Creative Smiles Pty Ltd v Ekera Dental Pty Ltd

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

COMMERCIAL DIVISION
GENERAL CASES LIST

Revised
Not Restricted

Suitable for Publication

Case No. CI-19-04997
CREATIVE SMILES PTY LTD (ACN 116 150 353)	First Plaintiff
JOHN GOODMAN	Second Plaintiff
v
EKERA DENTAL PTY LTD (ACN 163 686 146)	First Defendant
ANTHONY COULEPIS	Second Defendant

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JUDGE:	HIS HONOUR JUDGE COSGRAVE
WHERE HELD:	Melbourne
DATE OF HEARING:	10, 11, 12, 13, 16, 17, 18, 19, 20, 23, 24, 25, 26, 27 and 30 August, 22 September, 21, 22 October 2021. The parties filed further written submissions in late February and early March 2022.
DATE OF JUDGMENT:	16 December 2022
CASE MAY BE CITED AS:	Creative Smiles Pty Ltd & Anor v Ekera Dental Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2022] VCC 2281

REASONS FOR JUDGMENT
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Subject:BREACH OF CONTRACT – MISLEADING AND DECEPTIVE CONDUCT – EMPLOYMENT
Catchwords: Breach of contract – sale of a business – acquisition agreement – services agreement – earn-out payment – misleading and deceptive conduct – representations about future matters – employee or contractor –
Legislation Cited: Civil Procedure Act 2010 (Vic); Competition and Consumer Act 2010 (Cth); County Court Civil Procedure Rules 2018 (Vic); Evidence Act 1995 (Cth); Fair Work Act 2009 (Cth); Health Professional and Support Services Award 2010; Health Professionals and Support Services Award 2010; Long Service Leave Act 1955 (NSW); Superannuation Guarantee (Administration) Act 1992 (Cth); Superannuation Guarantee Charge Act 1992 (Cth); Trade Practices Act 1974 (Cth)
Cases Cited:Abigroup Contractors Pty Ltd v Sydney Catchment Authority [No 3] (2006) 67 NSWLR 341; ACCC v ACM Group Ltd (No. 2) 2018 FCA 1115; ACCC v Woolworths Ltd 2019 FCA 1039; Badenach v Calvert (2016) 257 CLR 440; BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338; BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings. (1994) 180 CLR 266; Butcher v Lachlan Elder Realty (2004) 218 CLR 592; CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1; Chappel v Hart (1998) 195 CLR 232; Codelfa Construction Pty Ltd v State Railway Authority (1982) 149 CLR 33; Cummings v Lewis (1993) 41 FCR 559; Delaney v Delaney [2021] VSC 365; Dental Corporation Pty Ltd v Moffet (2020) 297 IR 183; Fair Work Ombudsman v A to Z Catering Solution Pty Ltd & Anor (No 2) [2018] FCCA 2299; Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365; Fair Work Ombudsman v Grouped Property Venues Pty Ltd [2016] FCA 1034; Fair Work Ombudsman v Nobrace Centre Pty Ltd [2018] FCCA 378; Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; Henville v Walker (2001) 206 CLR 459; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216; Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119; Jones v Dunkel 101 CLR 298; Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 335; MacDonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152; MA & J Tripodi Pty Ltd v Swan Hill Chemicals Pty Ltd [2018] VCC 526; March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506; Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494; Masters Home Improvement Pty Ltd v North East Solution Pty Ltd [2017] VSCA 88; McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; Moffet V Dental Corporation Pty Ltd [2019] FCA 344; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd & Ors (2015) 256 CLR 104; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; Perpetual Ltd v Myer Pty Ltd [2018] VSC 2; Personnel Contracting Pty Ltd v CFMMEU [2004] 141 IR 31; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 25; Potter v Fair Work Ombudsman [2014] FCA 187; Pukallus v Cameron (1982) 180 CLR 447; Sellars v Adelaide Petroleum ML (1994) 179 CLR 332; Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Toteff v Antonas (1952) 87 CLR 647; Travel Compensation Fund v Tambree (2005) 224 CLR 627; Vouzas v Bleake House [2013] VSC 534; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; Woodside Energy Ltd v Electricity Generation Corporation (2014) 251 CLR 640; ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	M J Rivette	RM Commercial & Family Lawyers
For the Defendants	A M J Meagher	Hassett & Co

HIS HONOUR:

Introduction
1This is a regrettable case. It ran for 18 days, had a court book exceeding 3,300 pages and in addition to a lengthy transcript, generated over 400 pages of submissions – all for a case where the plaintiffs’ damages claim was about $200,000. It was extremely unfortunate that the parties, advised sensibly by counsel, could not have resolved the litigation in a manner which better exemplified the application of the overarching purpose referred to in the Civil Procedure Act 2010 (Vic) and did not involve such a disproportionate relationship between the amount in dispute and the resources (both of the parties and the Court) utilised to decide the dispute.
2In this case, the plaintiffs, Creative Smiles Pty Ltd (“Creative Smiles”) and Dr John Goodman (“Goodman”) are suing the defendants, Ekera Dental Pty Ltd (“Ekera”) and Dr Anthony Coulepis (“Coulepis”) regarding a dispute about the sale and acquisition of the Creative Smiles cosmetic dentistry business located in High Street, Armadale.
3Goodman is and was at all relevant times the sole director and shareholder of Creative Smiles. Goodman commenced practice as a dentist in about 1979. He established the Creative Smiles business in 2006. Since then he has owned and operated the practice which focused on reduced price cosmetic dentistry.
4Ekera is a corporate dental group which buys dental practices. It consolidates some services offered to the practices and uses its buying power to obtain dental equipment and related consumables at prices which reflect the significant volumes bought.
5Goodman sold the Creative Smiles business to Ekera in 2016. This was effected through an Acquisition Agreement for the purchase of the Creative Smiles business and a Services Agreement under which Goodman worked as the practice manager after the acquisition.
6Initially, there were two separate proceedings arising from the dispute between the parties. Later, the Court ordered that the claims be incorporated into a single proceeding. The claims raised are as follows:
(a)there are claims regarding the Acquisition Agreement and Services Agreement. The plaintiffs allege that Ekera breached these agreements and engaged in misleading and deceptive conduct in connection with them in contravention of the Australian Consumer Law (“the ACL”)[1]. There is also a claim for rectification;
(b)Goodman has claims against Ekera under the Fair Work Act 2009 (Cth) (“FWA”). He says that Ekera failed to pay him as an employee for the work which he performed under the Services Agreement. This includes claims for unpaid wages, superannuation and accrued leave entitlements as calculated under the Health Professionals and Support Services Award 2010 (“the Award”). Goodman contends also that the Court should award pecuniary penalties pursuant to section 546 (1) of the FWA; and
(c)the plaintiffs also sue Coulepis as an accessory to Ekera’s liability under the ACL and the FWA.
[1]The Australian Consumer Law is set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth)

7For its part, Ekera denies that it breached the Acquisition Agreement or the Services Agreement and that it acted in a misleading or deceptive manner in connection with either of the agreements. Ekera says that there is no basis for a rectification claim and denies that it has any responsibilities to Goodman under the provisions of the FWA.

Background
8Goodman created the Creative Smiles practice as a niche operation which focused on reduced price cosmetic dentistry.
9Goodman was aware that Australians were travelling overseas for cosmetic dentistry. He decided to create a business model which offered reduced price cosmetic dentistry to people who could not otherwise afford it.
10Two important elements of the practice were the high turnover of patients and cost control.
11The nature of the service offered was that patients usually had a specific problem to address. Once this was done, there was no need to return to Creative Smiles for further work. In this way, the practice was notably different from a standard dental practice where patients would usually return on a regular or semi-regular basis to see their dentist for check-ups or other dental needs such as fillings or extractions. A standard dental practice, unlike Creative Smiles, has a substantial amount of repeat business. The nature of the Creative Smiles business was such that Goodman had to use marketing to attract a continuing stream of new patients to the business. Goodman marketed the practice through television, radio, newspapers and digital platforms. Goodman engaged Goodman Digital, a business conducted by his son Anton, to provide marketing services to Creative Smiles.
12Goodman controlled costs by keeping a close watch on all expenditure associated with the business. During a lengthy career as a dentist, Goodman had struck deals with suppliers whereby, in return for continued patronage, he would obtain products or services at discounted prices.
13Goodman was also vigilant in relation to overheads and wages. He ran the Creative Smiles business so that the working dentists engaged at the practice from time to time were assisted by the lowest number of nurses and supporting staff which he considered reasonable.
14As he grew older Goodman developed a medical condition which prevented him from continuing to work full-time as a dentist. As a result, he engaged dentists to work at the Creative Smiles practice and Goodman himself adopted a largely administrative or managerial role in organising and running the day to day operations of the practice. Goodman’s responsibilities included employing the staff, organising the staff rosters, ordering supplies, arranging advertising and monitoring the financial performance of the business. Goodman would occasionally engage in some clinical work, but this occurred infrequently.
15The dentists whom Goodman engaged to work at the practice were independent contractors and not employees of Creative Smiles. Under the arrangements made between the parties, which appear to be reasonably common in dentistry circles, Creative Smiles provided professional rooms and support services for each dentist including a receptionist, equipment and billing assistance. In return, the dentist paid Creative Smiles 40% of the fee charged for work performed (exclusive of laboratory costs) and retained the remaining 60% for themselves.
16There were various dentists who worked at Creative Smiles including the following:
·Dr Reg De Sousa commenced working at the practice in April 2010;
·Dr Julie Vo commenced working at the practice in May 2010;
·Dr Reza Zamani commenced working at the practice in 2011; and
·Dr Namisha Bathia commenced working at the practice in September 2015;
·Dr Claudia Braybon commenced working at the practice as a dentist in 2016, prior to that she worked at the practice as a nurse for approximately two years;
·Dr Lisa Matthews commenced working at the practice in April 2016; and
·Dr Craig Woolward commenced working at the practice in August 2017.

