Cheung v Aust Landing Group Pty Ltd [2024] FedCFamC2G 278
File number:
MLG 2683 of 2022
Judgment of:
JUDGE CHAMPION
Date of judgment:
28 March 2024
Catchwords:
FAIR WORK – Whether the Applicant was an employee – Where because the Applicant was not an employee there was no contravention of s. 323(1) of the Fair Work Act2009 or s. 44 and s. 117 of the FW Act – Where primary contravention accessorial liability pursuant to s. 550 not proved – No contravention of the FW Act
INDUSTRIAL LAW – EMPLOYMENT – Where there was no term of any employment agreement that the Applicant be paid an annual salary of $150,000 – Whether the Applicant was an employee on terms other than those pleaded – Where the Board of the First Respondent resolved to pay the Applicant a nominal salary to cover all expenses – Where payment made to the Applicant as a director and not as an employee – Where proving employment was a necessary premise of proving reasonable notice claim – No breach of any employment contract
PRACTICE AND PROCEDURE – JURSIDICTION – Whether the Court had jurisdiction as to a non-federal claim as to a Loan Agreement because together with the federal claims it comprised a single justiciable controversy – Where the Loan Agreement was a separate and distinct claim Court did not have jurisdiction as to the Loan Agreement claim
INDUSTRIAL LAW – LOAN CONTRACT – Whether Applicant proved oral Loan Agreement – Where the Court found there was no Loan Agreement – Application dismissed
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Keep reading for free
Create a free CaseChat account to read Cheung v Aust Landing Group Pty Ltd and more:
The case of Cheung v Aust Landing Group Pty Ltd involved a dispute between Mr Cheung and Aust Landing Group Pty Ltd (ALG) over an alleged employment agreement and other associated claims. The dispute centered around whether Mr Cheung was an employee of ALG and if he was underpaid during his employment period. Additionally, the case examined whether there was an oral loan agreement between Mr Cheung and ALG. The court had to decide on various legal issues, including the validity of the employment agreement, the existence of the alleged oral loan agreement, and the jurisdiction of the court to hear the case. The court found that Mr Cheung had not proved that he and ALG entered into an employment agreement that included an annual salary of $150,000 plus superannuation. Furthermore, the court concluded that there was no evidence to support the existence of an oral loan agreement between the parties. Consequently, the court dismissed the application, finding no contravention of the Fair Work Act 2009, and ruled that it lacked jurisdiction to hear the loan agreement claim.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Further, the parties provided certain other documents including written outlines of final submissions (MFI-1–MFI-8).A BRIEF CHRONOLOGY AND RELEVANT FACTS This dispute spans events between February 2014 (when there was a shareholders’ meeting at Mr Liu’s Balwyn home) attended by the three men and May 2021 when ALG made its final $3,600 net monthly payment to Mr Cheung. It is first necessary to set out something as to ALG.Aust Landing Group Pty Ltd On 30 May 2011 ALG was registered. Before ALG’s registration, Mr Cheung and Mr Liu were friends. Together, they registered ALG. The plan was that ALG would buy and develop residential and commercial property (Mr Liu, [9] (CB372)). Their “plan was to start working on large project developments once we have found another partner” (Mr Liu, [11], (CB371); Mr Cheung, [6], (CB35)). In due course, Mr Hu became that other partner. In 2013, Mr Hu’s evidence was that he first met Mr Cheung and Mr Liu (Mr Hu, [8], (CB331)). Between 2013 and May 2019 he held a Business Innovation and Investment (Provisional) Visa (Visa) a condition of which was that he invest $5,000,000 in Australia and live in Australia for about 40 days a year (Mr Hu, [7], (CB331)). For nearly all of the relevant period Messrs Cheung, Hu and Liu formed ALG’s Board. From 30 May 2011 