adverse action in the form of the dismissal taken because, or for reasons including that, the applicant was temporarily absent from work due to illness or injury, within the meaning of that section?
Answer:No.
Contravention of section 323(1) – Deduction of final pay
Ques 3.Did the respondent contravene s 323(1) of the Act in making deductions from the applicant’s final pay upon termination of his employment?
Answer:Yes.
Remedies – Reinstatement/Compensation
Ques 4.In the event of a contravention of any of these provisions of the Act, what remedy should be ordered (reinstatement and/or compensation?).
Answer:Pursuant to ss 545 and 547 of the Act, compensation in the sum of $110,000 together with all interest thereon from 28 May 2019 to judgment, such interest to be determined by agreement, and failing agreement upon the papers (with each party to submit a minute of consent order, alternatively, within fourteen days hereof a single page submission as to the computation of interest).
Proper construction of clause 6 and schedule 1 – Sales commission
Ques 5.In respect of the Employment Agreement between the applicant and the respondent, and more specifically the applicant’s entitlement to sales commissions detailed in clause 6 and schedule 1 thereof:
(a)What is the proper construction of clause 6 and schedule 1 of the Employment Agreement?
(b)As regards the applicant’s sales commission entitlement -
(i)is the applicant’s entitlement to sales commissions to be calculated and paid on an annual basis, less the amount of the annual retainer paid to the applicant; or,
(ii)is the applicant’s entitlement to sales commissions to be calculated as a cumulative total for any unpaid period as at the date when the applicant makes a claim for commission from the respondent, less the amount of the annual retainer paid to the applicant in that period?
(c)What is the quantum of the applicant’s sales commission entitlement, if any, and what discounts given by the respondent to customers are to be taken into account in determining that quantum?
Answers. (a) Inappropriate to answer.
(b)(i) Save that no Sales Commissions were payable to the applicant in any calendar year until the amount of such commissions exceeded his Retainer (as defined), and as paid to that point in such year, the applicant’s entitlement to Sales Commissions accrued: (1) upon execution of the PA2 agreements upon which the commissions were claimed and payment of a deposit equal to 5% of the total cost of works as specified by such agreement, and; (2) in each year, as and whenever the sum of such commissions exceeded the sum of the Retainer that had been paid to that point. Otherwise, such commission was payable within 14 days of approval by the respondent’s General Manager, Housing, such approval having been given on 19 July 2018 in respect of the applicant’s claims for commissions as accrued for the years 2014, 2015 and 2016 respectively.
(ii) No.
(c)Unnecessary to answer.
Damages
Ques 6.Is the applicant entitled to damages or an order for payment of sums due, in respect of unpaid sales commissions?
Answer:Subject to the question of election between remedies in debt or damages, the applicant is entitled to an order for payment of the sums due in respect of sales commissions for each of the years 2014, 2015 and 2016 respectively.
Declarations and orders
2.Declare that the respondent contravened s 340 of the Act in that it took adverse action against the applicant because he had a workplace right by reason that he was able to make a complaint or enquiry to the respondent in relation to the sales commissions accrued in his employment.
3.Declare that the respondent contravened s 323 of the Act in that it withheld from the applicant a sum of $12,846 on 7 March 2019 when terminating his employment being an amount payable to the applicant in full in relation to the performance of his work.
4.The application for a declaration for contravention of s 352 of the Act be dismissed.
5.The applications for reinstatement and all related ancillary relief are dismissed.
6.Pursuant to s 545 of the Act, the respondent pay as compensation to the applicant $110,000.
7.Pursuant to s 547 of the Act, the respondent pay the applicant pre-judgment interest on the said sum of $110,000 and upon the sum of $12,846 (being the sum withheld by the respondent from 7 March 2019 until shortly prior to the final hearing of this proceeding).
8.Subject to paragraphs 9-11 of this Order, the respondent pay the applicant the sums due in respect of the claims for commission the subject of this proceeding in respect of sales achieved in the years 2014, 2015 and 2016 as embodied in the parties’ Scott schedule in this proceeding.
9.Pursuant to s 547 of the Act, the respondent pay the applicant pre-judgment interest on the sums due to the applicant in respect of the aforesaid claims for commission.
Directions
10.By 4:00pm on Tuesday, 9 March 2021, the parties confer as to the sums due pursuant to paragraphs 8-9 of this Order by way of pre-judgment interest upon the said sums of $110,000 and $12,846 and upon the commissions due as provided by this Order and with the aim of providing the court with agreed proposed orders as to such sums.
11.Should the parties be unable to agree on the amounts of pre-judgment interest, by 4:00pm on Tuesday, 9 March 2021, the parties are to file submissions (not exceeding one page), with the question of pre-judgment interest to be determined on the papers.
12.Should the parties be unable to agree upon the sums due in respect of the claims for commission the determination as to the quantum of such claims be adjourned for hearing of submissions during the further hearing upon penalties on 26-27 April 2021.
13.By 4:00pm on Tuesday, 9 March 2021, the parties confer as to the directions to be made with respect to the filing and service of any further affidavits, a minute of proposed orders and submissions upon which they intend to rely at the hearing on the matter of penalty.
14.The costs of and incidental to the hearing on liability issues be reserved.
REASONS FOR JUDGMENT
Judge A Kelly
Introduction
These reasons for judgment explain my conclusions respecting issues of liability arising from disputes in relation to the applicant’s claims for commission, the termination of his employment and ancillary claims for relief under the Fair Work Act 2009 (Cth) (Act). The parties agreed that questions of penalties should be addressed separately.
The applicant was employed by the respondent from March 1998 until the respondent terminated his employment by letter dated 7 March 2019 at a time when he was on sick leave. For much of those two decades the parties had enjoyed a relatively good relationship with the applicant regarding the respondent’s business as being a terrific place to work and in which employees were treated as family. The applicant’s current contract of employment conferred certain entitlements to a base salary together with sales’ commission. At his election, and without any demur from the respondent, he accumulated such accrued commissions over the period 2013 – 2018. He then sought to be paid such entitlements and in doing so sought and obtained the approval of the respondent’s then General Manager for those claims for commission. Over the period mid-2018 – early 2019, the applicant sought payment his accrued commissions. Despite the approval of the General Manager, the respondent’s Chief Financial Officer took another view and resisted payment of the claims over a period of many months.
