Grant Small v Kymira Pty Ltd

[2020] FWC 2738

[2020] FWC 2738

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Grant Small
v
Kymira Pty Ltd
(U2020/3014)

COMMISSIONER SIMPSON BRISBANE, 27 MAY 2020

Application for unfair dismissal – whether applicant met minimum employment period

[1] Mr Grant Small has made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy against Kymira Pty Ltd (Kymira).

[2] In the Form F3 – Employer Response to unfair dismissal application, Kymira objected to the application on the basis Mr Small did not meet the minimum employment period under the Act.

[3] The matter did not settle at conciliation and was allocated to me. I issued directions for the filing of material, and the matter was listed for hearing by telephone on 25 May 2020 to determine whether Mr Small met the minimum employment period.

[4] Permission was granted for Mr Small to be represented by Ms Amanda Millar of Australian Dismissal Services, and Kymira was represented by Ms Emma Kirkby of the Queensland Master Builders Association.

Minimum Employment Period

[5] The Fair Work Act 2009 provides the following:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

383 Meaning of minimum employment period

The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year ending at that time.”

[6] Mr Small provided two witness statements, an initial statement 1 and a supplementary statement.2 Mr Small submitted he commenced working for Kymira on 17th May 2019 and his employment came to an end on 26 February 2020. Ms Small submitted he had 9 months, one week and two days of continuous service. Kymira submitted Mr Small commenced on 1 July 2019 until 26 February 2020. Either way Mr Small meets the six-month minimum employment period if Kymira is not a small business. The question of whether Kymira was a small business therefore needs to be settled.

[7] Kymira submitted it is a small business employing eight employees at the time Mr Small’s employment came to an end.

[8] In its outline of argument, Kymira submitted that at the time that Mr Small’s employment was terminated, it had eight employees. In its submissions, Kymira provided that the following people were employees:

1. Ben Macklin

2. Cindy Callier

3. Grant Small

4. Jason Jeans

5. Kieran Gleeson

6. Stacey Smith

7. Toby King

8. Tommy Budge-Bland

[9] Mr Small submitted that Kymira was not a “small business” as defined by section 23 of the Act as it did not disclose a number of its own employees at the time of the termination of employment, nor did it disclose all of the employees of an associated entity, ICM Construction (Qld) Pty Ltd (ABN 73 162 567 973) (ICM).

[10] Section 50AAA(1) of the Corporations Act 2001 (Cth) provides that one entity (the associate) is an associated entity of another entity (the principal ) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

[11] Mr Small submitted that the two related entities, Kymira and ICM were controlled by the same persons (Michael Caughley, Keith Wood and Gene Stewart), and regularly exchanged employees.

[12] Mr Small submitted Kymira and ICM had a number of employees who were engaged in both entities – including Michael Callanan as the financial controller of both entities; Deb Caughley (Mother of Michael Caughley) who performed office administration for both entities, and Janitta Weis who in her role of doing contract administration for ICM was also involved in allocating staff within Kymira.

[13] Mr Small submitted that he and other Kymira employees were instructed to perform work on a number of jobs under the name of ICM including but not limited to:

a. Adelaide Street job around the 05/02/20-12/02/20;

b. Sandgate Hawkers AFL Club - 23/01/20-06/01/20

c. Rugstore Salisbury 20/06/20-05/07/20

d. Cashmere Childcare Centre - 01/11/20-05/12/20

[14] Mr Small gave evidence that at the point his employment came to an end, there were at least 16 employees (not eight as claimed by Kymira) though a number of these additional employees also do some work for the associated entity, ICM.

[15] Mr Ben Macklin, former Project Manager of Kymira provided a statement 3 and gave evidence that in his capacity as project manager, he attended multiple meetings regarding the set-up, direction, structure and running of Kymira. He said he worked from 9 February 2019 to 16 March 2020. He said all of these meetings were attended by Keith Wood, Gene Stewart and Michael Caughley.

[16] Mr Macklin accepted that he had also brought an unfair dismissal application against Kymira himself, however said he decided not to pursue it at the time for financial reasons and he didn’t respond to the jurisdictional objection at the time.

