Mathieson v South End Mixed Business

[2013] FCCA 1749

FEDERAL CIRCUIT COURT OF AUSTRALIA

MATHIESON v SOUTH END MIXED BUSINESS [2013] FCCA 1749

Catchwords:
INDUSTRIAL LAW – Applicant performing work for respondents for many years without pay – whether employment relationship existed – applicant provided with free board and lodging – whether applicant promised share of respondent’s business as payment for work performed – whether applicant promised ownership of property as pay for work performed – whether respondent’s in breach of Fair Trading Act (VIC) – representations not leading to concluded contract – employer band by industrial instruments even though not a corporation, as an employer in Victoria – whether applicant entitled to sue given her receipt of Centrelink for most of the period under consideration – undertaking to repay Centrelink – finding that applicant an employee – quantification of applicant’s claim under industrial instruments and in quantum meruit. 

Legislation:  
Fair Work Act 2009

Workplace Relations Act 1996
Australian Legal Dictionary (Butterworths 1997)

Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662

Applicant: BETH LENNESE MATHIESON

Respondents: MARJORIE NIELD & KEITH GEORGE NIELD TRADING AS SOUTH END MIXED BUSINESS

File Number: MLG 650 of 2012

Judgment of: Judge Burchardt

Hearing dates: 2, 3 & 4 September 2013

Date of Last Submission: 16 October 2013

Delivered at: Melbourne

Delivered on: 29 November 2013

REPRESENTATION

Counsel for the Applicant: Mr McKenna

Solicitors for the Applicant: Beck Legal Pty Ltd

Counsel for the Respondents: Mr McKenny

Solicitors for the Respondents: Garden and Green

FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE

MLG 650 of 2012

BETH LENNESE MATHIESON

Applicant

And

MARJORIE NIELD & KEITH GOERGE NIELD TRADING AS SOUTH END MIXED BUSINESS

Respondents

REASONS FOR JUDGMENT

Introductory

1. This is an extraordinary case.  The applicant Beth Mathieson worked, on any view of the matter, for the respondents’ in their business South End Mixed Business from about August 2006 until June 2011.  In essence, she was not paid any salary during that time although she did receive various benefits.  She now seeks to be paid and puts her case under a variety of different causes of action. 

2. The respondents’ deny any obligation to pay Ms Mathieson anything and counterclaim for unpaid rent. 

3. For the reasons that follow, I am satisfied that the applicant makes out, in the main, the facts that she asserts.  I think the applicant is entitled to be paid the award wages and other entitlements that she claims, but I will otherwise dismiss both the claim and the counterclaim. 

Uncontroversial Facts

1. Although there is vivid dispute between the parties as to some aspects of the history of this matter much of what the parties put was, in fact, not the subject of significant disagreement. 

2. What follows in this section of the judgment is essentially uncontroversial.

3. The applicant was born on 9 October 1951.  Until about 1981 she lived in Tyntynder which is approximately seven kilometres from Swan Hill.  Although the date and circumstances giving rise to it are unknown, she has clearly been widowed at some point because she obtained a widows’ pension. 

4. During the 1970s (at least) she had a measure of social interaction with Marjory Nield (the first respondent).  They lived close to one another and their children appear to have attended the same school.  The applicant has also known the second respondent (Keith Nield) since about the 1970s.  All three of these individuals were then married to other persons than those they are now in relationships with.

5. In 1981 the applicant moved to Maryborough where she lived for approximately 20 years after which she returned to the Swan Hill area, moving to Swan Hill itself in 2006.

6. The applicant was not the only person to move back to Swan Hill.  The respondents, who had also lived away from Swan Hill for some time, although the details are not entirely clear, were back in Swan Hill by no later than January 2006 when they took over a milk bar/takeaway food business on 9 January 2006.  The respondents own the freehold of the building from which the business operates.  Whatever the experience of Mr Nield may have been Ms Nield had not run a milk bar or small business before. 

7. One of the employees of the business was a woman called Shirley Henderson who was a good friend of both the applicant and of Ms Nield.  Through Ms Henderson’s good offices the applicant came to start work for the respondents.  There was some reference to antecedent casual employment, but it is clear from exhibit A4 that the applicant was employed with timesheets from 15 May 2006 to 11 August 2006.  Her hours of work were, it would appear, unremarkable, being about seven to eight hours a day. 

8. It is also clear that in August 2006 the applicant, who had just separated from her then husband, told the respondents of this separation (though there is some dispute to exactly what was said) and came to live with the respondents in their store. 

9. The store had living accommodation not only for the respondents, but sufficient to provide a bedroom also for the applicant. 

10. From August 2006 onwards the applicant was not paid wages as such.  She received free board and lodging and was initially paid a figure of some $25 per day by Ms Nield.  Additionally she was permitted to take a packet of cigarettes a day from the store’s supply. 

11. The payment of the $25 per day was stopped by Ms Nield in December 2006 when the applicant told her that she was in receipt of Centrelink benefits. 

12. Although there is a vivid dispute as to the hours involved both parties agree that the applicant worked in the respondents’ store until June 2011.  She was not paid anything by way of wages throughout the entirety of this period.  

13. The store was open seven days a week and on public holidays, and on some occasions the respondents went on leave leaving the applicant, who was made a signatory to the relevant bank account, in charge.

14. The applicant also took leave from time to time, although once again there are issues as to how much and when. 

15. In about April 2007 the respondents bought a property at Jager Street Swan Hill.  Although there is some dispute as to the extent of it, it is agreed that the applicant’s sister and brother-in-law tidied this property up.  Its purchase price was $155,000.  The applicant had been to the property with Ms Nield to inspect it before purchase. 

16. A new roof was put on the property towards which the applicant made a number of payments. 

17. The applicant moved into the Jager Street property in approximately March/April 2009.  The applicant paid the respondents $200 per week thereafter. 

18. In either late 2010 or early 2011 a dispute emerged between the parties and by no later than February 2011 the applicant ceased to pay the $200 per week to which I have referred.  