When the applicant sought to bypass the CFO and seek resolution of the issue, he approached the respondent’s owner and CEO, Mr Len Warson, who, it was hoped, would intercede on his behalf to resolve the matter. Following the intervention of the applicant’s lawyers, the respondent’s more recently appointed General Manager, Mr Leigh Squarci, also became involved. The parties adopted opposed views as to the proper construction of the contractual provisions which governed the entitlement to commission. The commissions were not paid, and Mr Warson, who described himself as an empathic person who ran a company where people were treated like family ultimately responded with advice that the applicant was not owed money but was in fact substantially indebted to the respondent. Contextually, Mr Warson volunteered that his CFO usually ran the numbers in his employer’s favour.
At the same time, the residential sales division of the respondent’s business in which the applicant had been employed for a substantial time had faced an enduring period of economic decline. It was for this reason that the respondent had appointed Mr Squarci as its new General Manager to two of its divisions and who was asked to conduct a review of those businesses. Unbeknown to the applicant, the review undertaken by Mr Squarci resulted in recommendations to the respondent’s board for a wholesale restructure of the residential sales division of the respondent’s business, including that a large number of sales personnel, including the applicant should be dismissed.
By December 2018, the parties had reached an impasse upon the resolution of the issues in dispute concerning the applicant’s claims for commission. In January 2019, and after seeking resolution of his claims for commission over many months, the applicant, when asked to undertake a particular sales presentation in relation to a new product line that had been developed by the respondent to be known as the Collections series, advised his sales and marketing manager and direct report, Mr Chris Bolanis, that he would not assist further in the presentation while his claims to commission were unresolved. Mr Bolanis, who considered that involvement in relation to the Collections series was beyond the scope of the applicant’s position description, sympathised with the position that had been adopted by the applicant. After pursuing his claims for some eight or nine months, the applicant became increasingly stressed and, after consulting a medical practitioner, took a period of leave, providing medical certificates to his employer. While the applicant was on sick leave, by letter dated 7 March 2019 the respondent gave notice pursuant to clause 21.2 of the parties’ employment contract terminating the applicant’s employment with immediate effect. Although the respondent paid the applicant the amount which it considered represented his accrued entitlements, a sum of $12,846 was withheld on the stated basis that it represented the “recovery of overpaid retainer.” Thus, having rejected the applicant’s claims for commissions of ~$110,000, the respondent asserted that he was indebted to his employer. Shortly before the date of trial, the respondent had accepted this claim and reimbursed the applicant for the sum of $12,846 described above.
The parties also dispute the quantum of the claims for commission, with the applicant initially claiming a sum of ~$110,000 and interest and the respondent contending it had no liability, but if such liability be established, that his outstanding commission entitlements were limited to the sum of $8,182 or, alternatively, $38,358. Further, the applicant sought reinstatement or, alternatively, compensation of ~$660,000.
In summary, for the reasons that follow, I have concluded as follows. As concerns the primary claim for adverse action, the respondent has not displaced the presumption established by s 361(1) of the Act that it took the action of terminating the applicant’s employment by reason that he had made inquiries or complaints respecting his claims for accrued commission. Contrastingly, I was not persuaded that a substantial and operative reason for such dismissal on 7 March 2019 was because the applicant had been temporally absent from work or that the respondent contravened s 352 of the Act for that reason. The respondent effectively conceded a contravention of s 323(1) of the Act in withholding from the applicant the sum of $12,846 as evidenced by its letter of termination. Reinstatement is not an appropriate remedy in this case. An award of compensation should be made, with interest, pursuant to ss 545(2)(b) and 547 of the Act. While it is not appropriate to provide an answer to the open-ended question as to the proper construction of the parties’ employment agreement, these reasons will explain that as concerns the claim for accrued commission, I consider that the respondent adopted an untenable construction of the provision in withholding from the applicant the commissions which had been earned from the sale of display homes to the respondent’s customers over the period 2014 – 2016. The entitlement to commissions crystallised in each year once the amount of such commissions exceeded the sum of the applicant’s Retainer from time to time. The applicant was entitled to payment of sales commission within 14 days of such commission being approved by the General Manager, Housing. This primary entitlement was not constrained upon whether the subject building contracts became unconditional. The calculation of the entitlement to commission was affected by certain discounts. In my opinion, in those cases where the conditions upon which they had been granted were observed, 20% of those discounts were to be deducted from the total cost of the works as specified in the PA2 agreements referred to below. By contrast, in those cases where the conditions were not observed or had expired and other members of the respondent’s staff or management agreed to grant such discounts for the purpose of securing the customer’s execution of a HIA contract (notwithstanding that the subject conditions had not been complied with or had expired), such discounts were not to be taken into account for the purposes of the calculation of commission. Finally, as the parties agreed in closing submissions, the quantum of the unpaid commissions fall to be resolved in accordance with these reasons and, absent agreement, will be determined upon further submissions. It is agreed that questions of penalty be determined separately.
Procedural history
On 28 May 2019, the applicant commenced a proceeding in the fair work division of this court seeking orders for the payment of his commissions together with relief under the Act, including for the reinstatement of his employment or, alternatively, compensation and damages with ancillary relief.
By his amended claim, the applicant advanced the following contentions: (a) the real reason for his dismissal on 7 March 2019 included that he had made complaints or enquiries in relation to his employment respecting unpaid commissions (then said to be $111,889) and that he had been temporally absent from work due to illness or injury; (b) before that date his work performance had never been called into question and it had never been alleged that he had engaged in any form of misconduct (and neither of such issues had been relied upon in the respondent’s letter of termination); (c) the dismissal had occurred in circumstances where the applicant had been absent from his employment for approximately one month before his dismissal; (d) the applicant had made substantial claims for paid commission which, it was said, the respondent had refused to acknowledge or pay; (e) by making the complaints or enquiries about his unpaid commissions the applicant had exercised workplace rights or made complaints or enquiries in relation to his employment within the meaning of s 341 of the Act; (f) the dismissal from employment constituted adverse action within the meaning of s 342 of the Act; (g) such adverse action was taken for reasons which included the exercise of workplace rights within the meaning of s 352 of the Act; (h) the respondent had thereby contravened ss 340 and 352 of the Act; (i) the respondent was liable to the applicant for unpaid commissions of $111,889; (j) the respondent was also liable to the applicant for the sum of $12,846 which liability also entailed a contravention of s 323 of the Act; (k) finally, the respondent was liable to pay the applicant’s entitlements to long service leave under the Long Service Leave Act 2018 (Vic). The applicant sought reinstatement, compensation, recovery of outstanding monies, alternatively damages, interest, pecuniary penalties, declaratory and other ancillary relief.