[17] Mr Macklin said it was evident from the meetings he attended that all three directors of ICM had equal weight in the day to day running of Kymira. Mr Macklin said he was also present at the meeting in regard to setting up Kymira as a Pty Ltd entity and was a witness to the discussion surrounding protecting the directors and ICM as a separate entity, hence, the decision was made to appoint Michael Caughley as sole director.

[18] Mr Small also said there were a total of eight additional employees who work for Kymira but get paid on a “cash in hand” basis. Mr Small submitted that these employees included:

1. Nigel Evans, Michael Caughley’s cousin. Mr Caughley said Mr Evans has his own business and he invoices Kymira for his work. Mr Macklin said Mr Evans worked on the Kymira sites at full time hours on and off and was paid cash. Mr Small said he worked with Mr Evans for many weeks at Mr Caughley’s house and he worked every day.

2. Steven Caughley, Michael Caughley’s father. Mr Caughley said his father provides invoices and has done some work for ICM but is not paid by Kymira. Mr Small said Mr Steven Caughley worked some days and not others.

3. Janet Ward, who Mr Small said also works through ICM. Mr Caughley said Ms Ward is a financial officer for Kymira and has her own company and works for Howard Stewart and Associates. Mr Caughley said she is a sub-contractor. Mr Macklin said that Ms Ward helped with invoices for Kymira. Mr Macklin accepted Ms Ward did the finances for Kymira. Mr Small said he had minimal involvement with Ms Ward.

4. Deb Caughley, Michael Caughley’s mother who Mr Small said works through ICM. Mr Caughley said his mother is a full-time employee of ICM and that he would have asked her to perform some administrative services for him. Mr Macklin said Deb Caughley looked after invoices for Kymira.

5. Samuel McNeil. Mr Caughley accepted that Mr McNeil is an employee of Kymira. Mr Caughley said Mr McNeil was employed after Mr Macklin so it would not increase the number. Mr Small said Mr McNeil was working on the day Mr Small was terminated.

6. Kelly Brady. Mr Caughley said Ms Brady has come in to help finalise development sites and other roles at Kymira with the idea that if Kymira did pick up multiple projects she would run Kymira however she is a volunteer and does not get paid. Mr Macklin said he worked side by side with Ms Brady in a project management role even though her title was not project manager. He said he was unaware if Ms Brady was unpaid but given the hours she performed he thought she would have been.

7. Janitta Weis, who Mr Small said was employed by ICM but allocates work to Kymira. Mr Caughley said Ms Weis was a contract administrator for ICM and he doubted Ms Weis did anything with Kymira. Mr Macklin said Ms Weis would help him with software questions and locating documents when he worked for Kymira. Mr Macklin said Ms Weis would help allocate Kymira employees to work on ICM sites. Mr Small said he did not have dealings with Ms Weis.

[19] Michael Callanan, who Mr Small said was a financial controller for both ICM and Kymira. Mr Caughley said Mr Callanan had no involvement with Kymira. Mr Macklin said Mr Callanan looked after the finances of Kymira including payroll. Mr Small said when he put his payslips in he would put Mr Callanan’s name as the supervisor.

[20] Mr Macklin said that during his employment, he was told Mr Wood was providing the investment capital to establish Kymira. Mr Macklin said Mr Wood would quite frequently drop into the work sites and Mr Macklin treated him as he would any boss and provided the full information Mr Wood asked for. Mr Macklin claimed he reported to all three of Mr Wood, Mr Stewart and Mr Caughley.

[21] Mr Macklin claimed his position became untenable as project manager because he butted heads with Mr Stewart and that he spent 40% of his time in the office, initially at the Salisbury office of ICM, and then the Petrie Terrace office of ICM. Mr Macklin said he was the only office based Kymira staff member however ICM staff were integral to the running of Kymira.