All of the dentists operated with their own Australian Business Numbers and conducted their own individual businesses. The terms upon which the dentists worked at Creative Smiles remained broadly the same after Ekera acquired the practice.
17Towards the end of 2015, Goodman and Ekera discussed the possible sale of the Creative Smiles practice. Ekera began acquiring dental practices around 2014. The company’s aim was to aggregate a number of individual practices and then either sell them in the future or list the company on the Australian Stock Exchange.
18On about 30 December 2015, Goodman and Ekera signed a non-binding terms sheet for the sale of the Creative Smiles assets and practice to Ekera. This set out the framework for the basis upon which Ekera would proceed with the acquisition.
19In early 2016 Ekera’s solicitors prepared draft agreements. There was an agreement for the acquisition of the Creative Smiles business and a separate Services Agreement. Ekera sent the first draft of the agreements to Goodman on 12 February 2016. Between February and June 2016, Ekera prepared and sent to Goodman other versions of the two agreements. Goodman examined these agreements and the parties had discussions about them.
20After various discussions and changes to the draft documents, Creative Smiles, Goodman and Ekera entered into the Acquisition Agreement and Services Agreement on 30 June 2016. The sale of assets and goodwill under the Acquisition Agreement was conditional upon Goodman entering the Services Agreement.
21The Acquisition Agreement provided that Ekera would pay Goodman a purchase price of $5,139,300. There was an initial payment of $3,597,510 and then the balance of $1,541,790 was payable in two instalments:
(i)$770,895 on or before 31 August 2017. This payment would be reduced by one dollar for every dollar the EBITDA of the practice for the financial year ending 30 June 2017 was less than $926,000 (clause 4.3(d)(i)); and
(ii)$770,895 on or before 31 August 2018. Similarly, this payment would be reduced by one dollar for every dollar the EBITDA of the practice for the financial year ending 30 June 2018 was less than $926,000 (clause 4.3(d)(i)).

22The Services Agreement contained a variety of provisions including the following:
(a)   the practice principal does not work full time as a dentist in the dental centre but performs dental services from time to time (Recital B);
(b)   the practice principal manages the dental practice and it is the intention of the parties that he continue to manage the Practice on the terms and conditions herein (Recital C);
(c)   Dr Goodman exclusively engaged Ekera to provide him with support services at the dental centre when he is rostered on the roster (clause 3.1 (a));
(d)   Ekera would meet all expenses relating to the provision of the support services, including in respect of the employees, except as otherwise specified in this agreement (clause 3.1 (b));
(e)   “Roster” was defined as a roster of the days on which, and the hours during which, under the direction of the practice principal, rooms will be allocated to each dentist practising at the dental centre including the practice principal when he performs dental work (clause 1.1);
(f)    “Support Services” was defined as including (clause 1.1):
(i)a licence to use the rooms at the practice;
(ii)organising and scheduling patient appointments for the practice principal;
(iii)providing day to day ongoing management, accounting and administrative services to the dental centre and assisting the practice principal with issuing written quotations as required, and billing and collecting professional fees generated by the practice principal;
(iv)banking the practice principal's professional fees in the holding account of Ekera and accounting to the practice principal for the practice principal's fees after deduction of the fees and taxes specified in clauses 9.1 and 9.2(c);
(v)arranging payment of creditors incurred through the operations of the practice as directed by the practice principal from the practice principal’s net receipts;
(vi)providing suitable reception services and nursing support and assistant dentists and hygienists (if necessary) for the operation of the practice;
(vii)ordering all consumables, materials, drugs, dental requisites, instrumentation, apparatus, fittings, furniture, furnishings and supplies as reasonably required from time to time by the practice principal and maintaining suitable stock at levels consistent with the operation of this agreement;
(viii)maintaining a library of patient records and treatment plans;
(ix)paying laboratory fees on behalf of the practice principal;
(x)providing an IT solution for the practice, including transition to Ekera's IT system as contemplated by clause 7; and
(xi)providing, maintaining and repairing suitable plant and equipment to be maintained at standards consistent with the quality at the practice at the commencement of this agreement.

(g)   the relationship between the parties was that of principal (Goodman) and contractor (Ekera) with Ekera providing Support Services in return for a fortnightly service fee (clause 13.1(a);
(h)   this agreement did not create a relationship of employment, trust, agency or partnership or joint venture between the parties (clause 13.1(b);
(i)    Ekera must at all times respect the independence of Goodman and will not interfere with or seek to influence Goodman’s professional judgment in relation to the provision of Clinical Services (clause 13.2);
(j)    Ekera and Goodman must refrain from doing anything that may hinder the performance of the Services Agreement (clause 3.5 (c) and clause 4.4(d));
(k)   “Clinical Services” was defined as meaning the delivery of all day to day aspects of the operation of the dental practice to patients (clause 1.1); and
(l)    Goodman was to continue to manage and/or conduct the practice:
(i)in accordance with the same management principles applied prior to the acquisition of the practice by Ekera (clause 4.1);
(ii)with, inter alia, an emphasis on continuing to maximize the revenue and profitability of the practice (clause 4.3(b); and
(iii)pursuant to various other obligations and considerations set out in clause 4.4.

23Ekera calculated the 2018 EBITDA as being below the
$926,000 EBITDA target, and therefore paid Creative Smiles only $532,992 for the final payment pursuant to the Acquisition Agreement. Ekera says it accurately calculated the 2018 final payment pursuant to the methodology set out in the Acquisition Agreement. Creative Smiles alleges the 2018 EBITDA target would have been reached but for:
(a)Ekera’s breach of the Services Agreement by improperly interfering in the practice and failing to allow Goodman to continue to manage and or conduct the practice in accordance with the same management principles which applied prior to the acquisition of the practice by Ekera;
(b)the unlawful early termination of the Services Agreement; and
(c)wrongfully deducting the following amounts from the 2018 EBITDA calculations: $132,908.84, being an amount recorded as received but not banked by the dental practice; $6,824, being an amount claimed to be overcharging of laboratories; and $3,779, being an amount claimed to be owed to Ekera.

24Ekera denied the Acquisition Agreement was breached, or that it was not entitled to deduct the above sums from the calculation of the 2018 EBITDA. It also denied that it breached the Services Agreement and maintained that the early termination was valid and required to protect the practice.

25Ekera began its ownership of the Creative Smiles business on 1 July 2016. The dentists and staff at the practice were either employed by Ekera or entered into service contracts with Ekera.
26By about November 2016 it became apparent that there were issues between the parties regarding the management of the practice.
27One issue which concerned Ekera was how much Goodman spent on marketing. In November and December 2016, Ekera raised with Goodman how he was exceeding the marketing budget.
28Another matter of concern was Ekera’s difficulty reconciling the costs of the practice. This problem arose because Goodman did not pass onto Ekera for payment the invoices received at the practice until he was satisfied that the invoice was correct and payment was warranted. Ekera’s preferred approach was to receive all invoices each month and arrange for the accounts department at head office to make payment. If subsequently some adjustment was required, then Ekera addressed it at that time. The system which Ekera adopted kept a more accurate record of expenditure on a monthly basis and made it easier to track performance against the budgeted figures.
29To varying degrees these concerns persisted through 2017 and into 2018. In addition, some other significant issues arose about:
(a)the purchasing of supplies;
(b)staff concerns about Goodman and how he conducted himself as practice principal; and
(c)the loss of cash receipts from the practice.

30Ekera and Goodman disagreed about the procurement of supplies for the practice. In 2017, Ekera directed Goodman to obtain the necessary equipment, consumables and supplies from a particular shopping portal. Goodman felt that this directive limited his ability to keep his costs as low as possible and thereby enhance the practice’s ability to offer its half-price cosmetic dentistry. Further, and as a result, Goodman also believed that it affected his ability to achieve the full amount of his earn-out. Goodman was part of a co-op and believed that he could obtain supplies and consumables from his own suppliers for a lower cost.
31The dentists and staff at Creative Smiles had complaints about Goodman and how he ran the practice. Two of the dentists expressed their concerns to Ekera’s CEO at the Christmas party in December 2016. In April 2017, the dentist who generated the greatest revenue for the practice, Vo, wrote a letter to Ekera setting out a series of complaints about Goodman. Although Vo was the driving force behind the letter, the other dentists also signed the letter as they agreed with its substance (at least in so far as it affected them).
32In February 2018, the dentists wrote another letter of complaint to Ekera in which they threatened to cease work at the practice unless Ekera took effective action to address their concerns.
33Staff at the practice also complained about how they were treated – for example, time sheets were altered without consent, so they were paid less than the time spent at work; there were instances of alleged bullying and unfair criticism.
34In relation to missing cash:
·between 1 July 2016 and 30 June 2017, the dental practice failed to bank $12,554.80 recorded as received by the practice;
·between 1 September 2017 and 30 November 2017,the practice banked no cash despite the practice receiving $80,290.09 in cash from patients; and
·between 1 July 2017 and 28 February 2018, the dental practice failed to bank $120,354.04 which was recorded as received in cash.

35Due to the ongoing disharmony at Creative Smiles, Ekera decided that Goodman would not remain in the practice beyond the initial term under the Services Agreement. In late 2017, Ekera advised that its plan was for Christine Hughes (“Hughes”), whom Goodman had selected and trained to be his successor, to become practice manager. This was a key part of the transition to the time when Goodman no longer worked in the business.
36At a meeting on 20 February 2018, Coulepis gave Goodman a letter which released him from his work obligations under the Services Agreement and required that he stay away from the practice. Ekera said that it would manage the Creative Smiles business for the balance of the earn-out period to 30 June 2018. Ekera later blocked Goodman’s access to the Creative Smiles bank accounts, email system and computer networks. It also changed the locks at the practice.
37By letter dated 23 February 2018, Goodman denied any wrongdoing and sought to invoke the dispute resolution clause in the Services Agreement.

Jones v Dunkel
38In his submissions, Goodman asked the Court to draw adverse inferences against Ekera in accordance with Jones v Dunkel[2] because Ekera did not call witnesses including Dr Peter Hughes (“Dr Hughes”), David Taylor (“Taylor”) and Rhoda Maclean (“Maclean”). Goodman submitted that there was an unexplained failure by Ekera to call these witnesses and the Court should thereby infer that the uncalled evidence would not have assisted Ekera.
[2] 101 CLR 298
39I do not consider that there is anything of substance in this submission.
40Goodman accepted that Dr Hughes was no longer an employee of Ekera. Ekera submitted (as far as I could ascertain, without evidence) that Dr Hughes had not been a director or employee of Ekera for some considerable time. As to Taylor, Christelle Mavrikios (“Mavrikios”) gave unchallenged evidence that he left Ekera about 12 months before the litigation.
41It is well accepted that there is no property in a witness. That being so, there was no lawful impediment to Goodman contacting Dr Hughes or Taylor for the purpose of giving evidence at trial. It was open to the plaintiffs to subpoena either man for this purpose. There was no evidence, about the plaintiffs seeking to do this. In these circumstances, I consider the plaintiffs’ complaint is without substance.
42As to Maclean the evidence concerning her related to the direction from Ekera that Goodman should buy supplies for Creative Smiles from a nominated shopping portal. Goodman said that this both interfered with his right to manage the practice as he had before the acquisition by obtaining necessary supplies from his own sources and caused the expenses of the practice to be higher than they should be.
43This was not a major point in the case. Goodman’s evidence indicated that he continued to buy supplies from his own sources throughout his time as practice manager. He did not see himself as bound to observe every direction from Ekera. Moreover, Maclean reported to Mavrikios. Given that Mavrikios and Coulepis were senior employees of Ekera who gave evidence at trial, Goodman had ample opportunity to cross examine senior executives of Ekera who were closely involved in the acquisition and/or the integration of the Creative Smiles business into Ekera and were able to address all significant issues. I am not satisfied that hearing from Ms Maclean would have assisted me greatly. Especially when the duration of the trial was approximately double the estimate given by the parties, it was helpful to avoid spending time with witnesses of little relevance to the major issues.