19. In February 2011 the respondents went to see the applicant’s partner Dennis Barnett who worked for Centrelink.  Following that visit, during which Ms Nield told Mr Barnett that the applicant was in receipt of Centrelink benefits (something Mr Barnett did not until then know) the relationship between the applicant and the respondents broke down completely. 

20. As I have said this much of the narrative is of itself uncontroversial.  Although some of the timeline and incidents are not perhaps fully in dispute the parties’ positions about some of the other things that happened along this pathway are so significantly disputed that it is necessary now to move to the narrative given by each of them in turn.

The affidavit of the applicant

1. The applicant’s affidavit (exhibit A1) filed 12 April 2013 sets out the history of her interrelationship with each of the respondents (and particularly Ms Nield) in terms I have already described.  It is apparent that unlike Mr and Mrs Nield she has considerable experience in various retail and food selling employment. 

2. The applicant deposed that she commenced work from about Easter 2006 with the respondents but that she did not recall what was said about terms and conditions of employment. 

3. The applicant deposed that in about mid-2006 a deep fryer and bain-marie were installed which expanded the amount of food the business was able to sell. 

4. The applicant deposed that in the conversation where she told the respondents that she was leaving her husband she had also discussed her involvement with the store and with the business.  According to the version set out at paragraphs 19-21 of the applicant’s affidavit there was discussion as to the building up of the business and a desire on the part of Ms Nield “to put my wages back into the business”.  The applicant deposed that she had suggested that instead of being paid each week her pay be put into the business so that in the ultimate the parties could have one third each.  She deposed (at paragraphs 20-21):

   “20.  Marj and Keith both told me that they thought this was a good idea. 

   21.    In this discussion Marj told me that I could stay at the Store and that my work would cover my rent and that in addition to my rent they would pay me $25 per day cash and that I would work for a share of the business”.

5. Following this conversation, in early August 2006 the applicant moved into the store and she deposed to working much longer hours; every Monday to Friday from 6 am until 6 pm with an hour for lunch, and from 6 am until 2 pm on Saturdays, and 7 am until 2 pm on Sundays.  The applicant deposed to taking on more administrative and managerial duties at the store and to the development of running a canteen at a nearby abattoir, something that appears to have come to pass.

6. The applicant deposed that in about early 2007 she became a signatory to a bank account operated by the business and that she ran the store in the absence of the respondents on holiday.

7. The applicant deposed that her $25 a day payment ceased in December 2006 because “Marj spoke to me and told me that she wanted all my wages to be going back into the business” (at paragraph 28).  The applicant further deposed at paragraph 28 “after I stopped being paid I lived off my savings but had minimal living expenses as my food and accommodation were provided by the Store”.

8. The applicant went on to depose to a $20,000 alleged contribution to the business at the store.  It is clear, on any view, that in about April 2007 (see annexures BLM2 and BLM3) the applicant paid the respondents a total of $20,000 in two cheques.  The applicant deposed that this followed a discussion with the respondents in the kitchen of the store in which Keith Nield told the applicant that she would need to invest around $70,000 in the store by money or wages in order to be an equal partner.

9. The applicant deposed that shortly after the provision of these funds there was a meeting with John Scarsbrook, the respondents’ business accountant, in which this $20,000 was discussed.  The applicant deposed that Mr Scarsbrook told the applicant and the respondents that the $20,000 was to be treated as a loan and that everybody agreed.

10. The applicant went on to depose as to the purchase of the Jager Street property in April 2007.  The applicant deposed at paragraph 37 that she and Ms Nield inspected it before it was bought and that, “At that time, Marj said to me “that’s your house Beth”.  On many later occasions Marj again told me that she would gift me the house for the work I had done at the Store.  Marj repeated to me on many occasions after this time words to the effect that “it’s your house Beth”.” 

11. The applicant deposed to the cleaning up of the house by her sister and brother-in-law and said that she thereafter suggested to Ms Nield that the property be rented out which took place.

12. The applicant deposed that in about July 2007 she had suggested to Ms Nield opening the store earlier in the morning at 4 am.  Ms Nield agreed but said that she would not be getting up at that time.  The applicant started opening the store at 4 am and it is common cause that she worked on her own there until 6 am.

13. The applicant deposed that between July 2007 and October 2010 she worked from 4 am until 6 pm each day with a two hour break after lunch in the afternoon to get some sleep and six hours for each day on Saturday, Sunday and public holidays.

14. She deposed to working the canteen at the abattoir for about six months from Easter 2008.

15. The applicant deposed that she and Ms Nield had organised repairs to the roof of the Jager Street property in about mid to late 2008 at a cost of $7,000.  She deposed that Ms Nield had said she did not see why she should have to pay for anything to do with the house “as this was my duty” (at paragraph 43).

16. Nonetheless, Ms Nield paid for the new roof up front and the applicant deposed that she started making regular repayments from about December 2008.  She deposed that, prior to moving into the house in about March or April 2009, she repaid approximately $3,200 to Ms Nield as evidenced by annexures BLM4 and BLM5.

17. The applicant deposed that after moving in in about March or April 2009 she did not discuss rent with the respondents but continued to make regular payments to them.  She annexed bank records supporting this proposition (annexures BLM6 and BLM7).

18. The applicant also deposed to contributing a split system air conditioner into the property at a cost of about $3,000, and a repair to the verandah at a cost of about $1,000. 

19. The applicant deposed that in about October 2010 she ceased opening the store at 4 am and her hours went back to 6 am. 

20. The applicant deposed to occasional periods of unpaid leave during her work at the store on a random basis when it suited the respondents.  She estimated that she took a total of about six weeks off from work at the store between August 2006 and February 2011.

21. The applicant deposed that on 7 February 2011 she spoke to her partner Dennis Barnett.  He told her that the respondents had visited him at his work and that Ms Nield said that she and her husband had decided not to give the property to her anymore.  The applicant deposed to being very upset about this and ceased work two days later.  She deposed to moving out of the property on 25 June 2011.

22. It should be noted that at least one of the applicant’s statements was untruthful.  While from the exhibited material (at exhibit R3) it seems that the applicant may not have been in receipt of statutory benefits from about June 2006 until April 2007, there is no mention of the receipt of any statutory benefits in the applicant’s affidavit at all.  It is clear, however, that she was, with the exception of this period of time, in receipt of either Newstart allowance or widows’ pension throughout the entirety of her employment by the respondents.  

