Naroth v Innovative Hair Loss Solutions Pty Ltd and Ors (No.3) - [2013] FMCA 209

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NAROTH v INNOVATIVE HAIR LOSS SOLUTIONS PTY LTD & ORS (No.3)

[2013] FMCA 209

CONSUMER LAW – Alleged misleading and deceptive conduct in trade and commerce – alleged unconscionable conduct.

CONTRACT – Alleged breach of service contract – whether provision of accounting and bookkeeping services exclusive – whether breaches of particular alleged terms of service contract – whether contract repudiated.

Federal Magistrates Act 1999 (Cth), ss.76, 77
Federal Magistrates Court Rules 2001 (Cth), Schedule 1
Occupational Safety and Health Act 1984 (WA), ss.19, 22, 23D
Trade Practices Act 1974 (Cth), ss.51AC, 52

Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99
Australian Competition and Consumer Commission v 4WD Systems Pty Ltd & Ors (2003) 200 ALR 491; [2003] FCA 850
Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No. 2) [2009] FCA 17
Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] ATPR 42-290; [2009] FCA 682
Balding v Ten Talents Pty Ltd (2007) 162 IR 17; [2007] FMCA 145
BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of The Shire of Hastings (1977) 180 CLR 266
Byrne & Frew v Australian Airlines Limited (1995) 185 CLR 410
James v Australia and New Zealand Banking Group Ltd Bank (1986) 64 ALR 347
Maritime Union of Australia & Ors v Geraldton Port Authority & Ors (1999) 165 ALR 67; [1999] FCA 899
Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395; [2006] FCAFC 40
Shevill & Anor v The Builders Licensing Board (1982) 149 CLR 620
Trans Petroleum Australia Pty Ltd v White Gum Petroleum Pty Ltd [2011] WASC 150

NC Seddon and MP Ellinghous, Cheshire and Fifoot’s Law of Contract (9^th Australian Edition) (Chatswood: LexisNexis Butterworths, 2008)

Applicant:

NANDITA RAGINI NAROTH

First Respondent:

INNOVATIVE HAIR LOSS SOLUTIONS PTY LTD

Second Respondent:

DEREK BEST

Third Respondent:

DEBRA BEST

Fourth Respondent:

ALEXANDRA MCCLUNIE

File Number:

PEG 119 of 2010

Judgment of:

Lucev FM

Hearing dates:

21, 23, 24, 25 February, 29, 30, 31 August, 1, 2, 26, 27 September 2011

Date of Last Submission:

27 September 2011

Delivered at:

Perth

Delivered on:

28 March 2013

REPRESENTATION

The Applicant:

In person

Counsel for the Respondents:

Mr G Dean

Solicitors for the Respondents:

Metaxas & Hager

ORDERS

The applicant is entitled to judgment in the sum of $2,253.63, plus interest at the rate of 6% per annum on and from 9 April 2010 to the date of judgment, and from the date of judgment until payment, on her claim for monies due but not paid under invoice 78 rendered on 9 April 2010, but otherwise the applicant’s claim is dismissed.
The first respondent is entitled to judgment on its counterclaim in the sum of $14,437.50, plus interest at the rate of 6% per annum on and from 9 April 2010 to the date of judgment, and from the date of judgment until payment.
The applicant’s applications in a case filed 4 February 2011 and 25 July 2011 be dismissed.
As to costs:
(a)the applicant and respondents to file and serve written submissions and costs schedules, on the basis of the costs schedule at Schedule 1 to the Federal Magistrates Court Rules 2001 (Cth) by 12 April 2013;
(b)the applicant and respondents to file written submissions in response to the written submissions filed under paragraph (a) by 26 April 2013; and
(c)the issue of costs is listed for hearing at not before 11.00am on 17 May 2013 for not more than one hour, with the applicant and the respondents’ submissions limited to not more than one half hour.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 119 of 2010

NANDITA RAGINI NAROTH

Applicant

And

INNOVATIVE HAIR LOSS SOLUTIONS PTY LTD

First Respondent

DEREK BEST

Second Respondent

DEBRA BEST

Third Respondent

ALEXANDRA MCCLUNIE

Fourth Respondent

REASONS FOR JUDGMENT

Application

Nandita Ragini Naroth, the applicant, alleges that the respondents:
a)breached a contract for services under which she was engaged by the first respondent to provide bookkeeping and accounting services (“Service Contract”);
b)repudiated the Service Contract; and
c)contravened the provisions of s.51AC and 52 of the Trade Practices Act 1974 (Cth) (“TP Act”) with respect to unconscionable and misleading and deceptive conduct respectively in relation to the Service Contract.
The applicant alleges loss and damage by reason of the alleged breach of contract, repudiation of contract, and contraventions of the TP Act.
The first respondent, Innovative Hair Loss Solutions Pty Ltd, is, as its name suggests, a company which seeks to solve hair loss problems for its clients. The second and third respondents are directors of the first respondent, and are also married. The second respondent is the managing director of the first respondent, and the third respondent was, for most of the relevant period, engaged as principal/technical adviser for the first respondent. The fourth respondent was engaged in early March 2010 as the first respondent’s operations manager.
The first respondent counterclaims for breach of contract by reason of an alleged failure to pay a termination fee by the applicant.
There are also two applications in a case filed 4 February 2011 and 25 July 2011 by the applicant in relation to procedural issues associated with compliance with earlier orders of the Court.