Credit
44A matter of some significance in the case is the credit of the various witnesses.
45Goodman was the primary witness for the plaintiffs and gave evidence over a period of five days. There is substance in Ekera’s submission that Goodman made some implausible claims supported by implausible evidence. Goodman was frequently evasive when giving evidence and was often reluctant to answer questions directly. He had firm views which he took every opportunity to reinforce, whether or not it was directly relevant to the question.
46One aspect of the plaintiffs’ case is that, but for the wrongful termination of Goodman’s employment in February 2018, Creative Smiles would have exceeded the EBITDA target of $926,000 for 30 June 2018 and Goodman would have thereby received not merely the full earn-out to which he was entitled but possibly some additional payment consistent with clause 4.3(f) of the Acquisition Agreement. The plaintiffs argued that because of Ekera’s interference in the management of the practice and Ekera’s method of operation, the costs of running the practice after February 2018 increased. This in turn resulted in Creative Smiles not achieving the EBITDA target for June 2018 and a reduced payout to Creative Smiles.
47The plaintiffs pleaded and asserted at trial that, at the time of Goodman’s termination on 20 February 2018, the business was on track to exceed the EBIDTA target of $926,000.[3] The plaintiffs made no complaint about the financial year ending June 2017 so any allegations about Ekera’s interference in management causing cost increases in that year appear to be irrelevant.
[3]See Plaintiffs’ Further Amended Statement of Claim, [24]; transcript, 377 and court book, 1103
48The EBITDA year to date figures for Creative Smiles as at 31 January 2018 exceeded the budgeted figures for the same period. The budgeted EBITDA was $546,036 and the actual figure was $548,659.[4] It should be noted that the budgeted figure was referable to the budget prepared for the Creative Smiles business. This assumed an annual EBITDA for the financial year ending 30 June 2018 of $979,939. This was a higher figure than the $926,000 which was the figure against which Goodman’s earn-out entitlement was assessed. The budget figure was irrelevant to that assessment. Goodman said that the significance of the $548,659 was that it meant Creative Smiles was on track to at least meet, if not exceed, the earn-out trigger of $926,000. Also, if the EBITDA exceeded that figure, then Goodman could receive some additional payment beyond the $770,895 provided for in the Acquisition Agreement.
[4]Court book, 764
49The books of account of the business set out the relevant financial position of the business in the period February to June 2018. The various profit and loss summaries over that time set out a comparison month to month of income earned and expenses incurred during each month and in the financial year to date. The summaries also compared the monthly and year to date figures with the budget for the 2018 financial year together with the percentage variation from the budget.
50The summaries for the period January 2018 to June 2018 are as follows:[5]
[5]Court book, 754

Ekera Dental Profit & Loss Summary – Creative Smiles Armadale For the period ending January 31, 2018
Actual	Budget	Variation percentage
Dental Income	197,354	227,984	-13%
Total Income	197,354	227,984	-13%
Costs of Services Rendered	88,089	122,025	-28%
Gross Profit	109,264	105,959	3%
Total Overhead Expenses	47,880	62,536	-23%
Practice EBITDA	61,385	43,422	41%

Ekera Dental Profit & Loss Summary – Creative Smiles Armadale For the period ending February 28, 2018
Actual	Budget	Variation Percentage
Dental Income	246,103	333,207	-26%
Total Income	246,103	333,207	-26%
Costs of Services Rendered	147,895	178,344	-17%
Gross Profit	98,208	154,863	-37%
Total Overhead Expenses	67,261	71,250	-6%
Practice EBITDA	30,947	83,613	-63%

Ekera Dental Profit & Loss Summary – Creative Smiles Armadale For the period ending March 31, 2018
Actual	Budget	Variation Percentage
Dental Income	241,469	333,207	-28%
Total Income	241,469	333,207	-28%
Costs of Services Rendered	140,160	178,344	-21%
Gross Profit	101,308	154,863	-35%
Total Overhead Expenses	58,970	71,383	-17%
Practice EBITDA	42,338	83,480	-49%

Ekera Dental Profit & Loss Summary – Creative Smiles Armadale For the period ending April 30, 2018
Actual	Budget	Variation Percentage
Dental Income	260,996	315,670	-17%
Total Income	260,996	315,670	-17%
Costs of Services Rendered	127,862	168,958	-24%
Gross Profit	133,134	146,712	-9%
Total Overhead Expenses	57,353	71,319	-20%
Practice EBITDA	75,781	75,393	1%

Ekera Dental Profit & Loss Summary – Creative Smiles Armadale For the period ending May 31, 2018
Actual	Budget	Variation Percentage
Dental Income	304,906	385,819	-21%
Total Income	304,906	385,819	-21%
Costs of Services Rendered	159,475	206,504	-23%
Gross Profit	145,431	179,315	-19%
Total Overhead Expenses	75,159	71,440	5%
Practice EBITDA	70,272	107,874	-35%

Ekera Dental Profit & Loss Summary – Creative Smiles Armadale For the period ending June 30, 2018
Actual	Budget	Variation Percentage
Dental Income	259,876	333,207	-22%
Total Income	259,876	333,207	-22%
Costs of Services Rendered	128,136	178,344	-28%
Gross Profit	131,740	154,863	-15%
Total Overhead Expenses	90,900	71,319	27%
Practice EBITDA	40,840	83,543	-51%

51The defendants cross-examined Goodman about these financial records. Ultimately, Goodman conceded that the Creative Smiles business failed to meet the EBITDA target in the financial year ending 30 June 2018 due to a lack of income rather than expenses being too high. With the exception of April 2018, the other months evidenced a reduction in revenue and expenses relative to the budget. This is consistent with what one would expect – if more patients are treated and procedures performed, the cost of providing those services will correspondingly increase. Again, due to the correlation, when patient numbers decline the cost of providing services also reduces.
52Only reluctantly did Goodman concede the facts indicated by the figures. Some of his answers were evasive and he was unwilling to acknowledge the obvious. At one point, he sought to avoid an answer on the basis that he wasn’t an accountant or an expert[6] – even though he created and ran the business and had an intimate knowledge of its workings, both operational and financial.
[6]Transcript, 82
53I am satisfied that the failure by the business to achieve the EBITDA threshold in the financial year ending 30 June 2018 was due to a lack of income in and after February 2018 rather than the business incurring excessive costs and expenses. I reject any claim that Ekera caused the shortfall by interfering in Goodman’s management and causing the business to incur excessive expenses. That Goodman made such claims and persisted with them despite the inconsistent contemporaneous evidence does not reflect well on his credit.
54Secondly, Goodman was critical of how Ekera managed the dentists’ leave in 2018. He suggested that, had he continued working at the practice and managed their leave, the financial performance of the business would have been better.
55Goodman’s evidence did not set out in any detail a plan to cover the dentists’ leave beyond asking the existing dentists to do more work. Because they were independent contractors and some worked in other practices, Goodman hoped that they could take on extra work at the Creative Smiles practice. He thought they could do an extra few hours or longer depending upon their availability.[7] Goodman was definite that there was no point in using a locum. Goodman intimated that he discussed the situation with Mavrikios before she sent him an email on 15 February 2018 attaching a table which showed that there was a sizeable amount of dentist leave expected over the coming months. Mavrikios asked Goodman what plans he had to address this. Goodman said that the comment in his email to her of 1.06pm that day that “Its (sic) really not worth it” was a response to the discussion in which he said that it was not worthwhile to get a locum.[8]
[7]Transcript, 395
[8]Court book, 1012
56Some of Goodman’s evidence about his management of dentists on leave and protection of revenue was inconsistent or exaggerated. At one point, Goodman said that he could have handled the dental leave for the period from February to June 2018 as he had done in the previous 12 years. He said that his plan – persuading the existing dentist contractors to undertake more work to cover for their missing colleagues – “always worked”.[9] This answer implied that revenue remained consistent during past holiday periods and did not materially decrease.
[9]Transcript, 396
57Elsewhere, Goodman acknowledged that his plan did not always work 100% of the time – it was more art than science. Because Goodman’s plan depended upon the availability and goodwill of the dentists at Creative Smiles, there could be no guarantees that his plan would have necessarily prevented a decrease in revenue.
58The Grant Thornton due diligence report of June 2016 cast doubt over Goodman’s claimed ability to substantially maintain revenue when dentists were away. The two biggest earners in the practice in the 2014 and 2015 financial years were De Sousa and Vo. De Sousa went to Ireland to visit family for a few months in the 2014 financial year. The following financial year, Vo worked less due to the birth of her first child. In circumstances where the top three dentists generated about 60% of the revenue for the practice revenue dropped by 20% in the 2014 financial year[10] compared to the 2013 financial year and a further 9% in the 2015 financial year.[11] Ultimately, Goodman conceded that having dentists on leave contributed to the reduction in revenue. He also agreed that, if a new dentist were hired to replace an outgoing dentist, the new dentist would not necessarily pick up all the patients and work of the retiring dentist. Some patients might follow the latter or go to another practice.
[10]Court book, 3357
[11]Court book, 3355
59The other important matter to be borne firmly in mind is that all the dentists indicated to Ekera in February 2018 that they would cease working at the practice on 1 March if Goodman were not removed. While Goodman argued that there were some uncertainties about the legitimacy of this threat and whether the dentists could lawfully act as they suggested, in my view, it is highly likely that, at a minimum, there would have been a period of work disturbance and an interference with the usual operations of the practice. That being so, I consider it highly likely that the revenue of the practice would have been adversely affected.
60Goodman said that before his employment was terminated, he had actually spoken to Chrissie Hughes about arranging the other dentists to cover for the forthcoming holiday leave. This was not put to Hughes in cross-examination.
61For reasons which I am about to discuss, I doubt whether Goodman would have entrusted Hughes with this significant responsibility. Assuming his criticisms of her were justified. I do not believe that he would have entrusted this important responsibility to her. Goodman was extremely keen to make money and he would have wanted to be involved in ensuring the least possible disruption to the revenue of the practice. Goodman would have thought that no one at Creative Smiles was as relentlessly focused on maximising profits as he was.
62This means that Goodman’s evidence about the dentists’ leave is unlikely to be reliable: either the criticisms of Hughes were justified and he did not give her the task for managing the dentists leave or Goodman did give her this task and Hughes was not nearly so bad an employee as Goodman made out.
63In his letter to Ekera on 14 February 2018, Goodman said that he was concerned about a number of issues regarding Hughes.[12] Goodman said that he strongly suspected that she was a drug addict. Broadly, his concerns related to her manipulative, deceptive and irritable behaviour, absenteeism, organising rosters to suit herself, her physical appearance, her mood changes, her inability to cope with work and lying about her starting times at work. Goodman’s letter said that he thought the situation was very serious and he was concerned about the relationships between him, Ekera and other staff and dentists arising from her manipulative behaviour, and the deterioration of the Creative Smiles practice in general. Goodman specifically said that he was worried about the potential for loss of cash and a Workcover claim. The latter arose from Hughes using words like “bullying” and “harassment” which suggested she might make such a claim. Goodman said that Hughes’s behaviour appeared to have “worsened dramatically in the last few months” and that Goodman had made “a terrible error of judgment in employing and trusting her and promoting her to you”. In short, Goodman’s criticism was scathing, and a person might reasonably have wondered how Goodman could ever have employed such an individual at the practice.