[22] Kymira provided a brief report in the form of a letter prepared by Mr Steven Carlos, external financial advisor to Kymira Pty Ltd, that provided his professional opinion that the companies are not associated entities as defined by s50AAA (the Report). Mr Carlos gave oral evidence and adopted his report as his evidence. 4

[23] The Report provided that in this case, by reference to subsection (1) of s50AAA of the Corporations Act 2001 (Cth), none of the subsections (2) to (7) are satisfied in describing the relationship between Kymira and ICM. It provided that the companies are not related bodies corporate as defined in Section 50 of the Corporations Act 2001 (Cth) and that they do not form part of a wholly owned group. A review of the shareholdings of each company reveals that the members are not the same. It provided one company cannot exercise control over the other as the affairs are conducted distinctly and separately, and there is no qualifying investment or asset in one or the other.

[24] With regard to control, the Report provided that each company conducts its own affairs and decision making independently of the other. The control of each is governed by different mechanisms. ICM by the Shareholders Agreement at member level.

[25] Mr Carlos provided that Kymira is a sole director company for which Michael Caughley is the single controller of financial and operational policy. He said the Board of ICM is comprised of three independent directors with corporate governance documented in a Shareholders Agreement. Operating policy is determined at members level. There is no Shareholder Agreement for the members of Kymira and as stated above, decision making and strategic direction rests solely with Michael Caughley.

[26] The Report said there have been no instances or practices which have influenced the decision making or operating policies of Kymira, exerted by ICM.

[27] Mr Carlos said in his oral evidence he is the accountant for Kymira. Mr Carlos said any decisions about Kymira are made by Mr Caughley and not the shareholders. He repeated that with ICM the Shareholders Agreement for ICM provided a mechanism for decisions at the member level.

Administrative labour and Payroll

[28] Mr Carlos gave evidence to the effect that ICM provided some minor level of labour to Kymira, but this was not an asset, and Kymira did not acquire significant amounts of labour from ICM. He said Kymira had its own book keeping services independent of ICM. Mr Carlos said he also provided accounting services to ICM.

[29] Mr Carlos was asked if Kymira paid ICM for administrative labour and he said he did not know however he did not see it as a significant arrangement.

[30] Mr Small was asked during his oral evidence if ICM and Kymira were using the same administrative forms for employees as Kymira employees and he said yes, and it was an “App” that was used to enter hours of work into. It seemed this was where Mr Small identified Mr Callinan (who Mr Caughley identified as having no involvement with Kymira) as his supervisor.

Office Space, Warehouse, Construction Equipment, Laptops and Software

[31] Mr Carlos was asked whether ICM provided office space to Kymira or if any money changed hands for that and he said he was not aware. He was also asked if ICM provided a warehouse and construction equipment to Kymira and he said he was unaware.

[32] Mr Carlos was asked if laptops and software were provided by ICM to Kymira and he said he did not know, however Kymira has spent approximately $20,000 on a website of its own from its own working capital.

[33] Mr Macklin said that in his time as project manager for Kymira, he was equally answerable to all directors of ICM, in one instance being reprimanded by Mr Stewart over a difference of opinion whilst on leave over the death of a close friend. Mr Macklin said in this instance Mr Stewart made it clear he was one of those in charge of Kymira and that effectively he could fire Mr Macklin at any time at his own discretion. Mr Macklin claimed the laptop he was given to perform his work for Kymira was an ICM laptop already owned by ICM as the sticker on the back of the laptop was an ICM sticker. Mr Macklin said he used software licensed to ICM, and ICM petrol cards.

[34] Mr Caughley said ICM does not own any construction equipment used by Kymira. Mr Caughley said the two companies shared an office but had separate accounting processes. Mr Caughley said he sat in the office and operated two roles in two businesses, being Kymira and ICM. He said he is the only person paid by both businesses.

[35] Mr Caughley said Mr Macklin was located in the shared office, but only intermittently. He said his role was not to sit in the office. Mr Caughley confirmed that Kymira does not have a separate office from the office of ICM and also confirmed that Kymira did not pay rent to ICM for the use of the office space however this was because Kymira hadn’t made any money yet. He said there was an agreement that if Kymira did make money it would contribute towards office costs.

[36] Mr Caughley said Kymira purchased its own software and office equipment. Mr Caughley said there has never been a warehouse, and there was a shed owned by a super fund. Mr Caughley said equipment owned by ICM is stored there, however the scaffold stored there and used by Kymira is owned by him.