Evidence – credibility

The respondents attacked the applicant’s credit on a number of bases, alleging that the applicant’s evidence was self-serving, untruthful, exaggerated and based on a refusal to concede obvious matters.
The applicant often gave answers in relation to propositions that she had asserted which were either untruthful, significantly exaggerated or sought to avoid answering the question. Examples of this include:
a)her endeavours to draw a distinction between accounting services and accountant services (as provided by the first respondent’s external accountants) in the context of a suggestion in cross-examination that the applicant was not the exclusive provider of accountancy services to the first respondent: Transcript 24 February 2011 at pages 15-16;
b)the annexures concerning Mates Rates in relation to the charging of market rates to an IT service provider: Transcript 23 February 2011 at pages 146 and 147, compare 25 February 2011 at page 56;
c)the applicant’s evidence that she set up new studios for the first respondent: Applicants 19 July 2010 Affidavit at para.22, when the evidence under cross-examination was that she did no more than set up the relevant accounting systems for the new studios: Transcript 23 February 2011at pages 109 to 110;
d)the applicant’s claim that she was running the day to day operations of the first respondent’s business: Applicants 19 July 2010 Affidavit at para.19, with her answers in cross-examination: Transcript 23 February 2011 at pages 110 to 112, during the course of which the Court observed:
HIS HONOUR: What is the answer to the question, Mr [sic] Naroth? You have a propensity (a) to take a long time to answer the questions and (b) to answer a question with a question or to seek to avoid answering the question?
e)the applicants evidence about services allegedly performed for the first respondent, such as:
i)managing and updating 23 employees: Transcript 23 February 2011 at pages 114-116;
ii)employment contracts: Transcript 23 February 2011 at page 117;
iii)reading, actioning and replying to 30 to 40 emails a day: Transcript 23 February 2011 at pages 125 to 126;
iv)dealing with government and statutory bodies on non-accounts matters: Transcript 23 February 2011 at pages 128 -129;
v)facilitating and coordinating creditors requirements for them to provide or perform services: Transcript 23 February 2011 at page 138; and
vi)her claim that she provided rental management services for the first respondent’s Subiaco commercial property when she in fact did no more than raise invoices and follow-up payments as part of the normal accounting functions: Transcript 23 February 2011 at page 147 to 148; and
f)the applicant’s evidence that the first respondent’s move to Wangara affect her ability to provide services from a home office because she could not collect the end of day reports, when in fact that was not the case: Transcript 23 February 2011 at pages 100 to 104.
The applicant also refused to concede obvious matters where she perceived they may have affected her case. Examples include:
a)that people may have different views as to what constituted bookkeeping and accounting services: Transcript 23 February 2011 at page 107;
b)that she did not have a good working relationship with Ms McClunie: Transcript 25 February 2011 at page 61; and
c)the plain meaning of emails which were put to her: Transcript 24 February at pages 62 and 63 and 25 February 2011 at pages 17 to 18.
Significant also for the applicant’s credit is the assertion at paragraph 50 of the Applicant’s 19 July 2010 Affidavit that on 12 April 2010 she “delivered all the papers, documents and files belonging to the … [first respondent] that were in my office to the [first respondent’s accountant]”. When one compares that statement to the more than 240 pages of annexures to the Applicant’s 19 July 2010 Affidavit, and the more than 200 pages of annexures to the Applicant’s 10 December 2010 Affidavit, the vast bulk of which are comprised of documents which must belong to the first respondent, the applicant’s assertion is obviously false, and given the proximity of the assertion to the documents in question in the Applicant’s 19 July 2010 Affidavit it can only have been knowingly so.
In the Court’s view when looking at the applicant’s evidence as a whole, the Court has little confidence that the applicant has given evidence which is accurate and balanced, particularly on critical matters. The examples set out above indicate a propensity on the part of the applicant to give evidence which was untruthful, or to exaggerate matters, or to refuse to concede matters which may have been to her detriment. The applicant was not assisted by taking an adversarial stance on most matters, or by the often irritable, impatient and ill-tempered delivery of her evidence and submissions. At one point the Court was moved to observe as follows:
Ms Naroth, I have told you at least three times now, and I am sure that you appreciate, that your role is to answer questions. It is not to effect an angry outburst at Mr Dean and tell him what it is that you will tell him or how you will tell it to him or what he is to ask you or whether he is going drill you all day or not. He is entitled to cross-examine you. He has not gone beyond the bounds of anything in relation to his cross-examination which I would regard as untoward or onerous. Would you please answer his questions?
Transcript 24 February 2011 at page 24. See also Transcript 1 September 2011 at page 132 – “…an inappropriate observation to the witness”; Transcript 2 September 2011 at page 41 (making a habit of interrupting the Court); Transcript 27 September 2011 at page 6 (inappropriate to submit “…what spewed out of …[the witness’] mouth…)
The Court considers that the applicant’s evidence must be treated with circumspection, and particularly so where it is in conflict with the evidence of other witnesses.
By contrast to the applicant, each of the second, third and fourth respondents gave evidence in a businesslike manner, and generally kept a cool and calm disposition, in the face of cross-examination which was often unnecessarily lengthy or irrelevant. The Court sees no reason to doubt that the second, third and fourth respondents endeavoured to give their evidence in a proper and truthful manner.
For the above reasons, in circumstances where there is conflict between the evidence of the applicant and the respondents the Court has preferred the evidence given by the respondents over that of the applicant.