The applicant under cross-examination

1. It should be noted that the applicant’s evidence-in-chief was brief.  Essentially she adopted her affidavit subject to some minor corrections.  She said that she had known Neil Mesley, the witness to be called by the respondents, and she put in issue Mr Mesley’s version of some discussions alleged to have taken place through him.

2. Much of the cross-examination of the applicant turned on the applicant’s receipt of statutory benefits from time to time.  The applicant was unable to say when she applied for the Centrelink payments in 2007 and conceded that one of the questions she was required to complete was whether or not she was employed.  She said she did not remember what she had told Centrelink but thought that she had said she was working for her board and lodging.  She asserted that Centrelink knew she was working for board and lodging.

3. The applicant was taken in some detail through the various forms given to Newstart and widows’ allowance applicants with which she conceded she was familiar.  She said she received widows’ pension from 2007 until February 2011 when she cancelled it.  She said she was working and had got a job at a motel.  She had said she had progressed from Newstart to the widows’ pension because of her age.

4. The applicant was taken to exhibit R3, which is a screen dump showing receipt of statutory benefits by the applicant.  They show benefits paid from 5 June 2006 until 3 July 2006 and again from 4 April 2007 onwards without interruption through to 3 February 2011.  The applicant was taken to exhibit R5, a claim for widows’ allowance completed by the applicant on 27 March 2007.  That document shows that the applicant indicated that she was not then receiving any income from work (Part D, question 11).  It shows that the applicant had not received in the last 12 months, and did not expect to receive, any leave entitlement payments from an employer that she had worked for (Part D, question 10).  It also shows that the applicant did disclose free board and lodging (see Part C, question 1). 

5. The applicant was cross-examined about an absence of tax returns, but in my view her understanding that it was not necessary to file tax returns because she was in receipt of statutory benefits rang true.

6. The applicant also conceded that she had indicated in the widow’s allowance form that she had not worked for 20 hours or more a week in the previous 12 months. 

7. When pressed about the assorted discrepancies the applicant said she was working but was not being paid.

8. The applicant repeated that the hours claimed in her affidavit were all true and correct and that she was not being paid for the work that she did.  She said she did not notify Centrelink of the various changes in her hours because she was not getting paid.

9. The applicant was cross-examined about the development at Jager Street and stuck to her answers as to the provision of the air conditioner, curtains and blinds. 

10. The applicant was cross-examined about the way in which she came to live with the respondents.  She conceded that she had told Ms Nield in August 2006 that she had separated but denied saying she had nowhere to live.  She said she could have stayed at the farm.  She could not recall if she had told Ms Nield that she was on Centrelink benefits. 

11. The applicant denied vividly the assertion put to her that in August 2006 she had said to Ms Nield that “you can’t afford to keep me on full-time”, although she conceded that she did say that “if she wanted any money she would ask her sister Judy”.  She conceded that it was generous of the Nields to allow her to live with them rent free.

12. The applicant stuck to her story that there was indeed discussion about her coming into the business, but conceded that she was never told to work any particular hours.  She said she was told particular duties.  She confirmed that she ate her meals with the respondents and did not pay for them.

13. She said she paid for her expenses from Centrelink benefits and she also had access to goods from the store including the packet of cigarettes a day she was allowed to take.

14. It was put to the applicant that there had been oral agreement in March 2009 as to the tenancy of Jager Street and the applicant denied this.  She said she came to live in the property and was told it would be gifted to her and that it was her responsibility.  She said she paid $200 per week but not in advance.  She did not always pay every fortnight and not always into the ANZ Bank.  Sometimes she paid in cash and sometimes put money into the ATM in the shop.

15. She conceded she did not pay all the rent until 28 June 2011 and vacated under a notice to vacate from the respondents (exhibit R10).

16. It was put to the applicant that her hours of work depended upon the volume of traffic through the store, but the applicant said the store had to be kept open and that her hours did not vary save on the weekends.  It was put to the applicant that the hours she worked were entirely of her own doing, but she said that this was not entirely the case.  The applicant confirmed that she had never asked for an employment agreement nor raised her status as an employee.  She confirmed there had never been a written employment agreement and asserted she was always told she would be looked after.

1. The applicant said that Centrelink payments were a bonus and that she had no living expenses, and that the respondents knew she was on Centrelink.

2. The applicant denied that there had been no representations about her involvement in the business and repeated that Keith Nield said that in order to be part of the business she would have to put in $70,000.  She confirmed that Jager Street was going to be gifted to her and that she had made the $20,000 loan to the respondents.

3. The applicant’s credit was challenged by being shown exhibit R11 which is a record of the applicant’s convictions in 2004 for social security fraud in 2001. 

4. The applicant confirmed that the relationship between the parties came to an end in February 2011.  She said that Ms Nield went to her partner at Centrelink and told him that she was not going to gift the house anymore.  The applicant said that she thought why waste my time anymore. 

5. The applicant confirmed that annexure BLM4 to her affidavit was for payments for the roof of the Jager Street property.  It should be noted that those payments started on 1 December 2008 and go through to 19 December 2008, and the payments set out in BLM5 appear to be in January, February and March 2009.

6. The applicant was re-examined but nothing of any significance emerged from the questions put to the applicant. 

The evidence of Dennis Barnett

1. Mr Barnett is the applicant’s partner and he adopted his affidavit filed 12 April 2013 as true and correct.  That affidavit indicates that he moved to Swan Hill from Darwin in June 2009 and met the applicant shortly thereafter.  After about seven months they started dating and resided independently until about September 2010 at which time he moved into Jager Street.  He confirmed that he stayed with the applicant at Jager Street until being asked to leave in June 2011.

2. The pertinent passage of Mr Barnett’s evidence is at paragraph 6 as follows:

   “In February 2011 Marj and Keith attended Centrelink, Swan Hill where I work and requested a meeting with me.  I met with Marj and Keith in the interview room at Centrelink, Swan Hill.  In the meeting Marj advised me that Beth had not paid the rent on the Property for the last six months and as a result she and Keith would no longer be honouring a previous arrangement to gift the Property to Beth upon the expiry of her working at South End Mixed Business.  I had no knowledge of this arrangement previously.”