By its amended points of defence, the respondent acknowledged that the applicant had made the claims for commission as alleged but denied such liability, doing so on the substantive bases that: (a) the parties remained in dispute as to the proper construction of the contract; (b) the applicant had been absent from work due to illness between 22 February and 7 March 2019; (c) the applicant had been dismissed due to poor sales performance in the period 1 July 2018 and 7 March 2019 (it being common ground that, in the relevant period, the applicant had signed only one contract of sale); (d) it agreed it had not alleged the applicant had engaged in any form of misconduct; (d) it observed that the parties’ relevant employment contract had been executed on 24 February 2015, the terms of which governed any entitlement to commission; (e) the applicant had arranged the sale of certain properties in the period 2014 to 2018; (f) any entitlements to commission were subject to ‘offsets’ by the applicant’s base retainer; (g) properly construed, sales commission was not to be calculated or paid on an annual basis; (h) it had not contravened the Act in the manner alleged; (i) it had withheld the sum of $12,846 but contended it was authorised to do so; (j) it acknowledged that the applicant had certain entitlements to long service leave but denied they had not been paid.
By the time of trial, the applicant had abandoned the claim for long service leave payments. At the same time, the respondent acknowledged its liability to repay $12,846 to the applicant and had made such payment. The respondent’s opening outline further indicated that it would make no submissions respecting an alleged contravention of the Act on account of the withholding of $12,846 in the manner described above.
The parties were agreed that six issues were presented for determination, each of which was framed as a question and which have been answered by this judgment insofar as that is possible. At the commencement of the hearing, attention was drawn to apparent difficulties in the drafting of some questions and it was suggested that those issues might be rectified by closing addresses. In the event, the draft questions were not revised and instead, the parties closing written submissions addressed particular aspects of the case in recognition of the issues thrown up by the questions as framed; in particular, as concerned an open ended question as to the proper construction of cl 6, and schedule 1, of the employment agreement.
Witnesses
Evidence was called from the applicant together with a former sales and marketing manager, Mr Chris Bolanis, whose employment had also been terminated by the respondent. Evidence was called on behalf of the respondent from Mr Leonard Charles Warson, who was variously described as its owner, chairman, director and Chief Executive Officer, together with Mr Leigh Joseph Squarci, its current General Manager (Housing), and Mr Michael Gerolemou, a Human Resources consultant. The respondent also served an outline of evidence of a former General Manager, Mr Cameron George, but he was not called to give evidence. Equally, the respondent’s CFO, Mr Eric Vreugdenourg, who had played no small part in a central aspect of the matter was also not called and his absence was not explained.
Despite the sustained attack on his credit, I concluded that the applicant was an essentially credible witness who in some instances held fast to a somewhat dogmatic belief in his case, but who was equally prepared to make admissions against interest and to do so without undue equivocation. He generally withstood a somewhat spirited attack on his credit.
Counsel for the respondent was highly critical of Mr Bolanis. While I do not ignore that Mr Bolanis had settled a claim for wrongful dismissal made against the respondent, I observed him to be a candid witness. He was prepared to make appropriate concessions, including that he had volunteered that he had not taken any action to discipline the applicant on one occasion, by reason that he had understood and sympathised with the applicant’s frustration in being unable to obtain any real engagement with the respondent’s senior management respecting the resolution of his outstanding claims for commission.
Mr Warson appeared to give his evidence in a careful way. However, as his cross-examination progressed I became increasingly concerned that the witness’s evidence was rehearsed, became inventive and was tailored to project a view upon a particular issue which was consistent with the narrative that he wished to bring to the case. In closing submissions, counsel for the applicant was more trenchant in his criticism variously describing Mr Warson as a very unimpressive witness, who had contradicted his own testimony, been evasive, could not be relied upon and had tailored his evidence to the perceived advantage of the respondent’s case. Having reflected on the matter, I accept that there was some force in those submissions.
In particular, Mr Warson seemed too ready to assign blame against the applicant and other former employees for the moribund state of the Glenvill division of the business. He did so in circumstances where the uncontested evidence was that the quality of certain display homes had deteriorated and that in some years, Glenvill had been denied any budget allocation for marketing or other activities in order that Mr Warson could dedicate available resources to the pursuit of a major greenfields development on the Australian Paper Mills site in Yarra Bend, a development of some 1,400 homes which Mr Warson described as being “a new suburb”. Further, it was common ground, and as Mr Squarci discovered when considering an offer of employment, well known in the industry that a number of General Managers had been appointed and removed from Glenvill’s business over recent years. Mr Warson accepted that he had read Mr Squarci’s outline of evidence but added that he could not recall it at the time of giving his own evidence. I found a deal of Mr Warson’s evidence to be self-serving and in several respects, quite unconvincing.
Mr Squarci, who remains in the respondent’s employment, presented as a witness who was very clearly aligned with Mr Warson’s view of the case. Mr Squarci, who had been aged 33 years when he commenced employment with the respondent on 7 November 2018, said that he considered Mr Warson to be his mentor, a relationship that was plain from their demeanour in court outside of the witness box (and as I confirmed in closing submissions with the respondent’s counsel). Again, counsel for the applicant was highly critical of Mr Squarci’s evidence in closing submissions and I accept that some of those criticisms were not lacking in substance. In particular, the witness adopted a somewhat conclusory stance in referring to the results of his findings without identifying at any time the material on which such findings had been based, particularly as concerned adverse views of the applicant’s performance in circumstances where he had at no time spoken, either to the applicant or his direct manager, Mr Bolanis, in relation to such performance (or informed either of them), that the applicant’s employment would be in jeopardy if his performance did not improve.