The Service Contract

The terms of the Service Contract

The contractual arrangements between the applicant and the first respondent are set out in the Service Contract entered into on 19 March 2009. The terms of the Service Contract (typed from the original without amendment) are as follows:
1.Period of Service Contract
1.1Three (3) years from the date of this Service Contract
2.Definition and Scope of Services Rendered
2.1Fully outsourced accounting and bookkeeping service (“Services”) provided by the Contractor to the Company and all its associated entities.
2.2To facilitate provision of services by the Contractor the Company provides the Contractor remote access and direct access to the accounts department at 4/1 Station Street, Subiaco
2.3Innovative Hair Loss Solutions studio at 4/1 Station Street Subiaco WA 6008 will be venue for all accounts meetings.
3.Payment Schedule for Services
3.1Fifty five dollars ($55) per hour effective 23 April 2009 and locked in till 22 April 2012
3.2GST if applicable would be charged additionally.
4.Confidentiality
4.1The Contractor takes all reasonable steps to keep all Confidential Information of the Company confidential and such confidentiality is extended to its employees.
4.2Notwithstanding clause 4.1, the Contractor will not be liable or responsible for any claims or damages from whosoever arising out of or attributable to the operations or performances of services for or in behalf of the client by the Contractor.
5.Termination of the Service Contract
5.1Should either of the parties wishes to terminate this Service Contract, a termination fee of amount equivalent to 2 (two) months’ services billing fee is payable by the party wishing to terminate the Service Contract.
6.Agreement
6.1This Contract supersedes any previous agreement.
6.2Any change to this Service Contract will be made only with the written consent of both parties.
There is a dispute in this case as to the definition and scope of the services rendered, and in particular what is defined as “Services”, namely the “Fully outsourced accounting and bookkeeping services” to be provided by the applicant to the first respondent. For reasons which will become evident it is unnecessary to precisely define what is meant by “accounting and bookkeeping services”.
The general principles of construction in relation to a contract are that:
a)the primary duty of the Court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied;
b)intention, in this context, describes what would be objectively conveyed by the words used and the circumstances in which they were used;
c)the meaning of the terms of a written contract is determined by what a reasonable person would have understood those terms to mean, and requires consideration of the text, but also the surrounding circumstances known to the parties, and the purpose or object of the transaction; and
d)in ascertaining the meaning of the words the parties used, the Court must consider the contract as a whole.
See Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99 at 109 per Gibbs J; Trans Petroleum Australia Pty Ltd v White Gum Petroleum Pty Ltd [2011] WASC 150 at para.31 per Allanson J.
The applicant contends that the first respondent agreed that the first respondent’s accounting and bookkeeping services would be performed exclusively by the applicant on a fully outsourced basis. The first respondent asserts that whatever accounting and bookkeeping services it determined ought to be provided by the applicant would be provided by her on a fully outsourced basis, but that the arrangement was not one whereby the applicant had the exclusive right to perform all of the first respondent’s accounting or bookkeeping services. The first respondent contends that there is nothing in the wording of the Service Contract that grants to the applicant any exclusive right to provide any accounting or bookkeeping services to the first respondent.
There is nothing on the face of the Service Contract which indicates that it is an exclusive arrangement. Had the parties intended to enter into an exclusive arrangement whereby the first respondent’s accounting and bookkeeping services were to be outsourced exclusively to the applicant it would not have been difficult to convey that meaning within the Service Contract.
There is nothing in the Service Contract which would indicate that it was intended to be an exclusive arrangement whereby all of the first respondent’s accounting and bookkeeping services were to be provided by the applicant. Rather, the sense, particularly at clause 2.1, is that such accounting and bookkeeping services as were to be provided by the applicant to the first respondent were to be provided on a fully outsourced basis.
Put differently, there is nothing in the Service Contract which precludes others from also being contracted to provide accounting and bookkeeping services to the first respondent. Indeed, on the evidence, this occurred throughout the period of the applicant’s engagement by reason of the engagement of two consecutive external accounting service providers, including Mr Buswell, who appears to have provided accounting services, including payroll and taxation services.
An exclusive arrangement term cannot be implied into the Service Contract. There is nothing:
a)in the nature of the Service Contract which requires it to be an exclusive arrangement;
b)in the Service Contract which makes a term as to exclusivity so obvious that it goes without saying; and
c)that makes such a term necessary to give business efficacy to the Service Contract.
BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of The Shire of Hastings (1977) 180 CLR 266 at 283 per Lord Simon of Glaisdale; Byrne & Frew v Australian Airlines Limited (1995) 185 CLR 410 at 442 and 444 per McHugh and Gummow JJ (“Byrne & Frew”).

The Contract Claim

The applicant alleged that the respondents were in breach of the Service Contract. The applicant’s claim in that regard was put on a number of different bases as outlined hereunder.

The Occupational, Safety and Health Act term

The applicant alleged that breaches of various duties under ss.19, 22 and 23D of the Occupational Safety and Health Act 1984 (WA) (“OSH Act”) were breaches of express and implied terms in the Service Contract. Sections 19, 22 and 23D of the OSH Act provide as follows:
19 . Duties of employers
(1) An employer shall, so far as is practicable, provide and maintain a working environment in which the employees of the employer (the employees ) are not exposed to hazards and in particular, but without limiting the generality of the foregoing, an employer shall —
(a) provide and maintain workplaces, plant, and systems of work such that, so far as is practicable, the employees are not exposed to hazards; and
(b) provide such information, instruction, and training to, and supervision of, the employees as is necessary to enable them to perform their work in such a manner that they are not exposed to hazards; and
(c) consult and cooperate with safety and health representatives, if any, and other employees at the workplace, regarding occupational safety and health at the workplace; and
(d) where it is not practicable to avoid the presence of hazards at the workplace, provide the employees with, or otherwise provide for the employees to have, such adequate personal protective clothing and equipment as is practicable to protect them against those hazards, without any cost to the employees; and
(e) make arrangements for ensuring, so far as is practicable, that —
(i) the use, cleaning, maintenance, transportation and disposal of plant; and
(ii) the use, handling, processing, storage, transportation and disposal of substances,
at the workplace is carried out in a manner such that the employees are not exposed to hazards.
(2) In determining the training required to be provided in accordance with subsection (1)(b) regard shall be had to the functions performed by employees and the capacities in which they are employed.
22 . Duties of persons who have control of workplaces
(1) A person that has, to any extent, control of —
(a) a workplace where persons who are not employees of that person work or are likely to be in the course of their work; or
(b) the means of access to and egress from a workplace,
shall take such measures as are practicable to ensure that the workplace, or the means of access to or egress from the workplace, as the case may be, are such that persons who are at the workplace or use the means of access to and egress from the workplace are not exposed to hazards.
(2) Where a person has, by virtue of a contract or lease, an obligation of any extent in relation to the maintenance or repair of a workplace or the means of access to and egress from the workplace, the person shall be treated for the purposes of subsection (1) as being a person that has control of that workplace or that means of access or egress.
(3) A reference in this section to a person having control of any workplace or means of access to or egress from a workplace is a reference to a person having control of that workplace or that means of access or egress in connection with the carrying on by that person of a trade, business or undertaking (whether for profit or not).
….
23D . Contract work arrangements
(1) This section applies where a person (the principal ) in the course of trade or business engages a contractor (the contractor ) to carry out work for the principal.
(2) Where this section applies, sections 19 and 19A have effect —
(a) as if the principal were the employer of —
(i) the contractor; and
(ii) any person employed or engaged by the contractor to carry out or assist in carrying out the work concerned,
in relation to matters over which the principal has the capacity to exercise control; and
(b) as if —
(i) the contractor; and
(ii) any person referred to in paragraph (a)(ii),
were employees of the principal in relation to matters over which the principal has the capacity to exercise control.
(3) Where this section applies, the further duties referred to in subsection (4) apply and sections 20A, 23H and 23J have effect —
(a) as if the principal were the employer of —
(i) the contractor; and
(ii) any person employed or engaged by the contractor to carry out or assist in carrying out the work concerned;
and
(b) as if —
(i) the contractor; and
(ii) any person referred to in paragraph (a)(ii),
were employees of the principal.
(4) The further duties mentioned in subsection (3) are —
(a) the duties of an employee under section 20; and
(b) the duties of an employer under sections 23G(2) and 23I(3).
(5) An agreement or arrangement is void for the purposes of this section if it purports to give control to —
(a) a contractor; or
(b) a person referred to in subsection (2)(a)(ii),
of any matter that —
(c) comes within section 19 or 23G(2); and
(d) is a matter over which the principal has the capacity to exercise control,
but this subsection does not prevent the making of a written agreement as mentioned in section 23G(3).
(6) A purported waiver by a contractor of a right that arises directly or indirectly under this section is void.
(7) Nothing in this section derogates from —
(a) the duties of the principal to the contractor; or
(b) the duties of the contractor to any person employed or engaged by the contractor.