3. Under cross-examination Mr Barnett confirmed that he had been working for Centrelink for six years.  His work involves, inter alia, deciding if people are ready to go back to work.  He said he was not aware that the applicant was on Centrelink.  After moving in with the applicant she was paying rent and he helped with payment for the utilities, food and so on.  He said that the applicant was paying $200 off the mortgage and that the applicant had said to him that it was her home.  Until February 2011 he actually thought the applicant was paying the property off.

4. He said that Ms Nield came in in February and told him that the applicant had not paid six months rent.  She said the applicant might have been in receipt of Centrelink and not want him to get into strife.  Mr Barnett said he went home and clarified the matter of the Jager Street property and found out that the applicant was receiving the widows’ pension.  He immediately told his manager of this, and the relevant authorities, and the process took about three days.  Nothing has happened as a result to date.  He stuck to his version of the conversation with Ms Nield in February 2011.  He said that she told him that the applicant had not paid rent for the last six months so she was not going to honour the agreement to gift the house to the applicant. 

The evidence of Marjorie Nield

1. Ms Nield adopted her affidavit filed 9 August 2013.  That affidavit was, according to its terms, essentially an outline “on the basis of legal advice that I have received regarding the existence of the penalty privilege which was explained to me on the basis that I did not have to put forward any affirmative evidence in circumstances where I and my husband were facing a private prosecution by the Applicant for penalties” (at paragraph 2).

2. In further evidence-in-chief Ms Nield said she had never offered the applicant an employment contract nor had she ever discussed terms and conditions of employment with her.  She confirmed that not all rent was paid and that the sums claimed in the counterclaim were still unpaid.

3. Under cross-examination Ms Nield confirmed that she took over the business on 9 January 2006 and the nature of the business.  She confirmed that she had known the applicant as far as back as Tyntynder and knew her in the 1970s and 1980s.  She said she knew her but not well enough.  She said she had nothing to do with the applicant from the 1980s until 2006.  She and Mr Nield had returned to Swan Hill in 2005.

4. She confirmed the role of Ms Henderson in causing the applicant to start work for her. 

5. Ms Nield said that following a few days as a casual in Easter 2006, which were paid in cash, the applicant came on the books in May 2006.  She confirmed that the business was open 365 days per year.

6. She said that the applicant had volunteered to work the early shifts and she served customers.  She said that the applicant was a counter girl, not doing any cleaning, and that the business was developing at this stage.

7. She said that the applicant came in and took over and that she had not had to ask her to do anything.  The applicant had 20 years experience but nonetheless she and her husband had worked the shop for five months perfectly successfully before the applicant came.

8. She confirmed that the business continued to improve and that the applicant volunteered to open the store.  She confirmed the timesheets which are exhibit A4.

9. Exhibit A4 shows the last entry as 11 August 2006 and Ms Nield said this was the last time the applicant was an employee.  The applicant came to see her and said words to the effect “you cannot afford to pay me full-time.  I will ask my sister Judy for any money.”  She said that Mr Nield was not present at this occasion.

10. When the possibility of a conversation between her husband the applicant was put, Ms Nield denied it.  She said the applicant went home and got her things and said that she was leaving her husband, and that she would work for her board and keep.  Ms Nield denied, in the strongest terms, telling the applicant she would get part of the business, and said there was never any suggestion of a $70,000 contribution.  She said this was a deliberate lie.

11. Ms Nield said she gave the applicant $25 per day because she was not working for wages, but was working for her board and keep, because the applicant might want some personal stuff.  She did not know at that time that the applicant was on Centrelink.  She said that the applicant told her that much later in the year and that she was getting $200 per fortnight.

12. Ms Nield said that the applicant worked voluntarily for long hours and that these hours were not necessary.  She said that the applicant worked from opening until 2 pm on weekends and public holidays.  Ms Nield conceded that the applicant ran the store when she and her husband went on holidays.  She said that the applicant told them when to go on holidays.

13. Ms Nield said that the applicant would take leave as and when she wanted and that the applicant worked because she wanted to.  She did not have to do so as Ms Nield and her husband had run the store for five months without her.

14. Ms Nield says she ceased paying the applicant $25 a day in December 2006 when the applicant told her she was on Centrelink, and the applicant thereafter went on as normal.

15. Ms Nield denied very strongly that the applicant was working for a share of the business and said that there was never any conversation about Ms Mathieson going in as a partner.  She said that her husband had never spoken to the applicant on his own.

16. Ms Nield confirmed that Mr John Scarsbrook is the accountant who does the books for the business. 

17. Confronted with exhibit A5 showing payments of $20,000 made to her by the applicant, Ms Nield denied that there had ever been a discussion about an investment of $20,000 into the business.  She confirmed that the applicant gave her two cheques in the total of $20,000 and said:

    “I said I don’t need it and I don’t want it.  Just feed it through the till.”

18. She described the applicant’s evidence as to giving $20,000 as an investment into the business as a deliberate lie.  She said that the payment was discussed at Mr Scarsbrook’s office and that Mr Scarsbrook had suggested the money be treated as a loan.  Ms Nield said that the applicant gave her the money to hide it from Centrelink.  She denied saying at any stage words to the effect that “we will look after you”. 

19. Ms Nield conceded that she bought the Jager Street property in about April 2007 for $155,000.  She confirmed that the applicant inspected it with her and that the property was a bit untidy.  She said that settlement may have occurred in May 2007 and that she and her husband were the registered owners.  She denied absolutely telling the applicant that “this is your house”, and denied also saying that she would give her the house for four years’ worth of work.  She denied the amount of time it had taken the applicant’s sister and brother-in-law to prepare the house. 

20. Ms Nield said that the roof had been replaced although there was no problem with it.  She said this was just for beautification.  She said she wanted the applicant to pay for the new roof.  It was not her obligation to pay for the roof because the new roof was not necessary.  She denied asking the applicant, nonetheless, to repay her the cost, some $7,000. 