[12]Court book, 202
64In cross-examination, counsel asked Goodman about the issue of organising the dentists to undertake additional shifts to cover the dentists on holidays. Counsel queried why Goodman would assign this work to a drug addict who was untrustworthy, deceptive, erratic and whose employment as Goodman’s successor as practice manager was a major mistake. Goodman said:
“Chrissie could be functional, she might start off in the morning not being so functional and as the day went on, she could become functional. I didn’t say she wasn’t totally functional 100% of the time, I said I had fears about substance abuse and its effect overall. The things that I put in the letter, I don’t need to go into all of those in detail. But she could still be functional. But there’s many – there’s many – just put it bluntly, there’s many drug addicts out there who have fulltime jobs and function quite well, as long as they have got the drugs in them.”[13]
[13]Defendants’ Outline of Closing Submissions, [272]
65Goodman’s evidence on this topic is puzzling. Goodman himself engaged Hughes to work at the practice and groomed her to succeed him as practice manager.
66On 22 November 2017, Coulepis emailed Goodman expressing his appreciation for Goodman’s help in developing Hughes as his successor.[14] Coulepis said that Goodman’s team thought that Hughes was a great addition to Creative Smiles. Goodman responded by email later the same day saying:
“Thanks Tony.
You won’t get better than Chrissie.
She is incredible.
You will have to continue looking after her very well.”
[14]Court book, 3375
67It appears that less than three months before his February 2018 communication to Ekera, Goodman was extremely enthusiastic about Hughes and full of praise for her work. Goodman plainly thought that Hughes had a great future at Creative Smiles and told Coulepis that Ekera would need to look after her – the inference being that she was a highly competent and valued employee. Neither the documentary nor oral evidence explains satisfactorily when the problem with Hughes commenced. However, if her behaviour had “worsened dramatically”[15] in the last few months before mid-February 2018 as Goodman stated in his note to Ekera, then I would presume the problems were evident in the prior November. The email quoted above gives no such indication. Goodman’s conflicting comments about Hughes cannot be reconciled easily.
[15]Court book, 202
68There are some other observations to make on this topic. First, no other witness at the trial suggested that Hughes abused drugs. No other witness at the trial gave evidence that Hughes behaved badly in the ways identified by Goodman. Indeed, the other witnesses were, broadly speaking, critical of Goodman and his behaviour and supportive of Hughes.
69Next, when she gave evidence, Hughes did not present as someone who had an unhealthy relationship with drugs. Unlike the person described by Goodman, her hair did not appear to be greasy and unwashed; she did not look dishevelled; she did not slur her speech; she seemed to be a well presented, polite and professional young woman. In other words, I did not observe any of the physical traits Goodman wrote about in his February 2018 email.[16]
[16]There was no suggestion from Goodman that Hughes had undergone drug rehabilitation treatment to overcome her drug problems.
70Further, Goodman did not put to the dentists and staff who gave evidence that Hughes came to work and conducted herself in the manner described in Goodman’s email. Given the severity of Goodman’s criticism of Hughes and the significance of the allegations made, I would have expected Goodman to put these matters to Hughes and to those who interacted with her at the practice on a day-to-day basis.
71Finally, it was apparent at trial how keen Goodman was on making money. He acted in a calculated manner designed to maximise revenue and minimise expenses. I simply do not accept that he would have entrusted responsibility for covering the dentists’ holiday leave, and thereby protecting the revenue stream of the practice, to a person of the kind described in his February email.
72The result of this discussion about managing leave and Hughes is that I am concerned about the reliability and veracity of Goodman’s evidence. In short, I cannot accept Goodman’s evidence at face value. He is prepared to mislead and exaggerate when it suits his interests. The allegations made against Hughes in the February 2018 email to Ekera are also troubling. It suggests that Goodman is prepared to make grave and unwarranted allegations against a person where he considers that it might advance his own financial or other objectives.
73Another aspect of Goodman’s evidence which concerned me was his conduct towards Hughes in and after late 2017. On the recommendation of Goodman, Hughes began her employment at Creative Smiles in May 2017 as a trainee practice manager. Goodman specifically chose her with the intention that she become his successor as the person responsible for running the practice on a daily basis.
74There was no dispute that Goodman threw Hughes in the deep end from the outset of her tenure at the business. On her first day, Goodman directed Hughes to fire an employee of the practice. Goodman said that if she was going to be the practice manager, she needed to take on the responsibility straight away.[17]
[17]Transcript, 1395
75Until about January 2018, the working relationship between Goodman and Hughes was excellent. Goodman had confidence and faith in Hughes and they got on well. However, after Ekera, as part of the transition arrangement, decided in December 2017 that Hughes should become the practice manager, the relationship deteriorated significantly.
76Goodman became very critical of Hughes and her work. Goodman:
·said that Hughes was not really the practice manager and could not actually perform all of the tasks which Ekera had given her;
·gave her a first warning and said it was “three strikes and you’re out”. Goodman implied that he had the power to sack Hughes and had commenced that process;[18]
·said that Ekera was keeping Hughes on only until later in 2018, but planned to replace her in the business;[19]
·said to Hughes that some of the dentists and staff thought that the power of her new position had gone to her head and that the practice was not functioning very well.[20] Goodman said that some person or persons had commented to him that Hughes was “not nearly ready to be practice manager yet”; and
·accused Hughes of disloyalty to him in following the instructions of her employer.
[18]Transcript, 1385
[19]Court book, 997
[20]Court book, 988

77These comments were not supported by the evidence. To that extent, they were untrue and without any factual foundation. There is no doubt that Ekera appointed Hughes as practice manager with effect from December 2017. Goodman had no power to threaten Hughes with dismissal – he was not her employer. There was no suggestion in the evidence that Ekera planned to sack Hughes and replace her later in 2018. Indeed, at the time of trial, Hughes remained an employee of Ekera. Senior Ekera personnel were supportive of Hughes in her difficulties with Goodman and the evidence revealed no adverse comments about Hughes by dentists or staff at the practice. On the contrary, they seemed supportive of Hughes and critical of Goodman. Goodman produced no evidence of critical comments made by the dentists or staff. Nonetheless, in order to assist himself and protect his own interests, Goodman was prepared to make false and unpleasant statements to, or allegations about, Hughes.
78My concern about Goodman’s credibility is heightened because he is not a simple, guileless person. Rather, he is highly intelligent and well able to manipulate facts to suit his ends. He is capable of framing self-serving evidence designed to increase the amount of money available to him directly, or indirectly, through Creative Smiles. Overall, while I accept parts of what Goodman said, I have reservations about his evidence on contested points where he disagrees with Ekera’s witnesses. Generally speaking, I prefer the evidence of those witnesses to that of Goodman.
79Coulepis spent a lengthy period giving evidence. He was measured and careful with his answers. Much of his evidence was supported by contemporaneous documents. He made concessions where they were warranted and generally tried to answer questions directly and honestly. I consider that he was largely a trustworthy witness whose evidence I could accept. Where his evidence of conversations or meetings conflicted with Goodman’s evidence, I would prefer the evidence of Coulepis.
80Much of the evidence given by the other Ekera witnesses was often not particularly contentious and was given by reference to various emails and other contemporaneous documents. I found that Mavrikios, Elliot Opolion (“Opolion”), Greg Knappstein (“Knappstein”) and Hughes gave their evidence in a direct and uncomplicated way. I am satisfied that they sought to tell the truth and were reliable and credible witnesses.
81Each of the dentists and staff who were called gave their evidence in a straight-forward manner. They answered questions directly and did not seek to dissemble or deflect. Much of the evidence was repetitive and related to matters which were the subject of contemporaneous correspondence. Overall, they were reliable and credible witnesses who sought to tell the truth.

Issues
82On the basis of how the trial was conducted and the evidence led, the parties agreed that the issues to be determined by the Court were as follows:
Misrepresentation Claims – Australian Consumer Law (ACL):
·Issue 1: Were the representations that Goodman would be appointed by Ekera as the practice principal for a minimum period of two years misleading or deceptive within the meaning of section 18 of the ACL?
·Issue 2: Were the representations that Goodman would as practice principal be allowed to continue to manage the practice using the same management principles he had applied prior to acquisition, misleading or deceptive within the meaning of section 18 of the ACL?
·Issue 3: Were representations made that Ekera would not interfere with the management by Goodman of the practice after its acquisition from Creative Smiles, and if so were the representations misleading or deceptive within the meaning of section 18 of the ACL?
·Issue 4: Was the conduct in making any of the representations in issues 1 to 3 misleading or deceptive conduct within the meaning of section 18 of the ACL, and if so what:
(a) compensable loss or damage did Creative Smiles suffer as a result; and/or
(b) compensable loss or damage did Goodman suffer as a result?

Contract Claims – Services Agreement:
·Issue 5: Should clause 2.1 of the Services Agreement be rectified to conclude on 30 June 2018?
·Issue 6: Was the termination of the Services Agreement on 20 February 2018 in breach of the agreement?
·Issue 7: Did Ekera refuse to follow the dispute resolution procedure in clause 20 of the Services Agreement, and was its conduct in breach of the agreement?
·Issue 8: Did Ekera breach the terms of the Services Agreement through:
(a)interfering in the manner in which Goodman managed the practice after acquisition; or
(b)through conduct that was inconsistent with the terms of the Services Agreement, and in particular clauses 3.5 (c), and 13.2; and/or
(c)engaging in conduct that prohibited Goodman from managing and/or conducting the practice in accordance with clauses 4.1 and 4.3(b) of the Services Agreement?