The claim is made in contract: it does not purport to attempt to be a prosecution for breach of the OSH Act, even assuming such a prosecution could be brought in this Court.
The claim as to an express term can be dealt with shortly. There is no express term in the Service Contract as alleged.
As to the assertion that there is an implied term that the statutory provisions of the OSH Act are implied into the Service Contract the Court is of the view that no such term or terms ought to be implied. The OSH Act does not provide for those of its terms imposing duties to be imported or implied into contracts. To give business efficacy to the Service Contract it is not necessary to imply any statutory provision from the OSH Act, and in particular it is unnecessary to imply the provisions imposing a duty on employers and contractors to provide a safe working environment. The Service Contract was efficacious in a business sense without any such implied term. It is unnecessary to imply the terms of the OSH Act into a service contract of a purely commercial nature as to the provision of bookkeeping and accounting services. Both the Service Contract and the OSH Act can stand and apply independently of the other. In those circumstances, and in the absence of any express statutory provision importing the terms of the OSH Act into this type of contract, there is no room or necessity for the implication of the terms of the OSH Act into the Service Contract: see generally Byrne & Frew at pages 441-453 per McHugh and Gummow JJ.
For the above reasons, the claim in relation to breach of contract based on express or implied terms of the OSH Act must fail. It is unnecessary to deal, therefore, with the respondents’ submissions in relation to the nature and meaning of the working environment, and whether it was possible for the emails concerned to give rise to a breach of the terms of the OSH Act.

Alleged repudiation by the first respondent

The applicant asserts that the Service Contract was not terminated in accordance with its terms. That is, that the requisite payment under clause 5.1 of the Service Contract was not made. The applicant asserts that the Service Contract was repudiated by the first respondent. The basis for the repudiation is said to be a number of emails sent from the fourth respondent, recently employed by the first respondent as operations manager, and which are said by the applicant to constitute bullying, harassment, abuse, the making of false and malicious allegations, undue duress, conspiracy to damage and sabotage.
To the extent that any claim with respect to the alleged repudiation appears to be made against the second, third and fourth respondents, it cannot succeed: they are individuals who are not parties to the Service Contract.
In order to deal with the alleged repudiation claim by the applicant as against the first respondent it is necessary to detail certain of the matters said to constitute the repudiation relied upon by the applicant.

The 9 March 2010 Emails

On 9 March 2010 the fourth respondent sent an email to the first respondent with the subject heading “Data Entry Temp”: Annexure A27 to Applicant’s 19 July 2010 Affidavit (“Data Entry Temp Email”), the text of which was as follows:
Hello Nandita
I just wanted to let you know that we are looking at getting a data entry temp so we can catch up with shortcuts and help you out with quickbooks data entry too J
I will let you know how we go and when she/he is starting, but I’m hoping to have someone here within a week or so. Please let me know if there is any specific timetable you want to work to so as to ensure minimum disruption during the training time.
I want to ensure all information and data are captured and cleaned before the end of the financial year.
Regards
Alexandra McClunie
Manager – Operations
Less than an hour later at 11.12am the applicant replied as follows:
Hi Alexandra
We need the data entry person only for shortcuts and not for QuickBooks
I need to pass on to you the operations task I am and have been doing in the absence of an Operations Manager. For this I need to sit with you and go through Shortcuts and Enterprise Manager. The only training from my side would be for your Shortcuts and Enterprise Manager. Next week would be good for training.
Please let me know.
Regards
Nandita
The applicant alleges that the Data Entry Temp Email from the fourth respondent constitutes bullying and harassment. On its face that suggestion simply does not accord with its text or tenor. It is, manifestly, no more than an indication that a temporary data entry employee would be engaged to “catch up” on what was obviously perceived by the fourth respondent as a work back-log. Significantly:
a)the applicant’s only demurrer is as to the nature of the work to be performed; and
b)the applicant does not advert, at all, to the subsequently suggested bullying and harassment.
It also needs to be understood that this was an email sent the day after the fourth respondent commenced as operations manager with the first respondent. That fact alone makes it inherently unlikely that there was any intention to bully or harass, even if such intention had been evident in its text and tenor, which it was not. Further, no suggestion that the Data Entry Temp Email was bullying or harassing was put to the fourth respondent in the very limited cross-examination of her by the applicant: Transcript 26 September 2011 at pages 152-153.
In the circumstances, the allegation that the Data Entry Temp Email is bullying or harassing is not made out.