21. Ms Nield confirmed that the applicant moved in in 2009 and was unable to explain annexure BLM4 to the applicant’s affidavit showing payments to her before this time.

22. Ms Nield accepted that the payments shown in annexure BLM5 and BLM6 were made.  She also accepted that the applicant put in a split system air conditioner which Ms Nield said she had told the applicant she did not need.  The air conditioner is still there and Ms Nield said the applicant could have taken it like the chandelier and the curtains (which I infer were taken). 

23. She also conceded that some work had been done on the verandah by the applicant.

24. Ms Nield confirmed that the applicant paid rent and eventually stopped. She said she had the records of the applicant’s payments at home, but was unable to say when the last payment was made.  She did confirm that no further payments were made after the disclosure to Mr Barnett.

25. Ms Nield confirmed that the shop had been opened from 4 am in the morning as a result of the applicant’s volunteering to do so in July 2007.  Ms Nield said “don’t expect me in until 6 am”. 

26. Once the canteen at the abattoir was started the applicant worked from 4 am until 1 pm, but according to Ms Nield this was the applicant’s choice.

27. Ms Nield denied ever making any promises to the applicant whether it was to a share of the store, or to equity in Jager Street.

28. Ms Nield confirmed that the applicant continued to work after she moved out of the store premises in 2009.  She said she could not understand why the applicant worked thereafter.  She knew, however, that the applicant was getting $200 a week from Centrelink.  Ms Nield was at pains to make (non-responsive) answers against the applicant’s credit including that the applicant did not have a good background in Swan Hill.

29. Ms Nield says she went to see Mr Barnett in February 2011.  She said she wanted to save Mr Barnett’s job.  She said she had told the applicant previously to tell Mr Barnett that she was on Centrelink but that the applicant had said that she couldn’t as he would go right off (this set of assertions was not traversed in cross-examination with the applicant).

30. Following the visit to Mr Barnett the applicant worked for the next two days.  She had not told the applicant about her visit to Mr Barnett and asked rhetorically “why should I?” when questioned.

31. Ms Nield accused Mr Barnett of lying in his remarks about the cessation of paying rent and the decision not to give the applicant a part of the business.

32. In re-examination Ms Nield confirmed that she knew the applicant when she came to work for her but did not know her background.  She said that Rhonda Burge did the wages and that she relied on Ms Burge because she was not up with bookwork.  She said the applicant just walked in and took over and just did the hours she did.  There were no records.

33. She said she never asked the applicant to work.

The evidence of Neil Ronald Mesley

1. Mr Mesley is a company director who adopted his affidavit filed in Court on 2 September 2013 as true and correct (exhibit R15).

2. The affidavit annexes a statutory declaration which relevantly asserts:

   “Invariably every morning I would exchange pleasantries with Beth and/or Marj and quite often have a longer chat if the shop was not busy.  It was during one of these chats in late 2008 or 2009 with Beth that she informed me that even though she had resigned from Keith and Marj’ employ, that she was still working in the shop on occasions to pay them back for allowing her to continue to live in a room at the rear of the shop.  I can recall her saying this quite vividly as I remember thinking at the time that it was extremely generous of Keith and Marj to permit this.”

3. It should be noted that according to the statutory declaration Mr Mesley’s attendance on the store weekday mornings goes back to 2007.

4. In cross-examination Mr Mesley confirmed that he had been told about this proceeding by the respondents and that Mr Nield was unhappy that he was being sued.  He asserted that the applicant had told him she was working a couple of hours a day and conceded it could be as much as four hours. 

5. It is sufficient to say in this regard that while Mr Mesley presented as an entirely honest and sincere witness, his evidence cannot be accepted in its entirety.  It is quite apparent that the applicant was working long hours throughout the period of time between 2007 and 2011, and the cessation of what might be described as her formal paid employment took place in 2006.

6. I accept that Mr Mesley had a conversation with the applicant in which the applicant said she was working in exchange for being allowed to live in the rear of the shop.  So much is entirely uncontroversial.  Given the passage of time (some four or five years even on Mr Mesley’s own version) and the fact that his statutory declaration was written in response to a discussion with the respondents about the nature of this case, I am not prepared to accept in the face of Ms Mathieson’s denial that the conversation was exactly as he puts it.

Some brief observations about the credit of the witnesses

1. I have already dealt with the evidence of Mr Mesley above.  I will now say a few words about Mr Barnett.

2. Mr Barnett was a palpably honest witness.  His description of his immediate reaction to being told by the applicant that she was in receipt of Centrelink benefits was wholly credible.  His concern, very proper and natural given his employment, that he might in some way be complicit with any infraction of the relevant Centrelink rules was palpable.

3. Furthermore, Mr Barnett’s evidence was in its entirety given with a conviction and sincerity that compels belief.  He was not shaken one inch in cross-examination, and put shortly I accept his account of the interview he had with Mr and Ms Nield in February 2011.  It is clear that it was contemporaneously relayed to the applicant from the applicant’s evidence and there was no earthly reason for him to make it up. 

4. I turn now to the two primary witnesses.  Neither were by any means entirely convincing. 

5. It must be said, however, that the applicant’s evidence was given in part with some measure of conviction.  She was, in my view, to an extent unresponsive and evasive when being questioned about the extent of her revelations to Centrelink.  Nonetheless, her evidence as to her work for the respondents, her description of the work that she did and the hours that she worked, was given with conviction. 

6. I note that the applicant is a person who, on any view of the matter, is given to dishonest conduct.  She is plainly a serial fraudster on the Centrelink authorities.  Her convictions in 2004 (exhibit R11) speak for themselves.  Likewise, it is not possible to accept her assertion that she thought there was nothing untoward about the receipt of her statutory benefits during her period of employment. 

7. These reservations, however, are much lesser than those that I entertain, regrettably, in respect of Ms Nield. 

8. I accept that Mr Nield is in ill health and I draw no adverse Jones v Dunkell conclusion from his non-attendance at court.  Nonetheless I have not had the benefit of hearing what he had to say, and while he may well have been unable to give evidence at court, it is difficult to see why he did not file an affidavit at the very least.