[37] Mr Macklin said all ICM plant was stored at the warehouse and he was using plant owned by ICM while working for Kymira. He accepted he did not know who owned this property. He said he used scaffold, presses, jackhammers owned by ICM. He said as a subcontractor he was paid by ICM to set up Kymira.

[38] Mr Small said two or three times he had to go to the ICM sheds to pick up mobile scaffoldings and he was not aware of other tools. He said he was not aware whether this scaffolding was owned by Mr Caughley.

Property at Fork Street Coorparoo

[39] Mr Macklin said it was his understanding that Mr Wood purchased the house at Fork Street Coorparoo in his wife’s name as a vehicle for Kymira to establish itself as a residential development company, with the dividends to be dispersed between Mr Caughley, Mr Wood and Mr Stewart. Mr Macklin said he believed all three directors of ICM had an interest in the Fork Street property.

[40] Mr Macklin said Mr Caughley, Mr Wood and himself attended meetings during construction and the original contract for the construction was with Ms Wood however the client became the purchaser of the property and the sale was facilitated by Kymira.

[41] Mr Carlos was asked about this property and Mr Carlos said the property was the principle place of residence of Simona Wood, the wife of Mr Wood. Mr Carlos said it was an arm’s length transaction and if Kymira performed work at the property of Ms Wood, any profit from it would go to Kymira. Mr Carlos there was a contract in place and Kymira was paid for the work. Mr Carlos said he understood Ms Simona Wood lived at the property.

[42] Mr Caughley said Mr Wood would have been at the site of this property because it was his wife’s residence and not because of Kymira. He said Ms Wood sold the property to a Mr and Mrs Coombs and it was Mr and Mrs Coombs who contracted Kymira and paid Kymira to perform work at the property, and ICM had nothing to do with it.

[43] Mr Small said the property that he worked on at Fork Street he understood was purchased through the directors of Kymira and ICM with a view to develop through Kymira and sell it. Mr Small said Mr Wood would turn up on Kymira work sites once a week and not just at the Fork Street property.

Verry Street Coorparoo

[44] Mr Macklin said that the plan for a property at Verry Street Coorparoo was the same as for Fork Street, and plans and approvals were drafted for this development with Kymira being the principal contractor for construction.

[45] Mr Carlos said the property is being rented out and Mr Stewart and Mr Wood did not have an interest in the property.

ICM Adelaide Street Job

[46] Mr Caughley accepted that Kymira employees worked on a shop fit out for two days on an ICM job to move a hoarding and the labour was charged to ICM and paid by ICM to Kymira. Mr Caughley said he provided the directions to work on that job.

Structure of Kymira and ICM from ASIC Extracts

[47] Mr Carlos was asked if there were any profits split from Kymira or any of its developments that went to Mr Keith Wood or Mr Gene Stewart. He said Mr Wood and Mr Stewart were not shareholders in Kymira and no profits went from Kymira to Mr Wood or Mr Stewart.

[48] Mr Carlos said in his oral evidence Mr Caughley controlled Kymira. I asked Mr Carlos about the shareholder companies in Kymira and he said Mr Caughley controlled one of those companies, but he was not sure which one.

[49] Mr Carlos confirmed Mr Caughley was a shareholder in Caughley & Co Pty Ltd, one of the shareholding companies in ICM and he is either a director or his wife is a director of Caughley & Co Pty Ltd.

[50] Mr Caughley said in his statement 5 that as the sole director of Kymira, he is solely responsible for the strategic and policy directions of that Company. He said he has sole legal and actual control over the day to day operations of Kymira.

[51] Mr Caughley said one of the member shareholding companies in Kymira was DJM & JMP Pty Ltd and that is his company. Of the other two member shareholding companies in Kymira he said he believed SR&LG Pty Ltd is Mr Wood’s company however it could be a trust and he was not sure, and while he did not know what entity controlled the shares, the third shareholding company in Kymira being Merewether (Qld) Pty Ltd is related to Mr Stewart. He accepted the shareholdings were equally held between the three entities. Mr Caughley said Mr Wood and Mr Stewart had no involvement in the day to day running of Kymira.