The 26 and 27 March 2010 emails

In response to earlier requests the applicant sent to the second respondent a copy of the Service Contract on Friday, 26 March 2010. The second respondent then sent the following message back to the first respondent with the subject line “Contract”:
Without Prejudice
Justice would prevail as i am sure negligence would be no defence
Sent from my Iphone
Regards
Derek Best
Annexure 41 to Applicant’s 19 July 2010 Affidavit.
The second respondent intended to send this Iphone message to his lawyers and not to the applicant. The second respondent gave evidence that the 26 March 2010 email was sent to the applicant by mistake, as indicated to the applicant in an email from the second respondent on 27 March 2010, when he apologised and indicated that the 26 March 2010 email was “a reply to Arthur not Accounts”: Annexure 42 to Applicant’s 19 July 2010 Affidavit. The reference to “Arthur” was a reference to Mr Arthur Metaxas, a lawyer.
On this slimmest of threads, and with no other evidence to support the allegation, the applicant alleged that the second respondent and Mr Metaxas were engaged in a conspiracy to do harm to the applicant, based on the second respondent’s 26 March 2010 and 27 March 2010 emails. That allegation was subsequently withdrawn, but it demonstrates the fanciful and fundamentally flawed rationale which the applicant was capable of manifesting, and did manifest during the course of these proceedings.
There is nothing in the exchange of emails, which amount to no more than four substantive lines in total, which suggests harassment and bullying by the second respondent.

The 1 April 2010 payroll emails

On 1 April 2010 the fourth respondent sent an email to the first respondent’s external accountants, and copied it to the applicant and the second respondent: Annexure 51 to Applicant’s 19 July 2010 Affidavit. The subject heading was “Payroll”. The email was as follows:
Reegan
As discussed see below.
I have not been paid but won’t starve. I am not going to call other staff members to find out if this is the case as I do not want to cause unrest. During this time of change disruptions to salary payments have a flow on effect because of assumptions made by staff.
It is unacceptable that people are paid this late after the end of the salary period.
Payroll is to be completed and banked to the employees’ bank accounts by Wednesday of each week after the end of the payroll period. Although I concede I made errors in using an incorrect point of reference – these were rectified by Nandita and I over the phone in a telephone conversation that lasted less than 15 minutes on Tuesday, ergo one would expect within hours after that payroll was completed, unless there are other things going on in the background that I am not aware of. Reegan we need a backup authority for bank transfers if this hold up is because Derek is out of the country and that would have to be you I assume.
I will have no option but to outsource the payroll if we are unable to guarantee staff are paid on time every time.
Nandita please can I have comment from you by the end of the day.
Regards and thanks
Alex
The above email is variously characterised by the applicant as:
a)harassment, bullying and abusive;
b)a malicious and false allegation; and
c)a threat to strip her of her payroll services provided to the first respondent.
On 1 April 2010 the fourth respondent was in charge of the business of the first respondent for the first time. That was because the second respondent and third respondent (who was recovering from a miscarriage) had gone on holiday to Bali with their young family.
The above email might be characterised as heavy handed or blunt, but it is no more than an assessment of a situation as seen by the fourth respondent, in her capacity as operations manager of the first respondent, as a consequence of her not being paid, which she appears to have assumed, rightly or wrongly, is as a consequence of some error in the processing of the payroll. Indeed, the email acknowledges that the fourth respondent’s own errors were rectified by the applicant, and the fourth respondent goes on to invite the applicant to comment on the issues that are raised. The above email appears to the Court to be nothing but a robust, and perhaps misguided, endeavour to raise and deal with an issue, which may or may not have been an issue. It does not, however, rise to anywhere near the level of being abusive, bullying, harassing or involving a malicious and false allegation. There is clearly an indication that payroll services may be outsourced, but it is not apparent what affect, if any, any outsourcing of the payroll as might have been envisaged by the fourth respondent, would impact upon the applicant, and if so how, if at all.
The applicant responded to the invitation to comment by sending an email just over an hour later to the fourth respondent, copied to the second and third respondents, and to the external accountants: Annexure 52 to Applicant’s 19 July 2010 Affidavit. That email was in the following terms:
Hi Alex
Pays are paid by Derek on a Wednesday of the pay week and there has been no change to the procedure till date. I can confirm that Derek has made payment to ALL staff, yourself included, yesterday, Wednesday 31/03/10.
If you have not received the payment it could be a problem with your bank, please check.
As for staff hours, I should not have to check the hours you provide as I used to with junior staff like Danae. With the repeated clear explanations and shortcuts training you must be able to provide accurate staff hours record which is nothing but a simple record of staff presence or absence at work, their type of leave and OT if any. However, with the record you provided and even after the telephone discussion we had on Tuesday, 30/03/10, staff hours were still vague and I verified re-did all the staff hours for all studios.
If you send me accurate staff attendance record on Monday of the pay week, I will be able to process the pays on Tuesday and send to Derek for payment on Wednesday. I should not have to check the staff attendance record prepared by the Operations Manager and should be able [to] process the pays as per the procedure above.
Staff have been paid on time guaranteed every time till date. So please do not create a confusion among staff.
As for standby,
- Derek will be provided with a staff payroll template which will be in his possession to make payment on pay date in case I’m absent to process the payroll
- the template will be updated according to staff and roster changes which you need to advise me when they happen
Thank you
Regards
Nandita
It is significant in the context of the current proceedings that the applicant did not raise issues of bullying, harassment or malicious and false allegations when she responded.
Less than an hour later the fourth respondent responded by email: Annexure 53 to Applicant’s 19 July 2010 Affidavit, to the applicant, with a copy to the second respondent, as follows:
Nandita
Thank you for your response.
I have done one payroll once since I came here and it was a simple misunderstanding regarding the reference point – Possibly goes to your abilities as a trainer? Having never used shortcuts before and having spent a mere few hours with you to apparently enable me to immediately act as OM for a National Company I find your response, lack of support and repeated attacks on me callous, unprofessional and utterly disrespectful to the Directors.
You expose the Directors to considerable risk when behaving like this in the workplace.
Please can I ask you to exercise a little patience and understanding for your co-workers, including me, in future.
Regards
Alexandra McClunie
Manager - Operations
The applicant asserts that this email is evidence of harassment, bullying, abuse and the making of a malicious and false allegation. In the Court’s view, whilst the email expresses, very strongly, a point of view about the applicant’s response, support and interaction with the fourth respondent, it does so in the context of a plea for more patience and understanding to be exercised by the applicant in respect of the fourth respondent (amongst others) in the first respondent’s workplace. The response also has to be put into its proper context. The fourth respondent had been in a newly created role of operations manager for the first respondent for a little over three weeks. It was her first payroll. The applicant had been providing services to the first respondent for more than three years. The fourth respondent had had limited training on Shortcuts with the applicant, and had evidently misunderstood a relevant part of that training. Whether or not the fourth respondent was properly trained is impossible to discern on the evidence. What the Court did observe, and finds to be the case, is that the applicant took the view that the fourth respondent was the operations manager, and once trained (for a relatively short time) required no further assistance from the applicant. On the evidence, the applicant’s approach was not a practical one, and the fourth respondent’s strongly vented views, and request that the applicant “exercise a little patience”, are entirely understandable. Having seen the applicant give evidence, and present in Court, over the course of 11 days of hearing, it is fair to observe that she was often impatient and ill-tempered in her approach to the Court and to the respondents’ witnesses. On the whole of the evidence, there is no reason to believe that, at least after the fourth respondent’s appointment to a position with some authority over the applicant, the applicant’s approach was any different in the first respondent’s workplace.
At the time the second respondent, in Bali, read the above exchange of emails he thought that the operations manager, the fourth respondent, had made an observation in that capacity as to how things could be done better, that that was her opinion, and that there was nothing for him to comment on. As he put it: “I was on holidays and it didn’t greatly matter to me.”: Transcript, 1 September 2011, page 132.
The applicant endeavoured to call the second respondent a number of times in the afternoon and evening of 31 March 2010 and the morning and early afternoon of 1 April 2010. The second and third respondents, together with their young family, had gone for a holiday in Bali following the third respondent having had a miscarriage. It would be a fair characterisation of the evidence to say that the second and third respondents were more concerned with their family situation at this time than their business situation, and the purpose of the holiday in Bali was to assist the third respondent, in particular, to overcome the effects of her miscarriage. There was limited contact between the applicant and the second and third respondents until they returned from Bali on 10 April 2010.
In the circumstances, the applicant’s allegation that the 1 April 2010 email set out above is evidence of harassment, bullying, abuse and the making of a malicious and false allegation is not made out.