Contract Claims – Acquisition Agreement:
·Issue 9: Did Ekera breach the express and/or any implied terms of the Acquisition Agreement through breaching the Services Agreement, given that it is common ground that they are interrelated and must be read together?
·Issue 10: Did Ekera breach the terms of the Acquisition Agreement through deducting $237,903 from the 2018 purchase price instalment. This requires the Court to determine whether:
(a)any missing cash could be properly deducted from the calculation of the EBITDA;
(b)the remaining deductions made by Ekera could be properly deducted from the calculation of the EBITDA;
(c)any failure to reach the 2018 EBITDA target was caused by Ekera, or contributed to by any breaches of the Services Agreement by Ekera;

·Issue 11: If a breach occurred, what is the compensable loss of Creative Smiles Pty Ltd and/or Goodman, whether by reference to the 2018 earn-out payment that should have been made, or otherwise?

Employment Claims:
·Issue 12: Was Goodman in his capacity as practice principal and practice manager of the practice an employee of Ekera for the purposes of the Fair Work Act 2009 (Cth)?
·Issue 13: If Goodman was an employee:
(a)what amount is he entitled to receive for unpaid wages, unpaid superannuation, unpaid leave and entitlements for pay on public holidays; and
(b)what penalties should be paid by Ekera and/or Coulepis, and to whom should they be paid?

·Issue 14: If yes to issue 12, does the amount payable to Goodman or any penalty affect the EBITDA calculation and/or the award of damages pursuant to contract or the ACL?

The misrepresentation claim
General comments about the misrepresentation claim

83Goodman alleged that during the period from about December 2015 to 30 June 2016, Ekera engaged in misleading and deceptive conduct within the meaning of section 18 of the ACL. The conduct in this case was pleaded to be both verbal and written representations made by Ekera to Goodman. The verbal representations consisted of various conversations which took place between Goodman and representatives of Ekera.
84The plaintiffs alleged that Ekera made three representations to them, namely:
(a)if Creative Smiles sold its business and assets to Ekera, Goodman would be appointed by Ekera as the practice principal for a minimum period of two years after completion of the sale;
(b)as the practice principal Goodman would be allowed to continue to manage the practice using the same management principles he had applied prior to acquisition; and
(c)Ekera would not interfere with the management by Goodman of the practice after its acquisition from Creative Smiles.

85In general terms, Ekera contended that:
(a)while initially it represented to Goodman that Ekera would appoint him as practice principal for a minimum period of two years after completion of the sale, the representation later changed. In any case, it was not misleading or deceptive conduct in the context because the situation altered during the negotiation process and there were reasonable grounds for making the future representation at the time it was made;
(b)it did not represent to Goodman that as practice principal he would be allowed to continue to manage the practice using the same management principles he had applied prior to acquisition. Alternatively, Ekera contended that, even if the representation were made, it was qualified by the context. Again, there were reasonable grounds for the future representation at the time it was made; and
(c)it initially represented that it would not interfere with Goodman’s management of the practice after the acquisition from Creative Smiles. But in the context the representation was not misleading or deceptive. Again, Ekera had reasonable grounds for the future representation;

86In each case, the Court needs to determine whether the representations alleged by the plaintiffs were made in such a context as to be misleading or deceptive within section 18 of the ACL.
87After summarising the applicable legal principles regarding the claims for misleading and deceptive conduct, I will examine each representation in turn.

Applicable legal principles

88For conduct to be misleading or deceptive or likely to mislead or deceive, section 18(1) of the ACL requires that:
·     a person;
·     in trade or commerce;
·     engage in conduct;
·     which is misleading or deceptive or likely to mislead or deceive.
89The key principles in determining whether conduct contravening the ACL has occurred were set out by McHugh J in Butcher v Lachlan Elder Realty[21] and summarised by Macaulay J in Vouzas v Bleake House[22]. In short those principles were:
·whether the conduct is misleading or deceptive is a question of fact;
·it is an objective test;
·in determining whether a contravention of section 18 has occurred the relevant course of conduct must be examined as a whole, taking into account the relevant surrounding facts and circumstances;
·the effect of any relevant statements or actions or any silence or inaction must be considered in the context of the whole course of conduct;
·where the alleged contravention relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole; and
·where a document is involved the Court must have regard to all the conduct of the maker in relation to the document including the preparation, distribution, and any statement, action, silence or inaction in connection with the document.
[21] (2004) 218 CLR 592, [109]
[22] [2013] VSC 534, [107]

90The question of whether conduct is misleading or deceptive is an objective test and a question of fact to be answered in the context of the relevant surrounding facts and circumstances.[23] In Lezam Pty Ltd v Seabridge Australia Pty Ltd,[24] Sheppard J said:
“Obviously the evidence needs to be looked at as a whole and put in context. There may be cases in which it will be found that later statements, whether written or oral, replace those made earlier or affect or modify them in some way...”[25]
[23]Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592
[24](1992) 35 FCR 335
[25]Ibid, 541
91In this case, the context within which the representations were made was during the negotiations that took place between Goodman and Ekera regarding the sale of the Creative Smiles practice. The effect of statements made in the course of complex and protracted negotiations must be assessed by examining the conduct in its entirety, rather than determining the truth or falsity of individual statements in isolation.[26]
[26]Delaney v Delaney [2021] VSC 365, [440]
92Looking at the context within which a representation was made, conduct will be said to be misleading or deceptive if it is capable of leading a person into error.[27] Error occurs when a person is led to believe things that are not true or correct.[28] The conduct does not need to be fraudulent or negligent – an innocent misrepresentation may contravene section 18.[29] In addition, it is not necessary for Goodman to show that Ekera intended to mislead or deceive. The statutory prohibition is concerned with the consequences which flow from the alleged misleading or deceptive conduct, not what Ekera intended when making the representation.[30]
[27]Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198
[28] Ibid
[29] Ibid
[30]Ibid and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216, 228
93Generally, conduct is pleaded as a representation which may be something written, something oral, a gesture, silence or a combination of these things. In this case, the plaintiffs alleged that the representations made by Ekera were made both verbally and in writing in the time leading up to, and including, the signing of the Acquisition Agreement and Services Agreement. Insofar as they were made in writing, they were in part contained in the non-binding terms sheet signed by Goodman and Ekera dated 30 December 2015 and confirmed as express terms in either the executed Acquisition Agreement or the executed Services Agreement.

94Further, the plaintiffs pleaded the representations as ones regarding the future.[31] An important distinction arises between a representation of present fact and a representation in respect of a future matter.
[31]         Plaintiffs’ Further Amended Statement of Claim, 1087
95Section 4(1) of the ACL provides that a representation as to a future matter is deemed misleading unless the representor had reasonable grounds for making the representation. Section 4(2) of the ACL then requires the representor to adduce evidence showing that it had reasonable grounds for making the representation. The representation is therefore taken to be misleading unless the representor establishes by admissible evidence that it had reasonable grounds for making it.
96The question of whether a representation was made on reasonable grounds will be determined with reference to the information that was available at the time the representation was made.[32] Simply because a representation was made honestly does not necessarily mean that there were reasonable grounds for making it.[33]
[32]        McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, [198]
[33]        Cummings v Lewis (1993) 41 FCR 559, 565
97In accordance with section 236(1) of the ACL, for the cause of action to be made out it is necessary to show that the loss and damage suffered arose because of the conduct and the plaintiffs’ reliance on that conduct.
98Section 236(1) of the ACL provides that:
“If:
(a) a person (the claimant) suffers loss or damage because of the    conduct of another person; and

(b) the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.”

99The Court of Appeal in BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Services GmbH & Co KG[34] laid out a helpful summary of the relevant principles governing the question of causation and loss under the predecessor to the ACL, namely the Trade Practices Act 1974 (Cth)[35] as follows:
[34] [2014] VSCA 338, [540]
[35]        Trade Practices Act 1974 (Cth)
“(1) A plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage it has suffered in consequence of its altering its position under the inducement of the misrepresentations made by the defendant;[36]
[36]        Toteff v Antonas (1952) 87 CLR 647, 650
(2) Under s 82(1) of the TPA, as under the common law, a plaintiff can only recover compensation for actual loss or damage incurred, as distinct from potential or likely damage;[37]
[37]Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 525, referring to March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506
(3) In determining whether a plaintiff has suffered loss or damage under s 82(1), it is usually necessary to compare the position that the plaintiff is in having been misled, with the position it would have been in but for the misrepresentation; by undertaking this comparison a court can determine whether the plaintiff is worse off as a result of relying upon the misrepresentation made by a defendant;[38]
[38]Toteff v Antonas (1952) 87 CLR 647, 650; Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, 12; Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494, 512-3 [41]–[42], 514–15 [48]–[52]; Henville v Walker (2001) 206 CLR 459, 470–1 [19]–[21], 509 [162]
(4) Section 82 requires identification of a causal link between loss or damage and conduct done in contravention of the Act;[39] the question of causation is relative to the purpose of s 82, applied to the circumstances of a particular case;[40]
(5) Determining the question of causation will often involve considering how much worse off the plaintiff is as a result of entering into the transaction which the representation induced it to enter than it would have been had the transaction not taken place. This entitles the plaintiff to all the consequential loss directly flowing from its reliance on the representation, at least if the loss is foreseeable;[41]
(6) Analysing the question of causation only by reference to what is, in essence, a ‘but for’ test has been found wanting in other contexts and it should not be treated as an exclusive test of causation under s 82 of the TPA either;[42] especially where there is more than one cause of the loss;[43]
(7) It is relevant to ask what the plaintiff would have done had it not relied on the representation;[44]
(8) As the judge recognised here,[45] there are cases where if the contravening conduct had not occurred which misled the plaintiff, the plaintiff would not have embarked upon the project or transaction at all[46] (the ‘no transaction cases’), and there are cases where if the plaintiff had not been misled it would still have embarked upon the project or transaction, but would have done so by entering into an alternative arrangement with the same party or a different party[47] (‘alternative transaction cases’);
(9) A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted;[48]
(10) A court should not engage in speculation about multiple possibilities of past hypotheticals to which no specific evidence was directed;[49]
(11) Once the causal connection is established, there is nothing in s 82 of the TPA which suggests that the amount that may be recovered under that section should be limited by drawing some analogy with the law of contract, tort or equitable remedies;[50]
(12) If the defendant’s breach has ‘materially contributed’ to the loss or damage suffered, it will be regarded as a cause of the loss or damage, despite other factors or conditions having played an even more significant role in producing the loss or damage. As long as the breach materially contributed to the damage, a causal connection will ordinarily exist even though the breach without more would not have brought about the damage;[51]
(13) In exceptional cases, where an abnormal event intervenes between the breach and damage, it may be right as a matter of common sense to hold that the breach was not a cause of damage. But such cases are exceptional.[52]”
[39]Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494, 512–13 [41]–[42]
[40]        Travel Compensation Fund v Tambree (2005) 224 CLR 627, 639 [30]
[41]Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, 14-15
[42]Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494, 512 [41]–[42]; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 533; Chappel v Hart (1998) 195 CLR 232, 255–6 [62]; Travel Compensation Fund v Tambree (2005) 224 CLR 627, 642–3 [45]; Abigroup Contractors Pty Ltd v Sydney Catchment Authority [No 3] (2006) 67 NSWLR 341
[43]        Henville v Walker (2001) 206 CLR 459, 509 [163]
[44]        Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, 13
[45]See BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338
[46]Henville v Walker (2001) 206 CLR 459; Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413
[47]Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494
[48]        Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494, 514 [48]–[49]
[49]Abigroup Contractors Pty Ltd v Sydney Catchment Authority [No 3] (2006) 67 NSWLR 341, 354-5 [59]–[61]
[50]Marksv GIO Australia Holdings Ltd (1998) 196 CLR 494, 503 [15], 510 [38], 529 [102]–[103]
[51]Henville v Walker (2001) 206 CLR 459, 493 [105]–[106]
[52]Ibid
100If it is established that Ekera contravened section 18 of the ACL, Creative Smiles, as the victim of the misleading and deceptive conduct, will therefore be entitled to damages to compensate it for any loss suffered so as to place it in the position it would have been in had it not been induced by Ekera’s allegedly misleading and deceptive conduct. Alternatively, the Court can grant any order that it thinks fit to prevent loss being suffered as a result of the breach.[53]
[53]Schedule 2 of the Competition and Consumer Act 2010 (Cth), section 243