9. To return to Ms Nield, it is, of course, always regrettable to have to make findings about a witness that may be off-putting or distressing to them.  Nonetheless, Ms Nield was a spectacularly bad witness.

10. She was frequently unresponsive, having a tendency, on occasion, to answer questions with questions of her own.  Her demeanour and conduct in the witness box, and indeed, when she was sitting in the body of the court more generally, was such as to cause me the gravest doubts as to her capacity correctly to recall the truth.  Her responses were often uttered in a sarcastic manner and her contempt for the applicant, in which I regret to say a measure of spite was unpleasantly evident, could not be concealed.

Findings as to the facts

1. There is no doubt that the applicant and both of the respondents have known one another for many years.  The applicant knew Ms Nield many years ago when they were living in Tyntynder.  It does not matter whether the relationship was more, or less, intimate than either of them suggest.  The fact is they knew each other at least reasonably well.

2. Having both lived away from the Swan Hill area for some years they both moved back and by 2006 the applicant was seeking employment through her friend Shirley Henderson.  Ms Henderson arranged for the applicant to start work.  The respondents, who had not managed a business of this sort before, had been operating it for some five or so months.  It is easy to see why the acquisition of an employee like the applicant who had considerable experience in this area would have been attractive.  As Ms Nield herself said the applicant just marched in and took over. 

3. The applicant was initially employed on wages and this continued until August 2006.  At that time formal payment of wages ceased.  The applicant admits that she said she would ask her sister if she needed any money at that time.  On all versions of the events the applicant continued to work extensive hours thereafter.  

4. The applicant had just separated from her husband and although she may have had alternative accommodation she clearly needed somewhere to live.  The respondents decided to give her somewhere to live and it must have been agreed that she would live rent free in the store in exchange for work.  No other explanation makes sense. 

5. Initially the applicant was paid $25 a day cash and at all times she appears to have been the recipient of a packet of cigarettes a day (a matter not devoid of value).

6. Allotting even $50 a week for rent and a further $50 a week for food, a wage of $25 a day plus a packet of cigarettes (say a total of $50 a day) would amount to some $450 per week.  This figure, however, was on any view very substantially less than what the applicant would have made for working the hours that she worked if she had been paid award wages. 

7. As I find the applicant did indeed work the hours she claimed, although there is of course a measure of imprecision involved.  The store, at least initially, opened at 6 am and the applicant’s assertion that she worked long hours is one that I accept.

1. In my view it is inherently more probable than otherwise, leaving aside my view of the demeanour of the two primary protagonists, that there must have been at least some informal discussion of the applicant being, as it were, taken into the partnership in some way.  It simply does not make sense that the applicant would have worked the very long hours that she did without some sort of idea that she would herself benefit from it to a degree greater than merely keeping her head above water.  It should be noted that the applicant was not in receipt of either Centrelink or widows’ allowance it would appear during the period from mid-2006 until April 2007. 

2. Notwithstanding that she was not in receipt of such benefits, in some fashion the applicant alerted Ms Nield to her receipt of statutory benefits it would appear in December 2006, and Ms Nield, with characteristic lack of generosity, immediately stopped the $25 per day payment.

3. All of the parties in this unusual set of transactions have every reason to reconstruct events in a manner conformable with the version for which they now contend.  While I accept that there must have been some intimation to the applicant that her wages would in some way be reapplied to the benefit of the business as a whole, in my view it is inherently entirely improbable, at least at this early stage, that Ms Nield told the applicant explicitly that she would be a partner in the business.  This is so if for no other reason than Ms Nield is simply not a person of that measure, or indeed so far as I can see any measure, of generosity.  

4. Thus the matter continued until March 2007 when the applicant applied for and received widows’ benefit.  Although she did alert the relevant authorities to her receipt of free board and accommodation she failed to alert the authorities to the fact that she was working.  She was, on any view, receiving some measure of pay even if only in the form of cigarettes.  She has a record of dishonesty in relation to Centrelink, and I have no doubt that her application was dishonest on this occasion as well. 

5. Equally I have no doubt that Ms Nield knew all about the receipt of statutory benefits as is shown by her cessation of the $25 per day payment in December 2006.  This cosy but dishonest arrangement effectively seems to have suited everybody.

6. However, one thing I do know occurred, is that the applicant advanced $20,000 to the respondents in April 2007.  The assertion by Ms Nield that she said she did not need or want this money is so farfetched as to be risible.  The fact is that Ms Nield has fastened onto this money and kept it.  She has not even allowed it as an offset to the alleged rental payments owing.  There is no conceivable legal basis upon which, on Ms Nield’s version of the events, this payment could ever have been made.  The spiteful suggestion that it was paid to hide it from Centrelink is ridiculous.

7. On any view, the parties met with the respondents’ accountant and it was agreed that the money would be described as a loan. 

8. Once again one has to imagine, what is the possible basis upon which the applicant could have been moved to advance the figure of this order?  In my view it is far more probable than otherwise that this was a $20,000 contribution towards a part-purchase of the business.  By this stage the applicant’s role in the business had expanded considerably, as had in fact the business itself, by the addition of the bain-marie and a wider range of products being sold.  There is no other logical reason for the applicant to have given the respondents $20,000 than that she herself espouses.  I think it is more probable than otherwise that this would have emerged in conversations with Mr Nield as the applicant asserts.  He has not been called to give evidence to the contrary.  The suggestion by Ms Nield that the applicant never spoke to her husband on his own is self-evidently unsound.  In the course of an inter-relationship of some six years it is immediately apparent that this is so.

9. In my view, it is more probable than otherwise that the applicant was told that a contribution of $20,000 in cash, and further contributions in unpaid labour, would eventually lead to her having some interest in the business.  The trouble is, however, that this agreement was never recorded in any meaningful fashion and was left very much in a kind of inchoate unformed condition. 

10. Pursuant to the various blandishments that were made from time to time to her (and I refer here to the description of how it was that she came to work in 2006, set out above, and the arrangement for her purchase into the business just described), the applicant worked incredibly long and hard for the respondents.  Of her own motion she started getting up in time to open the store at 4 am.  The idea that this would be done as some mere gesture of goodwill, which is the position essentially contended for by Ms Nield, only has to be stated to be rejected.  It is utterly unbelievable.