The payroll standby arrangement

On 5 April 2010 the fourth respondent sent to the applicant an email in the following terms:
Hi Nandita
When you return to work from your Easter break can you go through your emails from me and catch up on responses please.
Can I get the weekly reports when you’re ready – I realise we didn’t get any last week as it was a short week but we need to get into a routine during this time of rebuilding and make sure we monitor our financial activity closely and regularly.
Can you also please leave a key to your office for me to pick up on Wednesday in Subiaco. If you can leave it with Anastasia in an envelope that would be appreciated. We have had a tech in over Easter and couldn’t get to the PC you use. The laptop with exchange on it has been assigned to the tech so you and I’ll have to share the one in your room when I am in Subiaco.
When Debra and Derek come back I would like to put some time aside so you can teach Derek and I payroll. I will download a QB demo model for them so we (Derek and I) can go through it beforehand.
Hope you have a lovely Easter.
Alex
Annexure 56 to Applicant’s 19 July 2010 Affidavit (“First 5 April 2010 Email”).
The First 5 April 2010 Email is said by the applicant to be bullying, harassment and sabotage. There is no evidence which supports these contentions by the applicant. Indeed, the very process of ensuring that there was a standby arrangement if the applicant was absent was one that was suggested by her in her email of 1 April 2010 to the fourth respondent: see para.43 above. Nor is there anything in the content or tone of the First 5 April 2010 Email which could be considered to be bullying, harassment or sabotage. Rather, and this is consistent with the evidence of the fourth respondent, a standby arrangement required others to be taught how to do the payroll. Further, the fourth respondent was not cross-examined on the content of the First 5 April 2010 Email.
The applicant’s approach to this issue was rooted in her perception that she had a right to exclusively perform all of the first respondent’s accountancy and bookkeeping services on an outsourced basis. That was reflected in her evidence that if she were unavailable, and for example ill, it would be a breach of the Service Contract for someone else to perform the payroll services that she performed under the Service Contract. As the Court has found, the applicant’s understanding of the provision of services under the Service Contract does not accord with its terms. It was always open to the first respondent to make other arrangements with respect to how payroll services were provided, and by whom they were provided. The terms of the Service Contract were such that the applicant was obliged to do such work as was provided to her on a fully outsourced basis, but had no right to do all of the first respondent’s accountancy and bookkeeping work, or to determine what aspects of that work she was required to perform, either at all, or at any time.
In any event, the First 5 April 2010 Email is nothing more than the making of a sensible arrangement to minimise any business risk associated with the payroll, and to ensure that there was a proper standby arrangement. No more than that can be read into the terms of the First 5 April 2010 Email, and the Court finds that the applicant’s assertion that it was bullying, harassment and sabotage is not made out.