Mr Gerolemou, whose engagement commenced on 7 January 2019, holds a continuing consultancy with the respondent. He had some 15 years’ experience in the field of human resources, having worked in the banking/finance sector. Mr Gerolemou discharged an essentially functional role in drafting a letter of termination. Similarly, criticisms which were levelled at the evidence of the human resources consultant were somewhat justified.
Mr Warson, who agreed in the total number of employees and contractors engaged by the respondent, said that the respondent had had no human resources managers at all until perhaps 2017. Mr Warson said that Mr Gerolemou’s title was “human culture and something manager. But effectively, it’s HR manager.” He said that before the appointment of Mr Gerolemou, the role of HR manager had been occupied by “a lady. I don’t recall her name.” He said that there were no other personnel employed in human resources and that the responsibility for matters such as performance and discipline of employees fell to each departmental head and manager.
EVIDENCE
Although I indicated that the court might be assisted by submissions as to the principles upon which the court might act in relation to questions of credibility including whether witnesses were lying, neither party did so. In closing submissions, they embraced the position that it was not necessary to find that a particular witness had lied and it would be sufficient that the conclusion be reached that their evidence on a particular matter was not accepted.
The rejection of evidence may, in some cases, lead to a finding that the person had also lied on another occasion. In Smith v New South Wales Bar Association,[1] Brennan, Dawson, Toohey and Gaudron JJ observed that:
Other evidence may be of such a nature or of such weight that, in combination with the rejection of some particular evidence, it will justify a finding that that evidence was fabricated. But, as a matter of logic and common sense, something more than mere rejection of a person’s evidence is necessary before there can be a positive finding that he or she deliberately lied in the giving of that evidence.[2]
Deane J reasoned to similar effect, holding that unless it was “truly necessary” for the purpose of disposing of the particular case, a specific finding that a party or witness had deliberately given false evidence should ordinarily not be made.[3] These principles are settled.[4]
[1] (1992) 176 CLR 256.
[2] (1992) 176 CLR 256, 268.
[3] (1992) 176 CLR 256, 271.
[4] See, eg, Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34, [53] (Gleeson JA); see also Dutta v Telstra Corporation Ltd [2019] FCAFC 103, [41] (Logan and Reeves JJ, Flick J Agreeing).
There is a difference between the rejection of a person’s evidence and a finding that he or she had deliberately lied. Further, “something more than mere rejection of a person’s evidence is necessary before there can be a positive finding that he or she deliberately lied in the giving of that evidence”[5]; see also Kuhl v Zurich Financial Services Australia Ltd.[6]
[5] Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34, [53], [56].
[6] [2011] HCA 11; (2011) 243 CLR 361, [67] (Heydon), [71] (Crennan and Bell JJ).
Notwithstanding my reservations respecting the evidence of some witnesses, I accept the parties’ submissions that it is not necessary to find that a particular witness had lied. Having regard to the principles considered below respecting the approach to claims of adverse action, the questions to be answered are questions of fact to be determined on the balance of probabilities having regard to all of the evidence and the inferences that are properly available. For the avoidance of doubt, a conclusion that particular evidence has not been believed does not entail a finding that the witness had lied. While the cross-examination of witnesses was frequently directed to impeaching their credit, the suggestion that any of them had deliberately lied was made less often and I decline to make such a finding.
Overall findings
Having regard to the detail of the matters considered in these reasons, it is convenient to provide a statement of my principal findings upon the evidence and inferences open to be drawn.
Since 1991, when Mr Warson acquired the Glenvill brand from receivers, he has established a substantial property development business which now comprises four divisions and generates a turnover of $320 - $450. In that period of some three decades, the Retail Homes business was at times neglected by management including before 2005 and from 2013. Although Mr Warson occupies the role of CEO, director and chairman of the board, he was above all else the owner and founder of this substantial enterprise. While the demands on his time have been significant he has been prepared to dismiss a series of general managers and others.
The applicant, who had been employed by the respondent for over 20 years at the time of termination, had been highly regarded as confirmed by such of the performance reviews as were tendered in evidence. He was recognised, including by Mr Warson, as a person with a broad scope of industry knowledge and experience and who was, for those reasons, a valuable resource who could assist other personnel in the respondent’s business. He see as a person who “Goes in and closes the hard deals that the Sales Consultants cant get across [the line]” and who had been a pleasure to work with, keeping superiors constantly informed of progress on matters, and had delivered on all of the tasks requested of him.
As at 2011, the applicant stated that his personal goal was “to stay a valued member of the Glenvill group for the next 5 years at least, but hopefully find a replacement that is able to begin the set up into the role of Design Sales Manager towards the end of this period.” He also recognised the need to “Provide a young face to the clients.” As at July 2018, the applicant was still viewed by his customers as a person who acted as their advocate. Again, his stated aspiration was to remain in the respondent’s full-time employment for the next five years.
Insofar as the respondent focussed upon the absence of any sale by the applicant in the period July – December 2018, and relied upon this in proof of his poor performance, there was a paucity of evidence as to the sales being achieved by other sales personnel during that time, including at Belmore Road. Contextually, in a July 2018 performance review it was recorded that 2018 had been a tough year. When the new General Manager came to undertake his review of the retail homes division, he found that there were no sales being achieved.
In the period since Mr Warson had been in ‘total control’ since 1991 until 2019, the retail homes division had been run without any key performance indicators (KPIs) being imposed on sales personnel. This astonished Mr Squarci. If the applicant’s performance was a matter of such concern at the relevant times, the available contemporaneous records (of which many were not produced), contra-indicated the criticisms now being made.
Accepting that he achieved no sales in the period July – December 2018, I am not satisfied that the respondent’s generalised criticisms of the applicant’s overall performance are made out. Those criticisms were undermined by the viva voce evidence and the performance reviews. From other evidence, an available inferences is that the applicant’s lack of sales was explained by the transfer of his place of employment, the fact of an election, that 2018 had been a tough year and the uncontradicted evidence that leads were being channelled to other personnel.