[52] Mr Carlos evidence that no profits from Kymira went to Mr Wood and Mr Stewart appears to conflict with the evidence of Mr Caughley that Mr Wood and Mr Stewart controlled companies that have each have a one third share in Kymira.

[53] Mr Caughley said Mr Wood and Mr Stewart were not involved in the establishment of Kymira other than as a branding exercise and the establishment of Kymira was largely his idea. He said it was set up through ‘Clip’ a media and marketing company. Mr Caughley was asked if capital was invested by Mr Wood and Mr Stewart in the establishment of Kymira. His answer was somewhat vague in that he said there was capital invested but that was largely through a dividend payment from himself, and nothing directly from Mr Wood or Mr Stewart.

[54] Mr Caughley was asked why Mr Macklin would claim he was directed by Mr Wood or Mr Stewart in regard to his work at Kymira and the effect of his evidence was that he didn’t know.

[55] Mr Caughley said as one of three directors of ICM he had equal input into the policy and operational control of ICM. Mr Caughley said there are no financial links between Kymira and ICM that differ from commercial arrangements that either company may have with any other organisation.

[56] Of the three equal company shareholders in ICM, Mr Caughley confirmed that he is the sole director and owner of one of those, Caughley & Co Pty Ltd. Mr Caughley said Finnz Holdings Pty Ltd was Mr Wood’s company and Toby Corp Pty Ltd was Mr Stewart’s company.

[57] Mr Caughley said in relation to Mr Small’s submission that Mr Small, along with other employees, was instructed to work under the name of ICM, that Mr Small is “incorrect in his understanding of the works.” Mr Caughley said in two of these instances, ICM was the principal contractor to whom Kymira was contracted, however in two other examples Kymira was directly contracted by the ultimate client. He said on all occasions normal commercial rates were charged and the employees were employed and paid by Kymira.

[58] Kymira submitted that the Corporations Act 2001 (Cth) clearly requires more than a general feeling of connectedness between two entities for relatedness to be found. It submitted one of the specific elements of the Corporations Act 2001 (Cth) must be demonstrated by Mr Small to satisfy the Commission that the requisite relationship exists.

[59] Kymira agreed that Deb Caughley, Janitta Weis and Michael Callanan are employees of ICM who provide some support to Kymira. It submitted Ms Kelly Brady has never been an employee of Kymira or ICM, nor has Ms Kelly ever been remunerated in any way for activities she has undertaken within either business.

[60] In his supplementary submissions, Mr Small argued that in this instance, the principal (I understood to refer to ICM) has a qualifying investment in the associate (Kymira) – through providing significant amounts of labour of the various ICM employees who were engaged in the operations of Kymira Pty Ltd. Mr Small submitted that ICM also has a qualifying interest in Kymira by providing both labour in the form of Ms Caughley, Ms Weis and Mr Callinan and offices and office equipment and facilities within ICM offices at Petrie Terrace, Qld.

[61] Mr Small submitted that given the provision of both the labour of ICM employees and the provision of offices, it is clear that this is not an arm’s length relationship and that, in fact, “…the principal has significant influence over the associate” (s.50AAA). Mr Small submitted it must also be acknowledged that “…the interest is material to the principal” (s.50AAA) for such significant resources to be invested by ICM into Kymira.

[62] Mr Small further submitted that Kymira employees also had access to and utilised the plant and equipment owned by ICM for the use on Kymira sites.

[63] Mr Small submitted that while Michael Caughley was the sole director of Kymira, it was understood that Keith Wood contributed the capital investment to establish Kymira – either in his own capacity or via funds from ICM. Mr Small submitted this capital investment being “…an asset that is an investment in the second entity” (See section 50AAA) – being Kymira Pty Ltd.

[64] Mr Small submitted that Keith Wood regularly visited the Kymira job sites to check on the progress of work (which is consistent with the claim that he had either personally or via ICM contributed the investment capital).