until 20 April 2021, when he was removed by a resolution of a shareholders meeting, Mr Cheung was a director of ALG. From 30 May 2011 until 16 August 2022, Mr Liu was a director of ALG. On 19 June 2014 Mr Hu was appointed a director and remains a director of ALG. The three men were, and remain, ALG’s principal shareholders. Mr Cheung and Mr Liu were ALG’s initial shareholders. On 19 February 2014, Mr Hu first became a shareholder. The ratios in which each of the 3 men held the issued shares in ALG changed over time. Mr Hu’s evidence was that for most (if not all of the critical period) the share structure was that he held 42% of the issued shares in ALG. Mr Liu and Mr Cheung each held 29% of the issued shares (Mr Hu, [13], (CB331)). A relatively recent ASIC search records that Mr Hu’s shareholding has increased and the shareholdings of Mr Cheung and Mr Liu have decreased. Mr Hu now owns approximately 80% of the issued shares in ALG. Each of Mr Cheung and Mr Liu now own approximately 10% of the issued shares: (XL 2; ASIC Company Search, 28 November 2022, (CB410–416)). As they comprised the board and were the only shareholders, Messrs Cheung, Hu and Liu agreed on ALG’s operations. As to some dealings there are no documents. As to other matters, there are Board minutes and minutes of shareholder meetings. Outside formal forums, discussions often took place by WeChat message (Mr Liu, [42], (CB376)).The chronology I have set out in broad outline the relevant chronology below which shapes the issues to be decided. It will be necessary to return to a number of these events in my discussion of the issues.26 February 2014 – The shareholders meeting at Mr Liu’s Balwyn home
Evidence
Evidence Before The Court
The same monetary claim for unpaid salary and superannuation has a statutory basis and a contractual basis. Mr Cheung makes his statutory claim under s. 323(1)(a) of the FW Act which mandates that an employer must pay an employee amounts payable to the employee in relation to the performance of work “in full”. Alternatively, he claims the same monetary loss as damages for an alleged breach of his employment agreement.The evidence In reaching my conclusion, I have considered most particularly the evidence as to the shareholders’ meeting on 26 February 2014 at Mr Liu’s Balwyn home, the evidence as to the meeting at the Star Hotel, Sydney in November 2015, the evidence as to the parties’ post-contractual conduct including the ALG Board minutes signed by all directors on 18 February 2017 and whether the evidence as to the work Mr Cheung performed for ALG in the period December 2015 – May 2021 proves he was a full-time employee. I traverse that evidence below. 26 February 2014 – Shareholders’ meeting at Mr Liu’s Balwyn Home On 26 February 2014, Messrs Cheung, Hu and Mr Liu attended a shareholders’ meeting at Mr Liu’s Balwyn home. There were signed minutes of that meeting (AC-1, (CB47-49)). Mr Cheung says the terms of the Employment Agreement were oral. Mr Cheung confronted the difficulty of any applicant who relies on an oral contract in discharging his onus of proof. As noted in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451, [94] a party who seeks to rely on spoken words as the foundation for cause of action “in the absence of some reliable contemporaneous record or other satisfactory corroboration…may face serious difficulties of proof.” Mr Cheung’s difficulty was increased in circumstances in which all other evidence from those present at the meeting - namely, Messrs Hu and Liu - was that no such agreement was reached. At the February 2014 meeting, Mr Cheung’s evidence was that Mr Hu and Mr Liu offered that Mr Cheung be employed by ALG as “Project Director” on a salary of $150,000 plus superannuation and that he accepted that offer (Mr Cheung, [11], (CB36)). Mr Cheung at that time had his own company “Auburn Land Group”. In September 2014, he sold a project of the Auburn Land Group, in Kew, Victoria. The sale met an obligation set out in the minutes restraining the directors from property development other