Pursuant to his letter of employment in 1998, the applicant was entitled to participate in a Construction Teams Incentive Scheme. There was no evidence as to how the applicant’s entitlements to commissions had been treated under the terms of his 1998 agreement pursuant to this scheme. At most, as appears from the applicant’s 2005 performance review, from the time that he relinquished the role of sales and marketing manager and took up a sales role, Mr Warson proposed that the entitlement to commission was essentially engaged only after the quantum of such commission exceeded the applicant’s current income.
With effect from 1 January 2014, the applicant’s employment, including any entitlement to commission was governed by the terms of the employment agreement. Pursuant to the terms of this agreement the applicant’s entitlement to sales commission was to be calculated by reference to the total cost of works as specified in certain agreements (PA2 agreements) which were framed as an “investment quotation” to a prospective customer. The selection of the PA2 agreement as the source of the entitlement to commission may be seen as recognising that once such an agreement had been executed, the applicant had no further involvement in the building process. Contrastingly, it was accepted that not uncommonly the total cost of works increased (as customers refined their ideas in consultation with other staff and further estimates were made in preparing a ‘tender’ and HIA contract), and that the respondent reserved to itself the profit arising from the increased cost of works at those later stages.
While he was seen as an advocate for prospective customers, the applicant had responsibility for coordinating, relevantly, the consultations between the customer, and architect on the one hand and completion of the works by the sales estimation team on the other and in approving the final version of the PA2 agreement that was submitted for their execution at which point they would pay the balance of the 5% deposit for the contract works. From this it follows, and as I conclude, the applicant’s responsibility included endorsing those individual aspects of a PA2 agreement in which it had been recorded that a particular discount was to be allowed in favour of a customer (whether or not such discount was described as being a special allowance, a discount or an item for which no charge would be made). As he accepted, the applicant was the face of the respondent in its dealings with prospective customers up to the point where the PA2 agreement had been executed. Insofar as those agreements recorded that management had agreed to a particular discount on the terms on which it might be offered, I treat the reference to management as something to which the applicant had agreed on behalf of the respondent or, in other cases, may have so agreed after having secured the endorsement or permission of other senior management to do so.
The offer of these various discounts were clearly designed and intended to operate as incentives in the overall attractiveness of the respondent’s investment quotations. From that perspective, it may have been entirely understandable that, once a customer had passed through the PA2 agreement process and was thereafter dealt with by a contract administration team, the respondent’s other staff or management may have been quite prepared to allow a discount notwithstanding that the condition on which it had been proposed had not been satisfied or expired. However, it is an entirely separate question whether, for the purposes of calculating any entitlement to commission pursuant to the terms of the employment agreement, any particular discount should be included or excluded from the total cost of works.
Although the applicant had ‘stockpiled’ his commission entitlements from 2014 until mid-2018, when he submitted those claims to his then General Manager, Mr Murphy, in July 2018 they were approved. The approval was prompt and coupled with advice by Mr Murphy that the claims would be dealt with by the respondent’s accounts department. To the extent that Mr Murphy had any concern whatsoever respecting the applicant’s entitlement to commission it was only expressed as a collegial jibe that he would take out his management commission on the way past.
In the weeks that followed, from July 2018, the applicant worked with the respondent’s Finance Department to resolve any anomalies respecting the data in those claims and those anomalies were duly resolved. Insofar as the applicant held any concerns that his entitlement to commissions was in question it was reflected in his belief that he thought all of the anomalies relating to the underlying data upon which’s claims were to be calculated, had been progressively resolved, including by the exchange of a series of Excel spreadsheets.
By perhaps August 2018, the respondent’s CFO, Mr Vreugdenourg, whose practice was to deal with numbers in a way most advantageous to his employer, resisted the payment of the claims for commission, doing so on a number of bases. First, it was asserted that the entitlements were cumulative in the sense that any entitlement to commissions spanning a number of years had to exceed the sum of the applicant’s base retainers for each of those years before any entitlement to commission arose. Although the parties’ conceptions of annual and cumulative entitlements to commission were expressed in various ways, in substance, on the view taken by the CFO, the method of calculating the entitlement to commission in the way which was most advantageous to the respondent was to approach the calculation in much the way of a running account. Secondly, in further dilution of any entitlement to commission, the CFO maintained that both the applicant’s base annual retainer and superannuation entitlements were to be used in the determination of whether the commissions being claimed exceeded the sum of those entitlements. Thirdly, for reasons which were never explained, the CFO determined that the applicant had only a 50% entitlement to commission on four jobs. Fourthly, viewed more broadly, I am satisfied that the respondent resisted all attempts by the applicant to engage in a process to resolve the claims for commission in any meaningful way over the period August 2018 – March 2019. That it did so is to be viewed in the context that by July 2018, it’s then (but now dismissed), General Manager, had approved each of the claims.
In its practical effect, since the applicant’s commission’s had not been paid in the years in which they had been earned, the CFO chose to accumulate the applicant’s base rates of pay for each of the years 2014, 2015, 2016, 2017 and 2018 and to treat the sum of those base retainers as setting the benchmark against which any entitlement to commissions was to be determined. The adoption of that approach served to dilute the quantum of the entitlement markedly.
Once the applicant had learned that the CFO had maintained that the entitlement to commission was to be calculated on the basis of his cumulative base annual retainers, he effectively sought to bring into play his long-standing employment as a basis upon which he would ask Mr Warson to intercede and so achieve the resolution of a long outstanding issue.
Whether that occurred in October or, as I think more probable, in November, 2018, I am persuaded that the applicant spoke with Mr Warson seeking his assistance in resolving his claims for commission which had been approved in July 2018. To the extent that reliance was placed by the respondent upon Mr Warson’s diary as indicating the absence of any such meeting, I was reminded of a theme which ran through parts of the respondent’s case that it saw itself as a family company and, by implication, that the applicant was a part of that ‘family’, and further that Mr Warson saw himself as an approachable empathetic sort of guy who projected the view that he would rather see issues of this kind resolved.
