JOHN Webb v Stratton Finance Pty Ltd - [2013] FCCA 2197

FEDERAL CIRCUIT COURT OF AUSTRALIA

JOHN WEBB v STRATTON FINANCE PTY LTD

[2013] FCCA 2197

Catchwords:
INDUSTRIAL LAW – Employment agreement – where applicant employed as a finance consultant for respondent, a finance broking house – where respondent’s company received commissions for completed deals – where applicant employed on commission only basis – where applicant paid a percentage of gross commission on all deals settled – where applicant paid weekly gross amount adjusted by income tax and shortfalls in next month’s commission payment – where deductions also made for introduction fees – where some agreements were subject to “clawbacks” where commission repaid if loan ended after a short period – where these clawbacks appeared on applicant’s commission sheet as deductions – where payslips did not reflect commission statements – where little evidence of applicant questioning deductions for third party commissions – whether applicant aware of third party commission deductions at time of entry into contract – whether applicant aware of clawbacks at time of entry into contract – whether ordinary use of adjective “gross” understood to be amended in contract – where applicant raised concerns about clawbacks with management when he became aware of them – whether clawbacks in accordance with contract – whether valid variation of contract to introduce clawbacks – whether applicant acquiesced or agreed to underpayment – whether applicant estopped from bringing claim – where respondent conceded unpaid sick and public holiday leave, unpaid accrued but untaken leave, unpaid annual leave, unpaid leave loading and superannuation – whether respondent breached relevant acts and Awards in regards to those underpayments.

Legislation:

Workplace Relations Act 2006, ss.247, 612, 719(7), 720

Fair Work Act 2009, ss.45, 87, 90, 99, 116

Banking and Finance and Insurance Award 2010, cl.13.1, 24.3

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2005] 219 CLR 165
Hamill & Co v Loughlin [1917] NZLR 784
Grundt v Great Boulder Pty Goldmines Ltd [1937] 59 CLR 641
Amalgamated Investment & Property Co Ltd (In Liquidation) v Texas Commerce International Bank Ltd (CA) [1982] 1QB 84
The United Grocers, Tea and Diary Produce Employees’ Union of Victoria v Linaker [1916] 22 CLR 176

Applicant:

JOHN WEBB

Respondent:

STRATTON FINANCE PTY LTD

File Number:

SYG 940 of 2013

Judgment of:

Judge Raphael

Hearing dates:

4 & 5 December 2013

Date of Last Submission:

5 December 2013

Delivered at:

Sydney

Delivered on:

20 December 2013

REPRESENTATION

Counsel for the Applicant:

Mr C Cassimatis

Solicitors for the Applicant:

Attwood Marshall Lawyers

Counsel for the Respondent:

Mr D Parish

Solicitors for the Respondent:

Yates Beaggi Lawyers

ORDERS

Parties to bring in Short Minutes of Order to give effect to these reasons by 4 February 2014.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 940 of 2013

JOHN WEBB

Applicant

And

STRATTON FINANCE PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction

From 10 May 2006 until about 12 May 2012 Mr Webb was employed by Stratton Finance Pty Ltd[1] as a finance consultant located in Brisbane. Strattons is a…

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.

Continue reading JOHN Webb v Stratton Finance Pty Ltd

Details

AGLC: JOHN Webb v Stratton Finance Pty Ltd [2013] FCCA 2197
Case: [2013] FCCA 2197
Decision Date

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, John Webb (the applicant) brought proceedings against Stratton Finance Pty Ltd (the respondent), a finance broking house. Mr Webb was employed by the respondent as a commission-only finance consultant. The dispute concerned the calculation of Mr Webb's commission, specifically whether certain deductions, including third-party introduction fees and "clawbacks" (where commissions were repaid if a loan ended prematurely), were validly made from his 40% share of gross commission. The applicant also claimed unpaid sick leave, public holiday leave, accrued but untaken annual leave, taken annual leave, leave loading, and superannuation.

The court was required to determine several legal issues. Primarily, it needed to interpret the employment agreement, particularly clause 4 concerning the calculation of "40% gross commission," to ascertain whether the deductions for third-party introduction fees and clawbacks were permissible. This involved considering whether Mr Webb was aware of and agreed to these deductions at the time of entering the contract, and whether the term "gross" in the contract was intended to be modified by these deductions. Additionally, the court had to consider whether the respondent was estopped from relying on its interpretation of the contract, and whether the respondent had breached various provisions of the *Workplace Relations Act 2006* and the *Fair Work Act 2009*, as well as the *Banking and Finance and Insurance Award 2010*, in relation to the conceded underpayments of leave and superannuation.

The court applied the principle of contractual interpretation that focuses on what a reasonable person would understand from the language used, considering the surrounding circumstances known to the parties at the time of contracting. Regarding third-party introduction fees, the court found that Mr Webb, as an experienced finance consultant, likely understood these to be deductions, particularly when he arranged them himself. However, concerning clawbacks, the court found that these were not known to Mr Webb at the time of contracting and were not reflected in his initial commission statements or spreadsheets, making it difficult to infer a mutual understanding that they would reduce his gross commission. The court noted that the respondent had not complied with its own contractual requirement for written variations to introduce clawbacks. The court rejected the respondent's argument of estoppel, finding a lack of mutuality in Mr Webb's understanding and acceptance of the clawback deductions.

Given the respondent's concessions, the court found breaches of the relevant legislation and Award in relation to unpaid sick leave, public holiday leave, annual leave, leave loading, and superannuation, ordering payment of the conceded amounts. The court also found in favour of the applicant regarding the interpretation of "gross commission" in relation to clawbacks, determining that these deductions were not validly made under the contract. The parties were to provide Short Minutes of Order to give effect to these reasons.

Orders