11. It is however clear that at some point the emphasis changed.  In about March or April 2007 the respondents decided to buy the property in Jager Street.  It is extremely telling that the applicant went with Ms Nield to inspect the premises before it was purchased.  There was no possible reason for the applicant to go advanced by Ms Nield.  Obviously on her version of the events, it was on any view a property in which the applicant had no interest. 

12. The applicant caused her sister and brother-in-law to clean the place up when it was first bought before it was rented out.  The applicant sought that a new roof be put on.  Whether or not this was strictly necessary is immaterial.  What is really noteworthy is that this is an extraordinary course of action on the applicant’s part if she had not been led to believe she had an interest in the property.  Ms Nield even agreed to pay out $7,000 (and as I find she is not a person who pays out monies against her own interest, far from it) and then sought to recoup it.  It is clear from the payments made in 2008 and up until March 2009 by the applicant that these were repayments of the monies for the roof. 

13. Ms Nield was utterly unable to explain these payments and that is scarcely surprising.  They are only explainable in any kind of common sense way by an acceptance of the applicant’s evidence that she was told the Jager Street property was going to be hers. 

14. There is no precise evidence as to how it came to be that the posited share of the business transmogrified into ownership of the Jager Street property.  At one point under cross-examination Ms Nield made a very sarcastic remark as to the unlikelihood of her being prepared to give a property to the applicant.  I certainly accept that that is her point of view now.  However, there are various things to be noted further about this property.

15. The first is that the rental on the property of some $10,000 per year, if rent it was, is a high rate of return for a residential property that only cost $155,000 to buy. 

16. The next thing to be noted is that the applicant of her own motion put in an expensive split system air conditioner and conducted repairs to the verandah.  This is not the conduct of a tenant but rather of a person who thinks they have an interest in the property.

17. Although the matter is very ill defined and there are real issues as to the nature of the contract, I have no doubt that the applicant was indeed told from time to time by the respondents that, in effect, this would be her property if she continued to work for the respondents.

18. Indeed, this only goes to highlight yet another matter.  The applicant continued to work for the respondents after she moved out of her free board and lodging in March/April 2009.  Ms Nield was utterly unable to explain why this was so.  On her version of the events it is not explicable.  On the applicant’s it is readily understandable.

19. Thus, things continued on from 2009 until the latter part of 2010.  Although it is clear that “rent” continued to be paid until February 2011 the fact is that a dispute had clearly emerged by that time. 

20. In February 2011 Ms Nield went to see Mr Barnett of whom she says at that time she had a higher opinion than she does now.  I accept the evidence of Ms Nield that she had broached with the applicant telling Mr Barnett about her receipt of Centrelink and the applicant’s negative response.  That is consistent with the applicant’s fraudulent past conduct.

21. Nonetheless, the alerting of Mr Barnett to the receipt of Centrelink benefits, while it may have been in part designed to protect Mr Barnett’s position as a Centrelink employee, was also designed to discomfort both him and more particularly the applicant.  It achieved that end.

22. Furthermore, it is equally clear that Ms Nield told Mr Barnett that she was no longer going to give the applicant the property at Jager Street.  She said that this was for non-payment of rent, although the records appear to suggest that the periodic payments of $200 per week were still being paid.  I cannot say with certainty quite why the respondents decided to bring matters to a head in this fashion, but the reality is that they did.

23. The applicant’s response to being told about her not getting the Jager Street property is illustrative.  Within two days she had abandoned her employment.  No further rent was paid thereafter until eviction in June 2011.

How do the facts as found operate upon the legal claims in this case?

Was there an employment relationship?

1. The kernel of the respondents’ case was that there never was an employment relationship.  There was never any intention to create legal relations.  The applicant worked as a volunteer. 

2. This position was what gave rise to the very extensive cross-examination of the applicant in relation to her receipt of statutory benefits.  Put shortly, what was being put was that the applicant on statutory benefits, simply had no need to, and therefore was not required to, do any work for the respondents.

3. I roundly reject this assertion.  As I have already indicated there was plainly a discussion of some sort about the applicant getting a reward, whether by part ownership of the business or by the Jager Street property, from time to time. 

4. While it is true that the parties never discussed pay and conditions of employment in terms, it is equally clear that it was never agreed between the parties that the applicant would receive no reward for her work. 

The claim as made under the awards

1. The applicant has set out in submissions the basis upon which it is put that the applicant’s work was indeed covered by the various awards and industrial instruments that had been tendered.  In my opinion there is no doubt that this submission must be accepted.  It is sufficient to say that the award classification contended for by the applicant is well and truly made out on the materials. 

2. I reject the submission of counsel for the respondents that these instruments do not operate because the respondents are not a corporation. 

3. Neither party made any extensive submissions about this aspect of the matter.  Neither counsel referred me to the legislation in any detail or referred to any of the sections either of the Fair Work Act 2009 or the antecedent Workplace Relations Act 1996 as amended from time to time. It is, however, clearly the case that Victoria is a referring State within the meaning of s.30B of the Fair Work Act 2009 (inter alia) and that the submission of the respondents cannot be upheld. 

4. In these circumstances the applicant was always an employee entitled to the award conditions that she claims.  It is clear that there is a measure of imprecision in the figures she claims, which arises out of the failure of the employer (albeit connived at by the employee) to maintain any relevant records.  In these circumstances, the Court must do the best it can and take a robust approach. 

5. The applicant has set out her hours of work in her affidavit.  She was cross-examined about those hours and stuck firmly to her evidence.  Her evidence in this regard struck me as being given with a passionate sincerity. 

6. I note that the affidavit of Ms Nield puts in issue in terms, whether the applicant was required to work any hours at all but does not put in issue the number of hours the applicant says that she worked.  This is to an extent consistent with something the applicant said in cross-examination namely that she was never told to work any particular hours but was told of the particular duties she was to perform.  In cross-examination Ms Nield confirmed again the applicant worked voluntarily but did confirm she worked long hours.  She said however that it was not necessary for the applicant to have worked those hours. 