The conclusion that the applicant had met with Mr Warson by at least in November 2018 is supported in part by evidence given by the applicant in cross-examination that he had consulted his solicitor for legal advice in relation to the proper construction of his employment agreement some weeks before his letter was transmitted to both the CEO and CFO on 4 December 2018. On the evidence above I have concluded that Mr Vreugdenourg had first used the expression “cumulative” in relation to the applicant’s entitlements to commission and that the same expression had been used by Mr Warson when he had first approached him and asked him to find a solution to the impasse. On 29 November 2018, the applicant forewarned Mr Warson that a legal letter would be coming to him in relation to his claims for commission. Such letter was addressed to both the CEO and CFO. Such letter directly addressed the respondent’s contention that the entitlement to commission was cumulative. Viewed objectively, the applicant would have had no need to consult a lawyer to obtain legal advice upon the proper construction of the employment agreement, and in particular, whether the entitlement was “cumulative”, unless that contention had been put to him by mid-November 2018 as the reason why the respondent was resisting his claims for commission. Upon those findings, I am satisfied that, by mid November 2018 at the latest, Mr Warson well knew that the applicant’s claims for commission were being resisted by the respondent on the basis that the entitlement was, it was being said, “cumulative”. Further, I find it more probable that the catalyst for the applicant’s decision to seek legal advice by mid November 2018 was the statement by Mr Warson that he interpreted the contract as being cumulative and, in rejecting the applicant’s contention that the entitlement was to be determined annually, had replied “Well, that’s the way it stands.” Once Mr Warson had adopted the stance that the resolution of the claims for commission (which the applicant believed to be in excess of $100,000) were to be calculated on a basis which was contrary to the applicant’s understanding of the employment agreement, logical next steps for him to take would include obtaining legal advice and which he had done by mid-November 2018.
On 29 November 2018, the applicant told Mr Warson that a solciitor’s letter was coming in relation to his claims for commission. This letter was transmitted by email to both Mr Warson and Mr Vreugdenourg and addressed in detail the basis on which the applicant’s claims for commission were put. The respondent did not reply in writing to that letter at any stage.
One of the recommendations made by Mr Squarci to Mr Warson in early December 2018 was that the applicant’s employment should be terminated. Mr Warson agreed. Upon the whole of the evidence I am satisfied that at the time he received Mr Squarci’s oral and written reports upon his assessment of the Retail Homes division, Mr Warson well knew that the applicant was pressing – and that he had rejected – his claims for commission. I reject Mr Warson’s evidence to the contrary. Indeed, I consider his rejection of the suggestion that he knew of the applicant’s claims for commission was grounded in a desire to dilute the significance of those claims as having any bearing upon the decision to terminate the applicant’s employ.
On 17 December 2018, a board meeting of the respondent’s directors was held and at which Mr Squarci participated, for the first time, by speaking to the report on the Retail Homes division. As I have concluded, it was the respondent’s board which made the decision that the applicant’s employment should be terminated and that the timing and execution of the decision was then left to Mr Squarci. I reject the respondent’s submission that the decision had been made by Mr Warson before the board meeting on 17 December 2018.
However, I was troubled by the admittedly imprecise nature of the sequence of events leading to a decision to terminate the applicant’s employ. While Mr Squarci was asked to evaluate the Retail Homes division and did so, his report, which was reduced to writing in early December 2018, contained ‘commentary’ which contained a recommendation that the applicant’s employment should be terminated. Taking account of the fact that Mr Squarci had only been in the role of General Manager for a matter of weeks it is clear, in my view, that he had not assumed authority to make a decision respecting dismissal and, to the contrary, had been told of the board’s decision endorsing his recommendations and that the timing of any dismissal was a matter for him but, in the board’s preference, should not occur before Christmas 2018. The board’s view was contrary to Mr Squarci’s own view but he respected it.
In closing submissions, counsel for the respondent highlighted that his client had stated on oath, by an affidavit of documents, that beyond the documents which had been discovered in the proceeding, there were no minutes of meeting or resolution of the board of directors for any meetings in 2018 and, in particular, for the meeting held on 17 December 2018. In those submissions it was urged that the respondent was not a publicly listed, but a private family, company and that the absence of any such documents was innocuous. Whether or not that may be so, it is a factor bearing upon the relative importance of calling other of the directors who were in attendance at that board meeting, and in particular, Mr Vreugdenburg
In the absence of any formal minute recording any resolution of the respondent’s board, the best available evidence is that of Mr Warson who said that the board approved the recommendations for dismissal of sales staff in the Retail Homes division but that the timing of the execution of such decision was a matter to be left to the new General Manager. While the respondent may have been in a position to establish more precisely any decision-making process that had been undertaken by the board, including by adducing more direct viva voce and documentary evidence, this did not occur.
In closing address, it was submitted for the respondent that Mr Warson had made the relevant decision to terminate the applicant’s employ. As I understood his evidence, at its highest he had agreed in the recommendations made by Mr Squarci but considered that it was appropriate to apply the informal policy of the company that, relevantly, the employment of a long-standing employee should not be terminated without board approval. While arguments may be raised in relation to the distinction between approval and ratification, or either view, no concluded decision to terminate the applicant’s employ existed before such approval or ratification had occurred. That is because on Mr Warson’s own evidence a decision respecting, relevantly, the termination of a long standing employee was a matter to be determined by the board. I do not accept Mr Warson was the sole decision maker in the termination of the applicant’s employ.
Unbeknown to the applicant, on the morning of 19 December 2018, a meeting attended by Mr Warson, Mr Squarci and Mr Gerolemou had been held but about which little evidence was given. In the circumstances in which the fact of this meeting came to light, both Mr Warson and Mr Squarci deprived themselves of the opportunity to give evidence about it.