[65] Mr Small said he was also advised that any profits of Kymira were to be split between the three directors. Mr Small submitted however he was of the view that Kymira did not appear to be profitable and, at the time of his termination, the employees of Kymira were fully engaged in working on renovating a house owned by Michael Caughley – a renovation which had been continuing for some 10 months – which was unlikely to return a profit unless that house was subsequently sold.

[66] Mr Small submitted further evidence that “the principal has significant influence over the associate” includes that the two companies held a joint Christmas celebration.

[67] Mr Small submitted therefore that Kymira and ICM are associated entities as per section 50AAA of the Corporations Act2001 (Cth). He submitted therefore the combined number of employees of the two associated entities exceeds the number of employees prescribed under Section 23 of the Fair Work Act.

[68] Mr Small accepted he did not have intimate knowledge of the structure and ownership of the companies.

Conclusion

[69] I raised with Ms Kirkby the possibility that Mr Caughley may have a sufficient level of control in relation to both entities to meet the requirement that the two entities were associated. Ms Kirkby responded that if Mr Caughley was a sole director of both that may be so.

[70] In chapter 2E of the Corporations Act 2001 (Cth), a reference to an “entity” in the Corporations Act 2001 (Cth) is a reference to “a natural person, a body corporate (other than an exempt public authority), a partnership or trust. 6”.

[71] As was put to Ms Kirkby, I have given consideration to whether Kymira and ICM are associated entities for the purposes of Section 50AAA of the Corporations Act 2001 (Cth) on the basis that under subsection 50AAA(7), Mr Caughley as a third entity controls both Kymira and ICM and the operations, resources and affairs of both are material to him. It has not been put in contest that Mr Caughley controls Kymira, so the question turns to whether he controls ICM.

[72] Mr Carlos’ letter of 8 May 7 did not seek to address whether Mr Caughley was a third entity capable of meeting the test in section 50AAA(7).

[73] Key to this matter is whether there was a capacity, in accordance with the definition in section 50AA(1), for Mr Caughley to determine the outcome of decisions of ICM. The evidence establishes he was one of three directors of ICM, and also a sole director and shareholder of Caughley & Co Pty Ltd that held a qualifying investment of 33% in ICM. Mr Caughley described Caughley & Co as his company. Caughley & Co would therefore be a part of the shareholder agreement between members referred to by Mr Carlos.

[74] Section 50AA(2) provides that in determining if Mr Caughley had the capacity to determine the outcome of decisions about ICM’s financial and operating policies, it is firstly necessary to decide on the level of practical influence Mr Caughley could exert (rather than the rights he could enforce). On the evidence I am satisfied that Mr Caughley was capable of influencing ICM’s financial and operational policies given his directorship of ICM and also his control over Caughley & Co Pty Ltd that held 33% shares in ICM, and the practices and patterns of behaviour affecting ICM financial and operating policies.

[75] The evidence points to Mr Caughley’s capacity to exert influence. As one of only three directors of ICM Mr Caughley had power to exercise powers of the Company. He also demonstrated this power as on his own evidence ICM engaged both his mother and his father in different roles, his mother as a full-time employee.
[76] The evidence also indicates ICM was providing free office space to Mr Caughley’s company Kymira. Even if it was intended that Kymira would eventually financially contribute to the office costs, this is a clear benefit to Kymira. Kymira also appeared to enjoy some administrative support from ICM although there was some contest over the extent of that support. I am satisfied at least three employees/contractors engaged by ICM were providing administrative functions for Kymira. Mr Caughley was also storing his scaffolding at the same location as ICM equipment was stored and Mr Macklin was not challenged on his evidence that the laptop and petrol card he used belonged to ICM and presumably paid for by ICM.

[77] Mr Caughley said he is the only person paid by both Kymira and ICM. He also accepted that Kymira had performed work for ICM at a project on Adelaide Street although he stressed this was a commercial arm’s length arrangement.

[78] I am cognisant that section 50AA(3) states that the first entity does not control the second entity merely because they have the capacity to determine the outcome of decisions about the second entities financial and operating policies. However on the basis of the evidence I am satisfied Mr Caughley does in fact exert such control in ICM.