Issue 1: Were the representations that Goodman would be appointed by Ekera as the Practice Principal for a minimum period of two years misleading or deceptive within the meaning of section 18 of the ACL?
101The plaintiffs pleaded that:[54]
“(7) During the period from about December 2015 to 30 June 2016, Ekera represented to Creative Smiles and to Goodman that if Creative Smiles sold its business and assets to Ekera that:
…
(c) Goodman would be appointed by Ekera as the Practice Principal for a minimum period of two years after completion of the sale…”[55]
[54]Plaintiffs’ Further Amended Statement of Claim, [7(c)]
[55]Court book, 1086
102At paragraph 31 of its Further Amended Statement of Claim (“FASOC”),[56] the plaintiffs said that by reason of the matters alleged at paragraphs 20 – 22,[57] Ekera did not have reasonable grounds for making the representation. The plaintiffs alleged in paragraph 32 that the Ekera representations were false or misleading because:
“(e) Ekera did not comply with its obligations as set out in the Services Agreement including the unlawful termination of Goodman’s services.”
[56]Court book, 1106
[57]Court book, 1096 – 1102
103Paragraphs 20-22 of the FASOC assume some significance in this context. Paragraph 20 pleads the various ways in which the plaintiffs contend that between about July 2016 and February 2018 Ekera:
“….prevented the proper exercise by Goodman of the Goodman Management Rights, failed to respect the independence of Goodman in the management of the Practice; and further interfered with Goodman’s judgment in relation to the provision of Clinical Services for the entire Practice…”
104Paragraph 21 of the FASOC addressed what the plaintiffs said was the wrongful termination of the Services Agreement. Paragraph 22 of the pleading alleged that between 23 February 2018 and 24 April 2018, inter alia, Ekera denied that the termination of the Services Agreement was unlawful and refused to comply with the Services Agreement dispute resolution procedure.
105Broadly speaking, Ekera denied the various allegations made against it in this context.

Pleadings
106The defendants submit that the plaintiffs did not particularise in their FASOC their allegation in relation to the first of the three representations, namely, that if Creative Smiles sold its business and assets to Ekera, Goodman would be appointed by Ekera as the Practice Principal for a minimum period of two years after completion of the sale.
107In paragraph 7(a) of the plaintiffs’ FASOC, the plaintiffs plead that the defendants represented that if Creative Smiles sold its business and assets to Ekera, Goodman would continue to run his personal dental practice for a minimum period of two years after completion of the sale.
108In a request for further and better particulars dated 9 June 2021, Ekera asked that, to the extent that it was alleged that any of the allegations in paragraphs 7(a) – 7(h) were verbal, the details of these allegations be provided. The plaintiffs provided the following particulars in response:
“Insofar as the Ekera Representations were verbal, they consisted of various in person and telephone conversations over the period ranging from approximately late 2015 to 30 June 2016 and were between Goodman and Mr Tony Coulepis, Mr Peter Hughes, Mr Rob Harwood and Ms Christelle Mavrikios.”
109The defendants say that it is not apparent from the pleadings what matters the plaintiffs are entitled to rely on to establish this two-year representation.[58]
[58]Defendants’ Outline of Closing Submissions, [349]
110Rule 13.10(1) of the County Court Civil Procedure Rules 2018 (Vic)[59] requires that every pleading contains the necessary particulars of any fact or matter pleaded. Without limiting paragraph (1), Rule 13.10(3)(a) states that every pleading shall contain particulars of any misrepresentation which is alleged. It is the object of particulars to inform the other side of the nature of the case which it has to meet so as to prevent the other side from being taken by surprise at trial, to enable the other side to know what evidence to be prepared with, and to limit the generality of the pleadings.
[59] County Court Civil Procedure Rules 2018 (Vic)
111On their face, the particulars provided by the plaintiffs in response to the June request do not sufficiently limit the generality of the pleadings in paragraph 7 of the FASOC. They particularise a period of about six months within which a number of in person and telephone conversations between Goodman, Coulepis, and others are said to have occurred. However, despite deficiencies in these particulars, it does not seem to me that the defendants were caught by surprise at trial. They were able to respond to the matters as pleaded and were not placed in a position of material disadvantage as a result. This assessment is strengthened by the fact that the issue was only raised in the defendants’ closing submissions rather than prior to the commencement of the trial.[60] If there were a real risk of major prejudice to the defendants, I would have expected them to raise the point earlier.
[60]Defendants’ Outline of Closing submissions, [344]
112In accordance with what was pleaded by the plaintiffs in their FASOC, the focus of this enquiry is whether the representation that was made by Coulepis during the negotiations was reasonable. It was not pleaded by the plaintiffs that Ekera was misleading and deceptive in changing the termination date in the contract from June to April 2018 without informing Goodman. The plaintiffs pleaded that it was misleading for Ekera to have made the future representation at the time it was made. While this point was not raised in the parties’ submissions, I note that this is an important distinction and is relevant to my analysis as to whether Ekera’s representation was misleading and deceptive.

Background
113I have referred above to the issue of the period for which Goodman would remain at the Creative Smiles practice after Ekera’s acquisition. It seems to be undisputed that the discussion about duration took place in 2015 before the parties made any agreements.
114The parties agreed upon some details to include in a non-binding terms sheet. The terms sheet contemplated that Goodman would enter into a Services Agreement to manage the practice for a minimum period of two years. The parties agreed on the terms sheet in order to facilitate Ekera conducting a due diligence exercise in respect of the Creative Smiles practice. The terms sheet states expressly that the:
(a)provisions of the terms sheet were not intended to be legally binding (save for some immaterial exceptions);[61] and
(b)the proposal embodied in the terms was subject to due diligence, contract and the approval of the Ekera board.
[61]Court book, 1217

To that extent, the indication of the two-year time period was not binding upon Ekera but only an indication of intent which was stated to be subject to change.
115Clause 2.1 of the first draft of the Services Agreement sent to Goodman on 12 February 2016 provided that, unless terminated under clause 12 or extended under clause 2, the agreement continued until 30 June 2018.
116On 29 March 2016, Ekera emailed further versions of the draft Services Agreement and Acquisition Agreement to Goodman. In this version of the Services Agreement, the initial term of the agreement was amended to conclude on 30 April 2018 unless terminated earlier or extended by agreement.
117Ekera sent additional versions of both agreements to Goodman in April, May and June 2016. Each of these versions retained the term whereby Goodman’s engagement under the Services Agreement concluded on 30 April 2018.[62] Goodman gave evidence that the discussions with the representatives of Ekera in late 2015 and early 2016 contemplated settlement occurring promptly. Goodman said that originally Ekera wanted to settle sometime around February 2016 but the parties then agreed to more realistically aim for settlement in April 2016.[63]
[62]There were six drafts of the Services Agreement prepared and sent to Goodman between 12 February 2016 and 14 June 2016. The final version of the agreement was executed on 30 June 2016. Clause 2.1 referred to 30 June 2018 only in the first draft. All later versions of the agreement in the court book referred to 30 April 2018.
[63]Transcript, 176
118When Ekera and Goodman conducted the contractual negotiations in relation to the Acquisition Agreement and Services Agreement, Ekera engaged solicitors to act on its behalf but Goodman did not. Goodman said that at no time during the negotiations did he retain lawyers to act for him or Creative Smiles.[64] Accordingly, as the agreements went through their various iterations, they were sent to Goodman personally for review and comment. Goodman did not explain in Court his decision not to retain lawyers. Judging from his extensive evidence in the witness box[65] and the character he displayed, I would infer that there were at least two likely explanations. First, he considered both that he knew better than anyone the nature of the business being sold and that he possessed the intellectual capacity and motivation to ensure that the written documents accurately represented the deal which he had made with Ekera. As the process of finalising the two agreements continued, Goodman dealt primarily with Mavrikios about changes to the draft agreements.[66] Secondly, he did not wish to incur the cost associated with retaining lawyers as he considered it to be unnecessary and thought it would needlessly reduce the amount of money he had.
[64]Transcript, 176 – 177
[65]Goodman gave evidence over about five days.
[66]Transcript, 191 – 192
119Goodman said that when he received a draft agreement from Ekera, he would go through it “intently or intensely”.[67] If there were points which Goodman wished to raise with Ekera he would do so.[68] It appears that Goodman well knew the termination date in the initial draft of the Services Agreement was 30 June 2018 and that it thereafter changed to 30 April 2018 in the draft document sent to him on 29 March 2016.[69] The document produced in the court book,[70] which I assume was a copy of the document which Goodman received from Ekera in March 2016, showed part of the changed date in blue type and included three blue boxes in the right hand margin of the page, each labelled “Deleted”.[71] Similar boxes appeared in the margin where other amendments were made to the document.[72]
[67]Transcript, 181
[68]Transcript, 181
[69]Transcript, 183 – 184
[70]Court book, 1465
[71]Court book, 1474
[72]See the draft Services Agreement commencing at court book, 1465
120An email from Mavrikios dated 24 April 2016 enclosed later drafts of the Acquisition Agreement and Services Agreement.[73] The termination date in this version of the Services Agreement remained 30 April 2018.[74] Goodman said that settlement was still thought to be imminent at this time even though there were some ongoing issues with the landlord and the transfer of the lease.[75]
[73]Court book, 1557
[74]Court book, 1566
[75]Transcript, 191
121On 2 May 2016, Mavrikios sent Goodman another version of the Services Agreement. By this time, Goodman said that he discussed any major points or changes with Mavrikios rather than Dr Hughes.[76]