In the afternoon of 19 December 2018, a meeting attended by Mr Warson, Mr Squarci, the applicant and, at one point, a former General Manager, Mr George, at which discussion took place in relation to the applicant’s claims for commission. I have examined the competing versions of events of the parties’ meeting on 19 December 2018. Those events formed part of the background to an ongoing failure to resolve the claims for commission over many months. Although it was suggested that an agreement had been reached that the parties’ would be bound by the view expressed by Mr George as to the entitlement to commission, I reject the suggestion that any agreement to do so was ever reached. I also prefer the applicant’s evidence that towards the close of this meeting Mr Squarci had said, in effect, that he had serious concerns with a staff member suing Glenvill. I find that this statement served as a catalyst for Mr Warson to intervene by stating that the applicant was ‘family’ and that the issue would be sorted out. There was considerable force in the observation during cross-examination that some aspects of the meeting between Mr Warson, Mr Squarci, Mr George and the applicant was little more than a charade, particularly in circumstances where the respondent did not lead evidence (and it was only exposed by the later production of Mr Warson’s diary), that he, with Mr Squarci, had met earlier that day with Mr Gerolemou.
As concerned the meeting on 19 December 2019, I conclude that the versions of the events which occurred at this meeting as given by the respondent witnesses to be quite unconvincing. I also think it likely Mr Warson adopted the stance of discussing the issue of commission with the applicant by throwing the onus onto him from the outset of explaining what it was about as feeding the theme that the issue of commission was not understood by him at that time and was a matter of no moment. I reject Mr Warson’s suggestion that he had proposed, and secured the applicant’s agreement, to abiding by the umpire’s decision and to making a call to Mr George on that basis. Nothing in the parties’ subsequent communications contained any suggestion, for example, that the dispute over commissions had been resolved on the basis that the respondent’s contention for a cumulative assessment had been agreed on 19 December 2018.
It seems to me to be inherently implausible that, after he had spent months seeking to achieve resolution of his claims for compensation which had been approved by his General Manager, the respondent could have believed the applicant had accepted the result of the 19 December 2018 meeting and been prepared to simply “move on”.
Insofar as Mr Warson, and for that matter, Mr Squarci, downplayed the significance of the applicant’s repeated enquiries respecting his claims for commission, I found their evidence entirely unconvincing. Relatedly, inasmuch as attempts were made to eschew any knowledge of the contents of the Solicitor’s letter, I disbelieve their denials of such knowledge. In particular, I am persuaded that Mr Warson feigned ignorance of this letter or its contents as forming part of his attempt to paint the applicant’s claims for commission as being a matter of insignificance to him.
As is apparent, at no stage during any of his meetings in relation to the resolution of his claims for commission was the applicant’s performance raised as an issue. Nor was there any suggestion that Mr Warson or Mr Squarci had given any indication that the applicant’s employment was in jeopardy or would be terminated. On Mr Warson’s evidence, the timing of implementing of the recommendations contained in Mr Squarci’s report which had been endorsed by the board on 17 December 2018 was a matter left to the new General Manager.
The parties’ further communications during January – February 2019 demonstrate that the CFO was unprepared to resile from the positions adopted in his Excel spreadsheet but was now advancing further reasons to resist the claims for commission including that he had added the applicant’s base retainer for the 2018 calendar year further diluting the claims. Contrastingly, at this time, the applicant conceded that no commission was payable for the 2017 calendar year.
After attempting to resolve the matter over many months, the applicant’s frustrations took the better of him and he declined to participate further in the Collections project and ultimately took a period of sick leave, supported by his medical and allied advisors.
Further, for the reasons addressed later in relation to the proper construction of the employment agreement, I have found that the approach adopted by the respondent had no basis in the terms of that agreement. Indeed, I regard it as having maintained an untenable construction of the employment agreement as a vehicle to resist the payment of the applicant’s lawful entitlements to payment of accrued commissions. In this context, the complete absence of any response to the Solicitor’s letter of 4 December 2018 or the later correspondence sent in early 2019 was somewhat notable. The absence of any such response may be explained, in part, by the fact that the respondent had decided to terminate the applicant’s employ.
Nothing in the applicant’s email communications refer to any suggested agreement having been reached on 19 December 2018 to the effect that Mr Warson and the applicant had agreed to abide by the view expressed by Mr George as to the proper interpretation of the employment agreement. More importantly, nothing in the email communications which were transmitted by the respondent after 19 December 2018 ever suggested that such an agreement had been made. In my view, the most obvious position for the respondent to have taken when addressing the applicant’s ongoing attempts to resolve payment of his claims for commission would have been to immediately confront him with the fact (had it been the fact), that the parties had agreed on 19 December 2018 to treat Mr George’s as yet unknown view upon the cumulative basis for an assessment of commission as being determinative.
From one perspective it appears that the applicant’s attempts to resolve his claims for commission were being addressed in a somewhat ad hoc approach, particularly in circumstances where, in July 2018, the claims for commission had been approved by the respondent’s then General Manager, Mr Murphy. An available conclusion, which I am prepared to reach, is that the issue was simply being obfuscated by the respondent’s senior management who delayed in addressing the matter until the applicant’s employment had been terminated. Further, upon the whole of the evidence, including the emails referred to above I am left in no doubt as to the cogency of Mr Warson’s evidence that his CFO took a view of financial matters which would be most advantageous to the respondent’s position. I am satisfied that despite the applicant’s claims for commission being approved by his then General Manager, Mr Murphy, over the period July 2018 – March 2019, the respondent effectively stonewalled any and all attempts to resolve these claims for commission. I am fortified in these conclusions by the respondent’s failure to respond in writing, or it seems at all, to the two letters which were addressed by the applicant’s solicitor to it seeking to resolve the central question whether, properly construed, the entitlement to commission was cumulative or annual.
I prefer the evidence of Mr Bolanis over that of Mr Squarci that in late January or early February 2019 those parties had engaged in a discussion during which Mr Squarci had said that he couldn’t believe an employee who was suing the respondent was still employed and that in his view “We need him gone.” I infer that the reference to an employee suing the respondent was a reference to the fact of the Solicitor’s letter. I am satisfied that the reference to such employee was a reference to the applicant. I accept Mr Squarci’s evidence that he did want the applicant’s employment to be terminated. His disbelief that a person who was suing the respondent remained in his employment spoke loudly to his attitude on the subject.
The applicant’s position, which he confirmed in cross-examination, was that “again, this was a Glenvill management discount therefore I do not believe that I’m liable for that discount.”