The request for a key to the applicant’s Subiaco office

On 31 March 2010 the third respondent emailed the applicant: Annexure 57 to the Applicant’s 19 July 2010 Affidavit, concerning “secure financial info” and said as follows:
Hi Nandita, In light of us getting new IT people and Alex and Jamie now possibly others having Global Passwords can you please ensure maybe with the assistance of Peter the [sic – that] all of our private financial information is kept in a secure place that cannot be accessed by anyone other than yourself Derek and I.
Thank you,
Debra Best
Principal/Technical Adviser
The applicant lived in Subiaco. The first respondent’s office was also in Subiaco, together with a studio. During this period of time, that is March-April 2010, the first respondent was in the process of finalising the move of its corporate office to new premises at Wangara. This did not, however, affect the fact that the applicant was, and continued, to have a small office in the Subiaco studio. In the office set aside for the applicant at the first respondent’s Subiaco studio was a computer, provided by the first respondent. A request to the applicant from the fourth respondent (initially), for a key to that office, and access to the computer that she used in that office, in the Subiaco studio, was not complied with by the applicant.
The First 5 April 2010 Email was sent at 10.32am. At 6.03pm the same day, 5 April 2010, the fourth respondent sent a further email to the applicant, with a copy to the second respondent: Annexure 58 to Applicant’s 19 July 2010 Affidavit (“Second 5 April 2010 Email”). The Second 5 April 2010 Email reads as follows:
Nandita
I just put the following in Enterprise Manager and whole thing crashed – I can’t find an online manager or manual so it has been a lot of trial and error More error than anything else and we have to leave it for now.
Please – in the spirit of cooperation can we do this without the malicious jibes – can you have a look and if necessary clean up what there is to reflect the following;
…
Please would you leave the Enterprise Manager manual at the front in Subiaco on Wednesday for me with the keys to your office as per my previous email. I can’t find one at Wangara so I assume yours is the only one.
Alex
Notwithstanding various emails concerning leaving keys to enable access to the applicant’s computer room at the Subiaco premises of the first respondent, it would appear that the applicant did not readily relinquish the key: see 7 April 2010 emails from the fourth respondent to the applicant and to Anastasia Lucas, being part of Annexure 58 to Applicant’s 19 July 2010 Affidavit, and further email of 7 April 2010 from the second respondent to the applicant, being Annexure 59 to the Applicant’s 19 July 2010 Affidavit.
The above emails of 31 March 2010, the Second 5 April 2010 Email and the 7 April 2010 emails are said by the applicant to be evidence of sabotage and bullying. A reading of these emails leads to the obvious conclusion that there was a request by the fourth respondent, and then the second respondent (a director of the business), that the applicant give access to the first respondent’s computer in the first respondent’s room used by the applicant in the first respondent’s premises at the Subiaco studio, so that access could be given to computer technicians to enable system improvements to better secure certain financial information, including the second and third respondents private financial information. The requests, with respect to the keys, are made in proper and not unpleasant terms, and do not constitute bullying or sabotage. There was simply no cogent evidence, and no cogent reason given, as to why the applicant resisted perfectly reasonable requests, and in particular, requests emanating from the third and second respondents, who were the directors of the first respondent, and the owners of the business.
These emails do not constitute evidence of bullying or sabotage.

The re-direction of mail

On 24 March 2010 the fourth respondent had copied the applicant in on an email to various staff of the first respondent concerning the redirection of mail: Annexure 60 to Applicant’s 19 July 2010 Affidavit. That email was in the following terms:
Hi Everyone
Mail is to be redirected to Wangara – this will take a few days to come into effect but should be active no longer than the end of next week.
Please ensure if anyone asks for our address for any purpose that the address is this one – this is for correspondence, accounts everything other than couriers which are destination specific.
Subi girls please give any mail you are holding to Deb tomorrow.
Wangara girls – I will catch up with you before the redirection becomes active to explain the procedure for logging and distributing mail.
Thanks .. nearly home time!
J
Alexandra McClunie – Manager – Operations
Just over half an hour after the above email was sent the fourth respondent sent a further email to the applicant, with copies to the second and third respondents. The email was in the following terms:
Hi Nandita
With the new mailing system there will be a new way of processing invoices before they get to you;
- all the mail will come here and be logged for Derek to go through.
- he will authorise the invoices for payment and we will leave them at Subiaco for you every Thursday.
Derek forgot to mention how we make payments (whether you do this or he does) so I will tie that lose end with him when he is next in the office. If you normally make the transfers I guess nothing changes. If he does them he will do them all on one day from a schedule that we will then send to you to confirm payment has been made.
Hopefully this cuts out some of the less necessary aspect of your job and helps you a long a little getting back into the swing of things with your normal workload.
Alex
Alexandra McClunie
Manager – Operations
Annexure 61 to Applicant’s 19 July 2010 Affidavit.
The applicant characterises the above emails as evidence of harassment and bullying, and of alleged conspiracy to sabotage and cause injury to the applicant. On a plain reading they are no such thing. Rather, they are unremarkable directions with respect to the redirection of mail, and new arrangements for the authorisation and payment of invoices, consequent upon the first respondent’s corporate office being shifted to Wangara. The evidence does not support, or even suggest, that there was any intention on the part of the first respondent, or the second, third or fourth respondents, to the effect suggested by the applicant’s claims. Indeed, the evidence established that appropriate arrangements were being put in place by the first respondent, mainly through the auspices and efforts of the fourth respondent, to ensure that the applicant could continue to provide various accountancy and bookkeeping services from her Subiaco home, and from the Subiaco studio containing a small dedicated office for the applicant, as had occurred in the past. Once again, the applicant’s claims in this regard are entirely fanciful, and are not made out on the evidence.
There was a situation whereby a number of invoices were apparently lost, it would appear as a consequence of the transfer of post office boxes from Subiaco to Wangara. In the Court’s view nothing turns on the fact of their being lost, or their being found, for they were subsequently provided to the applicant to process in the normal way (allowing for the fact that they had been delayed because they had been lost).