551When conducting an annual wage review, the FWC must ensure that all relevant persons and bodies have a reasonable opportunity to make submissions to the FWC (section 298(1)). The FWC must publish all submissions received in connection with a particular review (section 289(2)) unless the FWC is satisfied that the submissions contain information which is confidential or commercially sensitive (section 289(3)). In that case, the FWC may publish a summary which does not disclose the sensitive material or can advise that confidential and commercially sensitive material in the submission has not been published.
552If the FWC undertakes or commissions research for the purpose of the annual wage review, it must publish that research so that interested persons can make submissions on the issues covered (section 291).
553When the FWC makes one or more determinations varying modern award minimum wages or makes a determination varying a national minimum wage order to remove ambiguity or uncertainty or to correct an error, it must publish the order on its website or by any other means it considers appropriate (section 296).
554A national minimum wage order cannot be varied other than by an expert panel of the FWC and cannot be revoked (section 296(3)). Once made, a national minimum wage order remains in effect until the next such order comes into operation.
555Pursuant to section 601(1) a decision of the FWC, other than under Part 5 – 1, must be in writing. As soon as practicable after making a decision, the FWC must publish on its website or by other means it considers appropriate any decision which is required to be in writing.
556It appears from a combined reading of sections 288 and 601 of the FWA that the annual wage reviews which the FWC performs fall within the scope of written decisions which must be published.
557So, even if there is no specific evidence or proof about the matter, the Court can nonetheless inform itself about the issue in any way which the judge sees fit.
558I consider the position with this order would be the same as that with the Award. Because it arises from a Commonwealth statute and must be published, courts can probably take judicial notice of the order. One difference here was that the plaintiffs provided no information at trial about the wage and conditions which would apply under the national minimum wage order. To that extent, the plaintiffs’ position on this point is possibly weaker – although it may be the case that the plaintiffs can readily produce a copy of the applicable order

Superannuation
559In relation to superannuation, Goodman pleaded that pursuant to clause 22.2 of the Award, Ekera was required to make superannuation contributions for Goodman’s benefit so as to avoid Ekera being required to pay the superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 (Cth) (“the Superannuation Act”).
560Clause 22.2 said that an employer must make such superannuation contributions to a superannuation fund for the benefit of an employee to avoid the employer having to pay the superannuation guarantee charge in respect of that employee. The default approved superannuation funds were set out in clause 22.4 of the Award. They applied unless the employee had chosen some different fund.
561Based upon an assessment of the relationship between Ekera and Goodman, I am satisfied that Goodman is an employee. In addition, section 12(3) of the Superannuation Act can be important in this context. The provision says that if a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract. This expands the concept of an employee beyond the common law position and increases the pool of people eligible to claim superannuation.
562One case which was not the subject of substantial analysis at trial but which is relevant to the question of Goodman’s position is the case of Moffet V Dental Corporation Pty Ltd.[227] In that case, Moffet operated a dental practice in Parramatta for 20 years before selling it to Dental Corporation Pty Ltd (“Dental Corporation”) for $2.12 million in November 2007. Dental Corporation operated a business like Ekera – it aggregated dental practices. This deal, as in the present case, was also effected through an acquisition agreement and services agreement.
[227] [2019] FCA 344. The decision of the trial judge was upheld on appeal (2020) 297 IR 183.
563The services agreement included terms as follows:
·Moffet, as the practice principal, had to ensure that he performed his obligations under the agreement and used his best efforts to do all things necessary to give full effect to the agreement;
·Moffet had to refrain from doing anything that might hinder performance of the agreement;
·Moffet had to act with all due care and skill to the best of his knowledge and expertise and to the standard expected of a dentist experienced in the provision of services similar to the dentistry services (as defined);
·Moffet was obliged to undertake continuing professional education, to maintain patient records and to maintain professional indemnity insurance for himself;
·Dental Corporation was to provide administrative services, that is, the head office and all other administrative services provided by Dental Corporation including information technology services, equipment support, recruitment support, accounting and group marketing in accordance with clause 6 of the agreement;
·Dental Corporation was to provide the administrative services for the five year term to the practice principal to the extent needed for him to perform his obligations under clause 3.2 of the services agreement;
·Dental Corporation was to provide the services as reasonably required by the practice principal to enable him to operate and manage the practice in a manner consistent with the standard of administrative services and support that the practice enjoyed immediately prior to completion of the sale;
·Dental Corporation was to acquire equipment or assets reasonably required for the conduct of the practice;
·“Employee” was defined as a person employed by Dental Corporation to provide assistance to the practice principal at the practice;
·Moffet was to receive a performance bonus for any increase in the annual cash flow generated by the practice (clause 9.1);
·the parties acknowledged that the practice was expected to generate a cash flow equal to, or greater than, the minimum annual cash flow (as defined). If there were a shortfall, then Moffet as the practice principal had to reimburse Dental Corporation so that it received the minimum annual cash flow (clause 9.2); and
·the services agreement did not create a relationship of employment, trust, agency or partnership between the parties clause 14.1).

564After the expiration of the five year term, Moffet remained working at the practice. There were several other dentists, associate dentists and hygienists employed in the practice.[228] However, Moffet decided to resign from the practice and claim payments for untaken annual leave, long service leave and superannuation. The first two claims depended upon Moffet being an employee of the business. The major focus of the trial was whether Moffet was an employee or an independent contractor.
[228] (2020) 297 IR 183, at [14]
565The trial judge examined this issue in some detail by reference to the legal principles[229] which have now become obsolete where the parties’ relationship has been reduced to writing and their agreement is not a sham and has not been varied.[230]
[229]Moffet v Dental Corporation Pty Ltd [2019] FCA 344, [10 – 20]
[230]See CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and Jamsek v ZG Operations Australia Pty Ltd [2022] HCA 2
566There were no terms in the services agreement directed to the hours of work to be performed by Moffet, which days or the number of days he was required to work, or the holidays which he could take. Nor were there any terms about the nature of the work to be undertaken by Moffet other than the general requirement that he provide dentistry services. Moffet decided for himself when he worked and for how long. He did not need the consent or authority from Dental Corporation about when he took leave or how much. Dental Corporation gave Moffet no directions about whom he should treat, the nature of the services to be provided or the amounts which he should charge patients for his services. Moffet alone decided these things.
567Moffet:
·retained the Australian Business Number which he had used prior to the sale of his practice;
·filed tax returns which gave his main business or professional activity as “dental surgeon”; and
·claimed as deductions expenses for which Dental Corporation did not reimburse him.

568Dental Corporation employed the staff at the practice, usually on the recommendation of Moffet. Moffet retained no right to unilaterally hire or dismiss employees.
569Having examined the agreements and the evidence as to the totality of the relationship, the trial judge concluded[231] that the reality of the situation was that Dental Corporation acquired the dental practice from Moffet in 2007, and thereafter let Moffet continue to conduct his own business much the same as he did before the sale. Moffet received the capital sum on the sale of the practice and, after the sale, Dental Corporation received part of the monies he thereafter generated as a contractor. His Honour found that Moffet was not an employee but a contractor.
[231]Moffet v Dental Corporation Pty Ltd [2019] FCA 344, [74] – [75]
570Although Moffet’s case is of some assistance, it is distinguishable from the present case in several ways. First, when he sold his practice, Moffet immediately received the full purchase price for the sale.
571Secondly, apart from the different legal principles which applied, a major difference between the cases is Moffet’s continuing to work as a dental surgeon generating substantial fees. Indeed, in a publication in 2017, Moffet said that in his last year of full-time work in 2011, he billed his clients more than $1.8 million working four days per week for about 38 weeks per year. Moffet said that he had been “hitting numbers like that since 1996” and most days brought in more than $10,000. During the initial term of the services agreement with Dental Corporation, Moffet worked as a dentist four days per week averaging billings of $8,000 - $10,000 per day.[232] Then again, between the expiry of the initial agreement in November 2012 and his resignation in November 2014 Moffet worked three days per week as a dentist. Moffet was very much a “hands on” dentist, unlike Goodman.
[232]Ibid, see [54], [56], [69] and [38]
572Thirdly, although there was no issue that Moffet managed the practice and was required to attend meetings with a senior representative of Dental Corporation every four to six weeks to discuss the performance of the practice, his management role did not seem to be as significant a focus as it was with Goodman.
573On the superannuation aspect of the case, the trial judge found that Moffet fell within the extended definition of employee in section 12(3) of the Superannuation Act.[233] The Full Court agreed. It said that section 12(3) required that:
(a)there should be a contract;
(b)which was wholly or principally for the labor of a person; and
(c)that the person must work under that contract.[234]
[233]See paragraph 561 above
[234](2020) 297 IR 183, [82]

574The court said that, in relation to criterion (b), Parliament required that the purpose of the contract be examined from the perspective of the quasi – employer, the person receiving the benefit of the labour.[235] This answer was to be determined by reference to the terms of the services agreement. The Full Court examined the services agreement and concluded that
[235]Ibid, [84]
[236]Ibid, [90]
Dental Corporation derived two primary benefits. First, it required Moffet to provide dentistry services, practice management and, when asked, to guide Dental Corporation on how it should provide administrative services under the agreement.[236] Moffet was also to maintain medical records. Secondly, Moffet committed to effectively guarantee that Dental Corporation would obtain a minimum cashflow from the business. If there were a shortfall, Dental Corporation could reduce Moffet’s monthly drawings for work done until Dental Corporation achieved the cashflow threshold. The Full Court concluded that, based on these facts, the services agreement was substantially for Moffet’s labour.
575In this case, Goodman was obliged to manage the practice to the best of his ability, being at the practice for at least eight hours per week, either performing dental work or managing the practice, and spending at least another 12 hours attending to the business of the practice. Goodman was, for the duration of the agreement, to maintain his professional education requirements (clause 4.6(a)). He had to assist Ekera to create and maintain the dental records of patients attending the practice (clause 4.7). As practice principal, Goodman from time to time was to determine and give Ekera written notice of the fees to be charged by the dentists contracted to the practice (Clause 5.1(a)). Goodman had to complete and process all forms required by private health insurers or other bodies providing benefits for treatment rendered by the practice and assist (when necessary) to obtain benefits (Clause 5.3). Goodman was obliged to maintain his professional indemnity insurance at a value of $10 million (Clause 6.2). Goodman also agreed to do everything reasonably required by Ekera to assist it in obtaining a keyman life insurance policy on his life. This policy was to protect the goodwill of the Armadale practice.
576As noted earlier, there was a mechanism in the agreement between Creative Smiles as vendor and Ekera as purchaser whereby the earn-out payments to Creative Smiles were reduced to the extent that the EBITDA did not reach $926,000 in the 2017 and 2018 financial years. This was similar in effect to the minimum cashflow arrangement in Moffet’s case. While cashflow and EBITDA are different concepts, in each case the vendor was obliged to give a particular financial commitment to the buyer and to pay money to the buyer when necessary in order to honor that commitment.
577In my opinion, it is appropriate to find that here, the Services Agreement provided for Goodman to work for Ekera and that agreement was wholly or principally for Goodman’s labour in accordance with section 12(3) of the Superannuation Act. Accordingly, I find that Goodman was entitled to superannuation payments.