[79] I am also satisfied on the evidence that section 50AAA(7)(b) is met in that the operations, resources and affairs of both Kymira and ICM are also material to Mr Caughley. There is no dispute on this question as far as Kymira goes, and in regard to ICM Mr Caughley’s control over Caughley & Co Pty Ltd that held 33% shares in ICM, satisfied me he had a material interest in ICM.

[80] There is no evidence that the circumstances here fall within the exemption in section 50AA(4) such that Mr Caughley’s capacity to influence decisions in ICM is constrained by a legal obligation to exercise his influence in ICM for the benefit of Kymira. This is because his directorship and financial interest in ICM is separate from his directorship and financial interest in Kymira.

[81] On the basis of the conclusions above I am satisfied Kymira and ICM are associated entities, and therefore employees of both need to be included to determine whether Kymira has 15 employees.

[82] In the alternative if the finding above is incorrect, then it would appear from the evidence, imperfect as it is, that Mr Small’s contention that ICM and Kymira are themselves associated entities is likely to be made out. The evidence is that the three directors of ICM and apparent controllers of three equal company shareholders in ICM, are also the apparent controllers of three equal shareholding companies in Kymira. Contrary to the evidence of Mr Caughley, the evidence of Mr Macklin and Mr Small tends to indicate Mr Stewart and Mr Wood, as well as controlling the companies that own Kymira, also had a level of influence over the running of Kymira though involvement in investment decisions, visiting sites and giving direction to staff. It seems from the evidence, particularly that of Mr Macklin who gave largely unchallenged evidence that he participated in meetings involving the three directors of ICM about the establishment of Kymira, that it is likely that at the time Kymira was established it was decided that each of the directors and controllers of equal shareholding companies in ICM would through three separate companies become equal shareholders in Kymira.

[83] The decision for ICM to provide its office space and administrative support through its staff to Kymira is logical on that basis, and the overall evidence appears to satisfy the requirements of control, qualifying investment, significant influence and material interest as set out in subsections in 50AAA.

[84] I asked Mr Carlos, who said he was the accountant for both Kymira and ICM, how many employees ICM itself had, and he said he believed 10 or 12 but less than 15. I asked Mr Carlos whether Kymira and ICM had 15 or more employee taken together he said he believed so but could not be sure of the exact number.

[85] Mr Macklin gave evidence that Kymira had approximately 15 employees and ICM had many more than this, however quite a number of employees worked for both.He was not directly challenged on this evidence. Mr Macklin said in his oral evidence at a bare minimum he believed ICM had 10 employees in the office. Mr Caughley said at a guess he thought there may have been six ICM employees at the time Mr Small’s employment ended.

[86] I asked Ms Kirkby in closing whether it was conceded that if the entities were taken to be associated entities that the total number of employees was 15 or more. Ms Kirkby said it would need to be confirmed.

[87] It was submitted in closing for Mr Small that the ICM website identifies a minimum of 14 employees, and there are at least eight employees of Kymira bringing the total to 22 and the combination of the two was clearly above the threshold of 15.

[88] Kymira is directed to confirm to chambers by 5pm on Wednesday 3 June 2020 whether it accepts that the number of employees of Kymira and ICM when taken together was 15 or more at the time Mr Smalls employment ended. If Kymira concedes this was the case the matter will be listed for further directions to program the remaining jurisdictional and substantive issues.

[89] If Kymira wishes to press that the number of employees of Kymira and ICM taken together was less than 15 at the time Mr Smalls employment ended it is directed to file and serve by 5pm on Wednesday 3 June 2020 any further evidence relevant to the number of employees of ICM at the relevant time and the matter will be listed for further mention.

COMMISSIONER

Appearances:

Ms A. Millar of Australian Dismissal Services appearing for the Applicant
Ms E. Kirkby of Master Builders Queensland appearing for the Respondent

Hearing details:

2020,
Brisbane
May 25

Printed by authority of the Commonwealth Government Printer

<PR719645>

 1   Exhibit 4

 2   Exhibit 5

 3   Exhibit 3

 4   Exhibit 1

 5   Exhibit 2

 6 s.64A of the Corporations Act 2001 (Cth)

 7   Exhibit 3