7. Ms Nield’s evidence was that the applicant worked from opening time until 2 pm on weekends and public holidays. 

8. In these circumstances, in the face of the direct assertion by the applicant as to her hours worked, which was at least in part confirmed by Ms Nield’s evidence and not otherwise contradicted, it is clear that I should accept and do accept the applicant’s evidence as to the hours she worked.  I do not accept the inference in Ms Nield’s evidence that the applicant, so to speak, worked unnecessary hours.  There was no need for her to do so, particularly after she moved into the Jager Street property and had somewhere else to go should she so desire. 

9. One aspect of the matter that has caused me some reflection is whether or not it is open for the applicant to assert award entitlements when, in truth, her own case is that she was involved in something akin to a joint venture, or purchase of part of the business.  This is after all, her case on the facts as she puts them. 

10. In circumstances, however, where the employer has vividly denied any such agreement and where the terms of the agreement (a matter to which I will return) were never clearly thought through, I think that the employer is bound by the industrial instruments to pay the amounts prescribed in them. 

11. One aspect of the matter, however, that the applicant does concede is that she would have to repay to Centrelink all the monies that she was paid from time to time during the currency of the period for which she now sues. 

The Fair Trading Act claim

1. Here the applicant relies in a fairly conventional way upon the misleading and deceptive conduct provisions of the legislation.  I accept that the representations that the applicant’s asserts were, in part, made to her.  Clearly something (although I do not know precisely what) was said about her buying into the business or obtaining an interest in it in 2006 and 2007.  This changed by 2007 to generalised assertions about receipt of the Jager Street property. 

2. The difficulty with an action for damages on these representations, however (bearing in mind that the applicant plainly altered her position to her prejudice in reliance upon these representations), is that the agreement was never precise.  The applicant did give the respondents $20,000 but nothing was ever really agreed as to how much, or what work she would have to do, to be given what percentage of the business. After all the respondents own the freehold of the business which would be worth immeasurably more than the business as a going concern.  What was it she was contributing to for an alleged total of $70,000?

3. There is no evidence as to the value of the business, nor of the premises.  The matter is attended by far too much doubt to represent a sufficiently defined set of circumstances to ground any kind of meaningful damages order.

4. The same criticisms can validly be made of the Jager Street representations.  I accept that they were made.  But what was the term of the agreement?  Was the applicant to work one year, five years or 10 years to receive unencumbered freehold of this property?  It is all likewise attended by far too much doubt to be enforceable. 

The $20,000 loan

1. On any view the applicant advanced the respondents $20,000 which they have simply withheld.  The applicant is clearly entitled to get that money back since it was paid under a fundamental mistake of fact (namely that it was being a contribution to purchase of a business) (see Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662.)

2. In my view, in the circumstances of this case the applicant is entitled to interest on that sum which the respondents have had and extracted for their own use from the time it was advanced (which I will accept as 30 April 2007 for convenience) until now. 

The Counterclaim

1. The applicant paid rent up until February 2011 and paid sums of $200 per week up until that time.  She did not move out until June 2011.  Whatever the proper characterisation of the monies the applicant was paying it seems to me more probable than otherwise that they were in truth treated by the parties as being akin to rent.  It was an alleged failure to pay rent that led to the sundering of the relationship.  The respondents, on any view, would be entitled to mesne profits in relation to the applicant and Mr Barnett’s occupation of the property in any event.

2. Against this the applicant carried out improvements at the property.  She spent $3,000 on a split system air conditioner, $1,000 on the verandah and, earlier, monies on the new roof.  I reject the respondents’ suggestion that these are of no value and that the applicant can remove them.

3. In what are plainly unsatisfactory circumstances, but in an endeavour to do justice between the parties, I find that the sum of $4000 should be offset against the alleged arrears of rent.

Quantum Meruit

1. The issue of quantum meruit was scarcely touched on during the currency of the proceedings.  Counsel for the applicant put it as a kind of synonym for unjust enrichment. 

2. It is not the task of a first instance court like this to write treatises on the law, but in my view, the phrase quantum meruit is well suited to this proceeding.  It is defined by Butterworths Australian Legal Dictionary (Butterworths 1997) as “so much money as the plaintiff reasonably deserves to have”.

3. As the learned authors of that work assert:

   “A claim for quantum meruit may be contractual or restitutionary in character.  It is contractual where a contract fails to state a price for services, and the court implies a term requiring the payment of a reasonable sum:   Horton v Jones (1934) 34 SR (NSW) 359. It is restitutionary where there is no contract between the parties, or a valid or unenforceable contract has been discharged for breach or repudiation.”

4. In many ways either or both of those characterisations would apply here.  In my view, there was a contract which was to the effect that the applicant would receive reward (albeit never very properly or clearly defined) for the work that she did.  In the alternative there was not a contract but it is plainly unjust to allow the respondents to have had the benefit of the applicant’s labour without reward.  

5. Because the parties had not in substance addressed the issue of quantum meruit at all, I sought further written submissions from them.  I do not need to refer in detail to those submissions although I have had regard to them, as they do not in my view take the matter generally much further.  I accept, however, the submission advanced by the applicant (although not perhaps formulated in precisely these terms) that the applicant’s statement of claim and relief sought were broad enough to encompass a claim in quantum meruit (see paragraph 5 of the applicant’s written submissions).  I also accept the submissions at paragraphs 16 and 17 where it is submitted, in substance, that the equitable outcome in the evaluation of damages under this heading is the market value for services provided at the time at which they were provided.  This conclusion would lead to the same order in respect of the quantification of the applicant’s damages for breach of award albeit under a different cause of action.  

Conclusion

1. Clearly there will be orders in favour of the applicant in respect of her claims made under the industrial instruments as I have accepted them.  There have also been claims for the imposition of civil penalties.  The parties will need to consider these reasons for judgment and I will then relist the matter for submissions as to the question of civil penalties and any other relevant considerations. 

I certify that the preceding one hundred and eighty (180) paragraphs are a true copy of the reasons for judgment of Judge Burchardt. 

Date:  29 November 2013