Summary
578I find that Goodman was an employee of Ekera and entitled to payment under the Award. Also, under the provisions of the FWA, he was entitled to public holidays in Melbourne (section 114 and 115), the untaken annual leave (section 87 and 90(2)) and the leave loading under the Award. Because the Award applies, there is no need to have recourse to the national minimum wage order. If the Award were inapplicable, that national minimum wage order would apply to Goodman. Goodman is also entitled to payments in relation to superannuation. To the extent that Ekera did not make all the payments to which Goodman was entitled under the FWA, Ekera contravened the FWA including civil penalty provisions

Issue 13: If Goodman was an employee:
(b) what penalties should be paid by Ekera and/or Coulepis, and to whom should they be paid?
579For the reasons set out, I accept that Ekera contravened sections of the FWA. The plaintiffs argued that Coulepis was liable as an accessory for the contraventions by Ekera of the relevant provisions of the FWA. Section 550 of the FWA provides as follows:
“ (1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person :
(a)has aided, abetted, counselled or procure the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.”

580Ekera did not make detailed submissions on this aspect of the case. As I understood Ekera, it sought to examine the reasons for decision on the question of contraventions of the FWA before dealing with the issue of any applicable penalties in a subsequent hearing. I agree that this approach is appropriate.
581For the reasons which follow I do not consider that Coulepis has accessorial liability for any contravention of the FWA by Ekera.

Legal principles
582The case law is clear that a party pursuing an accessory must plead that the accessory had actual knowledge of each element of the principal’s contravening conduct and elected to engage in that conduct. The pleading must also assert as material facts that the accessory was sufficiently aware of all the relevant facts going to the contravention.[237] The plea is akin to one of dishonesty. To be involved in the contravention, a defendant must associate himself or herself with the offending conduct and be linked in purpose with the principal wrongdoer.
[237]M Byrnes, J Catanzariti, B Dudley, I Latham and E Young, Annotated Fair Work Act & Related Legislation 2021 (2021 Lexis Nexis), 932
583The situation under section 550 (2)(a) is that the plaintiffs must prove intent. A person like Coulepis can aid and abet, counsel or procure a contravention only if he intentionally participates in the contravention. This means showing that Coulepis intended to participate in the contravention in the sense that he knew the essential matters going to the offence, whether or not he knew that it amounted to a contravention of the FWA. In one case where there was underpayment of money contrary to an award, the court said that an applicant must establish the alleged accessory had actual knowledge that:
(a)the applicant performed work or services for them;
(b)the applicant did so as an employee;
(c)the work was governed by an industrial award, whether or not the accessory knew the exact name of the award;
(d)the award stipulated minimum rates of pay; and
(e)the amounts paid by Ekera were less than the minimum stipulated in the award.[238]
[238]Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365, [191]

584Here, there was no evidence that Coulepis knew the matters referred to in subparagraphs (b) – (e) . These matters were not raised when Coulepis gave evidence. Of these matters, the most important is possibly (c). Unless Coulepis knew that the work which Goodman performed for Ekera under the Services Agreement was subject to an award, he could not be an accessory.[239]
[239]See Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365, [187]; Potter v Fair Work Ombudsman [2014] FCA 187, [81]; Fair Work Ombudsman v Nobrace Centre Pty Ltd [2018] FCCA 378, [341]
585To be knowingly concerned in, or party to a contravention, a person must have engaged in some conduct which implicates or involves him or her in the contravention so that there is a practical connection between the person and the contravention. It seems to me that, in the present context, this requires Coulepis to know at least that the work which Goodman performed for Ekera between July 2016 and February 2018 was governed by an industrial award. There was no evidence to this effect. Goodman did not raise the matter with Coulepis when he gave evidence. A couple of cases suggest that in the context of underpayment of wages, it is enough for the alleged accessory to know the rate of pay being paid without knowing that this rate is below what is required in the award.[240]

[240]See Fair Work Ombudsman v Grouped Property Venues Pty Ltd [2016] FCA 1034 and Fair Work Ombudsman v A to Z Catering Solution Pty Ltd & Anor (No 2) [2018] FCCA 2299

Issue 14: If yes to issue 12, does the amount payable to Goodman or any penalty affect the EBITDA calculation and/or the award of damages pursuant to contract or the ACL?
586The plaintiffs argued that this issue will be determined by the interpretation of clause 4.5(b) of the Acquisition Agreement and by factual findings as to whether Goodman performed administrative services as the practice principal and practice manager. The plaintiff accepted that, if the Court ruled that any wages payable to Goodman did not fall within the capped amount of administrative costs referred to in clause 4.5(b) of the Acquisition Agreement, the amounts Ekera paid as wages would fall within the EBITDA and hence, be taken into account when calculating the 2018 earn-out instalment.
587The plaintiffs argued that the Acquisition Agreement defined “Administrative Charges” by reference to what Creative Smiles “previously charged as expenses to the Practice charges for providing administrative services to the Practice (including but not limited to accounting, bookkeeping, management, insurance and services)”. The clause stipulated that the amount of Administrative Charges to be included in the calculation of EBITDA is to be capped at the level of Administrative Charges which Creative Smiles invoiced the practice in the financial year 30 June 2015. The parties agreed that this capped figure was $6,000. So, to the extent that Administrative Charges exceeded that amount, the excess was not taken into account when calculating the EBITDA.
588The plaintiffs contended that when not acting as a dentist in his own right performing work with wisdom teeth, the work performed by Goodman at Creative Smiles was all administrative in nature. The work included bookkeeping, management, and other services such as organising staff, ordering dental supplies, checking invoices and arranging payments.
589Ekera relied upon Ferrier’s opinion at paragraph 7.7 of his report where he said that there would be an adjustment to the assessment of EBITDA for the calculation of the earn-out payments in 2017 and 2018 because of the wages and on-costs paid to or on behalf of Goodman. Ekera argued that the FWA amount was not an administrative charge within clause 4.5(b) of the Acquisition Agreement. It said that the definition of Administrative Charges in that clause were for amounts which the vendor had previously charged as expenses to the practice or provided administrative services to the practice, including but not limited to management. They submitted that:
·the plain meaning of those words meant that for charges in respect of management to be included in the definition of Administrative Charges they had to comprise amounts Creative smiles had previously charged as expenses to the practice for management;
·there was no evidence that Creative Smiles before executing the Acquisition Agreement charged amounts to the practice for management. The due diligence report prepared by Grant Thornton showed various overheads and expenses charged to the practice including bookkeeping fees, computer expenses, insurance, postage and stationary and telephone. However, there was no category called “management expenses”. Hence, Creative Smiles did not charge the practice for management in the 2013 – 2015 financial years; and
·because there was no charge in 2015 before the acquisition of the practice, any management charges in the form of wages and entitlements to Goodman should be excluded from the EBITDA calculation.

590Assuming the Court adopted that view, Ekera relied upon paragraphs 7.11 – 7.16 of Ferrier’s report to contend that:
·any such payments to Goodman would be included in the EBITDA calculation;
·the letter of instruction to Ferrier said the defendants claimed the wages and on-costs would reduce the EBITDA by $105,801 for the 2017 and 2018 financial years; and
·Ferrier assessed the reduction in earn-out payments payable to Creative Smiles for the 2017 financial year as $64,539 and the reduction for the 2018 financial year as $41,262.

Analysis
591In my opinion, the services which Goodman provided in his capacity as practice manager managing the practice were primarily, if not wholly, administrative in nature. It was a managerial role. To that extent, payments to him in that capacity can fairly be regarded as Administrative Charges.
592It seems that in an exchange of emails in July 2017, Ekera and Creative Smiles agreed that accounting and bookkeeping constituted a minimum charge of $6,000.[241]
[241]Court book, 3287
593Ekera’s contention appears to be that, because there was no specific item in the due diligence report “management expenses”, all amounts associated with the wages and on-costs of Goodman must be taken into account in assessing the EBITDA. While factually, the proposition about headings is correct, I consider that the point is not directly relevant. Rather, the Court needs to consider whether the costs associated with Goodman’s work in his capacity as practice manager can be fairly categorised as “Administrative Charges”. If so, then only $6,000 is to be included in the EBITDA calculation and the balance ignored.
594In my view, when not acting as a dentist, Goodman was effectively a manger performing administrative tasks and so the costs associated with that work can be categorised as Administrative Charges. In the circumstances, if the Court ordered Ekera to pay wages and related costs to Goodman, they could be taken into account when assessing EBITDA, but only to the extent of $6,000.

Conclusion
595I direct that the parties confer and try to frame orders giving effect to these reasons for judgment. If they cannot agree, then by 12:00pm on 16 January 2023, each party is to file with my chambers and serve a written submission setting out the orders sought and the reasons therefor. The submissions are not to exceed eight A4 pages, a minimum 12 point typeface, and 40mm margins on either side of the page. By 12:00pm on 19 January 2023, each party may file a reply submission limited to no more than three A4 pages. If, in addition to the filing of written submissions, the parties wish to be heard on the matter, they must notify the Court by 12:00pm on 19 January 2023, setting out why an oral hearing is required. In this event, the judge will determine whether or not a hearing takes place.

[2022] VCC 2281

16 December 2022