than under ALG’s auspices. Mr Cheung’s evidence was that employment did not commence, however, because of Mr Liu’s issues in departing China. He said that “everything was paused at that point in time”: Mr Cheung, [13], (CB36). The Respondents deny that any such agreement was reached at the shareholders meeting on 26 February 2014 (or subsequently). Mr Hu’s evidence was: “we did not speak about engaging Mr Cheung as a Project Manager. Had we spoken about that, I believe it would have been recorded in the minutes” (Mr Hu, [18], (CB332)). Mr Liu’s evidence was ([18], (CB373)):We did not discuss anything beyond what was recorded in the minutes, such as employing Mr Cheung as Project Director. Making Mr Cheung Project Director would have been a serious decision, and we would have recorded discussing it, like we did in the minutes of our meeting on 18 February 2017.No employment agreement made on 26 February 2014
Decision
Reasons for decision
Mr Cheung’s evidence was that he remained an employee of ALG up until 31 May 2021 and that the end of the payments from ALG to him marked ALG’s termination of his employment at its initiative – triggering a contractual entitlement to reasonable notice or statutory notice.THE ISSUES FOR DECISION It is in the context of that chronology 9 issues arise for decision as follows:(1)Did Mr Cheung and ALG make the Employment Agreement a term of which was that ALG pay Mr Cheung an annual salary of $150,000 plus superannuation?(2)If he does not make out that primary case, should Mr Cheung be permitted to pursue an unpleaded alternative case that he and ALG made an employment agreement that ALG would employ Mr Cheung on an annual salary of $53,076? Has he made out such a case?(3)Did ALG underpay Mr Cheung in the period 24 November 2016 to 31 May 2021 in the amount of $438,096 plus superannuation being the shortfall between $150,000 annually plus superannuation and the amount ALG paid to him?(4)Did ALG terminate Mr Cheung’s employment effective on 31 May 2021?(5)If ALG terminated Mr Cheung’s employment effective on 31 May 2021, is Mr Cheung entitled to reasonable notice as to the termination of his employment? If so, how long was reasonable notice? Alternatively, is he entitled to statutory notice under s. 117(1) of the FW Act?(6)Was Mr Hu “involved” within the meaning of s. 550 of the FW Act in any contraventions of the FW Act?(7)Was Mr Liu “involved” within the meaning of s. 550 of the FW Act in any contraventions of the FW Act?(8)Does the Court have jurisdiction to decide whether Mr Cheung and ALG made a Loan Agreement on the basis that the Loan Agreement and the employment claims comprise a “single justiciable controversy?(9)Did Mr Cheung and ALG make a Loan Agreement? If so, does ALG owe a debt to Mr Cheung of $396,214.46 as to monies he advanced to ALG between 15 March 2018 and 29 June 2020?ISSUE 1: DID MR CHEUNG AND ALG MAKE AN EMPLOYMENT AGREEMENT? IF SO, WAS A TERM OF THE EMPLOYMENT AGREEMENT THAT ALG PAY MR CHEUNG AN ANNUAL SALARY OF $150,000 PLUS SUPERANNUATION? There is a fundamental dispute between the parties as to whether Mr Cheung and ALG made the Employment Agreement. Mr Cheung, who has the onus to prove his case, has not proved that he and ALG entered into an employment agreement a term of which was that ALG agreed to pay him an annual salary of $150,000 plus superannuation as a full-time employee in the position of Project Director.Limitations issues Mr Cheung does not pursue his salary before 24 November 2016 because of limitations issues. As to his statutory claims, there is a statutory time bar in s. 545(5) of the FW Act. As to his contractual claims, s. 5 of the Limitation of Actions Act 1958 (Vic) bars pursuit of the contractual claim before 24 November 2016. As a result, after 24 November 2016 until 31 May 2021 he says he has been underpaid a total amount of $438,096 (4.52 years x $96,924 ($150,000 less $53,076) annually) plus superannuation of $41,619.12 (9.5% x $438,096): Ex. MFI-1; Amended Statement of Claim, [12], (CB12).A statutory and a contractual claim