He also gave evidence that the HIA contract had not been signed within the 120 day period as stipulated by the PA2 agreement. This evidence conveyed the applicant’s view that he was not “liable for that discount” in the context of advancing his claim for commission and whether such discount should be deducted from the total cost of works for the purposes of the calculation of commission. Offered the opportunity to clarify his evidence, the applicant was resolute that if the respondent made a decision in its own commercial interests to concede a discount in favour of a prospective customer but did so outside of the 120 day (or other stipulated) period, such a concession was entirely within its right but should be disregarded for the purposes of calculating his commission by reference to the terms of the PA2 agreement and in accordance with his employment contract.
Pressed on this issue, the applicant accepted that he occupied the role of design manager and was the face of the respondent in dealings with prospective customers at the time the PA2 agreement was being struck and had responsibility as the principal liaison with the customer at that time. While he initially sought to suggest that the conversation referred to “would have been discussed with the management – managers”, he conceded that at the relevant time; namely, 16 December 2015, it was more likely than not that it was he who had held the conversation with the prospective customers and that it was he, as the face of the respondent, who had offered them the discount of $25,700.
The parties were agreed that the commission on this job was calculated at $21,263.
Job 150046 (Benkel)
An examination of the transcript at pp 35 – 36 discloses that while an attempt was made to elicit evidence from the applicant, his attention was redirected to the earlier job (Wignall), and that, erroneously, he then directed his attention to the following job (Karametos).
An examination of the respondent’s letter dated 4 March 2016 containing the investment quotation made to these prospective customers confirms that no special allowance or discount was offered in favour of the customers and that there were no items in the quotation for which “No Charge” was being made.
The applicant contended for an entitlement to commission of $27,320 while the respondent contended for an entitlement of $26,455.
Job 160008 (Karametos)
By item 40 of this PA2 agreement, the prospective customers were offered a special allowance of $11,190 which was described as being given in the following circumstances: “Due to errors in documentation Glenvill’s management is prepared to offer a special allowance subject to receiving the signing paperwork and proceeding to a Preliminary Agreement 2 by the 28th August 2016.”
The applicant gave evidence that he had a very precise recall of this job and said that he had taken it over from another consultant after the respondent’s estimating team had “made some serious blunders in estimating preliminary pricing. And as a show of good faith, the owners agreed to take a higher price and we agreed to provide them a discount and therefore the discount was offered as Glenvill – by Glenvill management to keep the job in the system and in good faith.” He adopted the position that he was “not liable for paying commission” by reason of the errors having been made by the respondent’s estimating team and said that there had been a great deal of “to-ing and fro-ing between Glenvill and the client and management and in the end the clients who had bought the property were keen and in a hurry to move forward agreed to pay part of the higher price and we also agreed to provide them a discount.” Further, the applicant said that the effect of such errors upon his claim for commission was that he should not be liable for the discount on the basis that the errors had been made by the respondent’s estimating team with the result that the respondent’s management had intervened and then negotiated to secure that the job was retained. The applicant also accepted that a further consequence of the events described above was that he was to be entitled to commission on a higher total cost of works than that which would have been payable on the cost of works before the errors by the respondent’s estimating team had been discovered.
In cross-examination the applicant agreed that this was another job which fell within the category of claims where he contested the respondent’s entitlement to reduce the total cost of works by the sum of the special allowance on the basis that it had been granted by management.
The applicant contended for an entitlement to commission of $24,136 while the respondent contended for an entitlement of $20,911.
Job 160026 (Rangaswami)
By item 47 of this PA2 agreement, a special discount of $28,750 was allowed in favour of the prospective customer on the stated basis that the respondent’s management was “prepared to offer you a discount subject to signing the PA2 agreement and paying the deposit by 16th September and paying the PA2 deposit by the 21st December.”
The applicant contended for an entitlement to commission of $17,787 while the respondent contended for an entitlement of $11,897.
According to the Scott schedule, this PA2 agreement was made in January 2017.
Job 160030 (Narula)
By item 47 of this PA2 agreement, two special discounts were given. Relevantly, the second discount, being in a sum of $10,000, was recorded as having been “agreed on 9th December by the General Manager.”
The applicant’s evidence was that he accepted the first discount ($30,550) should be deducted from the total cost of works but contended that the second discount of $10,000 should not be so deducted by reason that it had been agreed to by the respondent’s General Manager and not so agreed or allowed by him. Again, the applicant had a precise recall of this particular job and explained that the second discount had been allowed by the General Manager in circumstances where in the course of progressing to execution of a HIA contract it had emerged that the respondent’s estimating team had committed an error in failing to recognise the need for including the cost of additional scaffolding to address the presence of power lines which ran adjacent to the subject property and so affected the scope of the proposed works.
The applicant contended for an entitlement to commission of $16,353 while the respondent contended for an entitlement of $13,965.
Job 160034 (Herath)
According to the Scott schedule, this PA2 agreement was made in February 2017.
By item 47 of this PA2 agreement, the prospective customers were offered a special allowance of $20,950 which was described as being given in the following circumstances: “Provide a special allowance as per the origianl (sic) preliminary estimate as agreed by Glenvill Management.”
The applicant’s evidence was that this special allowance had been agreed by the respondent and not by him in the course of progressing the job to the point of the PA2 agreement.
The applicant contended for an entitlement to commission of $25,141 while the respondent contended for an entitlement of $16,780.
CONCLUSION
The parties’ questions have been answered insofar as that is considered to be appropriate.
Declarations should be made reflecting the contraventions which have been found, together with orders for compensation and directions to facilitate that the parties might confer upon the quantum of the amounts due for unpaid sales commission, interest up to judgment and any ancillary issues that may be necessary or desirable so as to finally determine all questions in the proceeding other than penalties. Although the parties were agreed that there should be a separate hearing on the question of penalties and a date has been assigned to accommodate that hearing, it was also suggested that the parties may be content for such determination to be made on the papers. Counsel indicated they were content to agree a timetable for evidence and submissions and I will act on the assurance that this can be achieved by consent minutes.
I certify that the preceding six hundred and fifty (650) numbered paragraphs are a true copy of the Reasons for Judgment of Judge A Kelly. Associate:
Dated: 23 February 2021
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