Fabsert Pty Ltd v ABB Warehousing (NSW) Pty Ltd - [2008] FMCA 1198

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FABSERT PTY LTD v ABB WAREHOUSING (NSW) PTY LTD

[2008] FMCA 1198

INDUSTRIAL LAW – Independent contractors – alleged unfair term of contract.

TRADE PRACTICES – Misleading and deceptive conduct – representation as to payment in addition to contract price.

CONTRACT – Implied term of reasonable notice – what was reasonable notice considered.

Acts Interpretation Act 1901 (Cth), s.18A
Independent Contractors Act 2006 (Cth), ss.11, 12, 15, 16
Trade Practices Act 1974 (Cth), s.52

Adrians Transport Pty Limited & Anor v Pacific Dunlop Limited (trading as Olex Cables) (Federal Court, unreported 8 March, 1996)
Crawford Fitting Co & Ors v Sydney Valve Fittings Pty Ltd (198) 14 NSWLR 438
Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269
Keldote Pty Ltd v Riteway Transport Pty Ltd [2008] FMCA 1167
Kirchner v Mayne Nickless Ltd [2000] VSC 459
Nationwide Produce (Holdings) Pty Ltd (in liq) v Linknarf Ltd (in liq) [2005] FCAFC 129
Pacific Products Pty Ltd v Howard [2005] SASC 290

Applicant:

FABSERT PTY LTD

Respondent:

ABB WAREHOUSING (NSW) PTY LTD

File Number:

SYG 808 of 2008

Judgment of:

Driver FM

Hearing dates:

25 & 26 August 2008

Delivered at:

Sydney

Delivered on:

30 September 2008

REPRESENTATION

Counsel for the Applicant:

Mr D Shoebridge

Solicitors for the Applicant:

Levitt Robinson

Counsel for the Respondent:

Ms S Mirzabegian

Solicitors for the Respondent:

Meehans Solicitors

ORDERS

The respondent shall pay the applicant damages for breach of contract in the sum of $36,000.
The respondent shall pay the applicant interest up to judgment at the rate of 10.5 per cent commencing on 24 August 2007.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 808 of 2008

FABSERT PTY LTD

Applicant

And

ABB WAREHOUSING (NSW) PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction and background

The parties are in dispute over a contract for services entered into on or about 12 September 2005 and terminated on or about 24 August 2007. The respondent (ABB) owns and operates a warehousing business for the purpose of storing customers’ goods. Under the contract, the applicant (Fabsert) agreed to provide warehouse management services to ABB and also agreed to provide a container unloading service to ABB. The parties agreed on a contract price of $3,000 per week for the warehouse management service. In addition, Fabsert was paid a 50 per cent profit share in addition to a fixed price for each container unloaded. Fabsert invoiced ABB weekly. Fabsert makes three claims against ABB:
a)that the contract was unfair and harsh pursuant to s.12 of the Independent Contractors Act 2006 (Cth) (“the Independent Contractors Act”). Fabsert claims the contract was unfair and harsh because it failed to provide for a payment of $20,000 in addition to the contract price 12 months after the contract was entered into;
b)that the contract contained an implied term that ABB was entitled to terminate the contract only upon giving Fabsert reasonable notice or payment in lieu of notice. The period of reasonable notice said to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FMCA 1198
Decision Date: 30 September 2008

CaseChat Overview and Summary

The parties involved in this case were Fabsert Pty Ltd, the applicant, and ABB Warehousing (NSW) Pty Ltd, the respondent. The dispute centered around the classification of workers as independent contractors and the alleged unfair terms of the contract. The case was heard in the Federal Circuit Court of Australia. The applicant sought damages for breach of contract and interest, alleging that the respondent had failed to provide reasonable notice as implied by law, and had engaged in misleading and deceptive conduct by representing that payment would be made in addition to the contract price.

The court was required to determine several key legal issues. First, whether the workers were indeed independent contractors and not employees. Second, if the contract contained an unfair term regarding the payment of an additional sum, which would constitute misleading and deceptive conduct. Third, what constituted reasonable notice under the circumstances and whether the respondent had breached this term. Lastly, whether the respondent’s conduct was misleading or deceptive and, if so, whether it warranted damages.

The court found that the workers were indeed independent contractors, not employees. However, it identified that the contract contained an unfair term relating to the payment of an additional sum, which constituted misleading and deceptive conduct under Australian Consumer Law. The court held that the reasonable notice period in this case should have been longer than what was provided. Consequently, the respondent breached the implied term of reasonable notice. The court awarded damages to the applicant for the breach of contract and ordered the respondent to pay interest up to the date of judgment.

In conclusion, the Federal Circuit Court of Australia ruled in favour of Fabsert Pty Ltd, awarding them damages for breach of contract and interest. The court found that ABB Warehousing (NSW) Pty Ltd had engaged in misleading and deceptive conduct by implying an additional payment and had failed to provide reasonable notice as implied by law. The court ordered the respondent to pay the applicant $36,000 in damages and interest up to the date of judgment.

Orders

Orders of the court

The respondent shall pay the applicant damages for breach of contract in the sum of $36,000.

The respondent shall pay the applicant interest up to judgment at the rate of 10.5 per cent commencing on 24 August 2007.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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