The handing over of operational issues

On 30 March 2010 the applicant had written to the third respondent by email as follows:
Hi Deb
As discussed, I have checked the programs price list in Enterprise Manager and updated where necessary as you needed it urgently. Any further changes and making the left staff inactive need to be done by Alex as I am passing on all operations tasks including Shortcuts and Enterprise Manager tasks to her as of 30/03/10. Please advise Alex accordingly.
Thank you
Regards
Nandita
At 12.02am on 31 March 2010 the third respondent responded to the applicant’s email above under the subject line “Operations tasks as of 30/03/10” as follows:
Hi Nandita, Alex was advised verbally on friday and in writing this morning. So all should work out nicely, please advise if any different.
Sent from my iPhone
Cheers
deb
On 6 April 2010 it would appear that the applicant received the First and Second 5 April 2010 Emails, and as a consequence sent the following email to the second and third respondents, copied to the first respondent’s external accountant, but not sent to the fourth respondent:
Deb, Derek
Please read Alex’ email below which I received today. I have handed over all my operations tasks on 30/03/10 and I need to carry on with my other long pending bookkeeping tasks. Please see Deb’s email below. Please provide Alex the necessary training.
Thanks
Nandita
The reference to “Deb’s email below” is a reference to the 12.02am 31 March 2010 email set out above. The above three emails appear at Annexure 65 to the Applicant’s 19 July 2010 Affidavit.
The second respondent, still on holiday with the third respondent, who was recuperating from a miscarriage, sent the following email to the applicant at 4.11pm on 6 April 2010:
Nandita,
Again I ask that you only communicate with me and leave Deb out of all correspondence.
You are clearly the best person to assist with this type of training and I ask that simple requests are attended to on request. Alex needs your assistance and to be given whatever is required for her to take over the workload you have currently been attending to. You being resistant to help when requested is costing the company unnecessary downtime and strain.
Nandita please cooperate and assist Alex to do her job so that you can then do your job. I hope this is crystal clear and you will treat any request from Alex as URGENT and do what is best for the Company in these times.
Please attend to the Enterprise request today and also reply to any outstanding emails from Alex as an urgent matter. Again I trust these instructions are clear.
thank you
Kind regards,
Derek Best
Director
Annexure 66 to the Applicant’s 19 July 2010 Affidavit.
The applicant alleges that the above three emails constitute duress.
Duress in relation to a contract involves the illegitimate application of pressure likely and intended to have the effect of denying the exercise of a person’s free-will. Illegitimate pressure may include unlawful threats, unconscionable pressure, and, in relevant circumstances, lawful conduct.
See Maritime Union of Australia & Ors v Geraldton Port Authority & Ors (1999) 165 ALR 67 at 125 per Nicholson J; [1999] FCA 899 at para.367 per Nicholson J; Balding v Ten Talents Pty Ltd (2007) 162 IR 17 at 27 per Lucev FM; [2007] FMCA 145 at paras.33-34 per Lucev FM; NC Seddon and MP Ellinghaus, Cheshire and Fifoot’s Law of Contract (9^th Australian Edition) (Chatswood: LexisNexis Butterworths, 2008) page 714 (“Cheshire and Fifoot”).
The allegation that the above three emails constitute duress is in the context of the applicant’s handover, or what she asserts was the handover, of operational tasks. In an email sent on 29 March 2010: Annexure 45 to Applicant’s 19 July 2010 Affidavit, the third respondent indicated to the applicant that the “immediate preference is for you to focus only on accounts and bookkeeping” and that it was “important for you to pass on all of your additional operational tasks to Alex as soon as possible”. It is then said that:
If for whatever reason Alex is enable [sic – unable] to complete and requires additional training you will advise me urgently. As agreed this will be actioned in completion by this Tuesday 30 the of March 2010.
The email goes on to indicate to the applicant that any performance issues are not to be dealt with her by directly but to be passed on to the second or fourth respondents.
The applicant asserts that the third respondent’s 29 March 2010 email constitutes part of an “agreement” that she would only provide accountancy and bookkeeping services after 30 March 2010. And, therefore, that she did not have to provide training services in relation to the accountancy and bookkeeping services after 30 March 2010. In the Court’s view this is to read too much into the third respondent’s 29 March 2010 email. What that email seeks to do is set in place a plan of action to deal with the issue of training in relation to accountancy and bookkeeping services for the fourth respondent. The 29 March 2010 email plainly contemplates the possibility that the fourth respondent might require further training. In any event, training in relation to the services provided by the applicant was required so as to enable the operations manager, the fourth respondent, and the owners of the business, the second and third respondents, to be conversant with those aspects of the running of the business. That is particularly so when it was conceded in cross-examination that the fourth respondent had not received a full handover from the applicant in relation to those matters it was intended to transfer from the applicant to the fourth respondent (or others employed by the first respondent).
In the Court’s view what the 29 March 2010 email sought to do so was to put in place a plan by 30 March 2010 to ensure that there was an appropriate handover of additional and operational tasks, and that if that was not able to be completed and required additional training that the applicant would advise the third respondent accordingly. It was not an agreement that the applicant would do nothing by way of further training of the fourth respondent after 30 March 2010.
The evidence indicates that, at that point in time, the applicant had charged for all work performed by her under the Service Contract, and that that work included administration work related to the provision of bookkeeping and accounting services. In that regard the Court accepts the evidence of the second respondent, a director of the business, that the work performed by the applicant was related to the provision of the bookkeeping and accountancy services: see Transcript, 30 August 2011 at pages 158-159; Transcript, 1 September 2011 at pages 77 and 118-119. Further, the applicant understood that it was to her advantage that the fourth respondent understand how the various systems worked, and that it would take some little time before the fourth respondent would be able to operate them properly, practically and without error: Transcript 24 February 2011 at pages 26-29.
It is in the above context that on 6 April 2010 the second respondent, on holiday with his young family and recuperating wife, requests that the applicant provide the assistance as set out in his 6 April 2010 email. That email was written against a background of there not being a full handover between the applicant and the fourth respondent: Transcript, 24 February 2011 at page 24. In the context of what had occurred up to 30 March 2010, and bearing in mind that Easter fell from Friday 2 April 2010 to Monday 5 April 2010, the second respondent’s 6 April 2010 email, is not evidence of duress. Nor was it, in the context of the way in which the applicant had provided services under the Service Contract to that time, a breach of that contract. The services that she was being asked to provide were related to the bookkeeping and accounting services for the reasons set out in the second respondent’s evidence.
Having regard to the above matters, the Court is of the view that the applicant has not established that these issues constituted duress as alleged. There is simply no basis for asserting that whatever pressure was put on the applicant in relation to issues of handover and training, was illegitimate. In the context of what was occurring it was nothing more than what was required for the proper ongoing operation of the first respondent’s business.

The contracts issue

On 31 March 2010 there were exchanges of emails between the applicant and the fourth respondent, most of which were copied to the second respondent. The fourth respondent observed that employment contracts were being issued in the name of the first respondent but separation certificates were being issued in a different corporate name, and she queried which entity was the correct employer. The applicant responded concerning the particular employee’s contract. The fourth respondent responded to that information as follows:
Okay thanks Nandita
I am at Subi so don’t have copies of anything hence the question.
The applicant responded advising the fourth respondent that:
I have emailed all the contracts to you
The above response was sent late on the afternoon of 31 March 2010. At 9.35am on 1 April 2010 the fourth respondent emailed the applicant in the following terms:
Dear Nandita
Please STOP sending self-serving emails like this. It is inflammatory and totally beneath a woman of your level of professionalism to engage in this ridiculous game of ‘point scoring’.
All I am asking is a little support from you in my early days without the nasty barbs and the supercilious comments.
Kind regards
The above emails are part of Annexure 69 to the Applicant’s 19 July 2010 Affidavit.
The applicant asserts that the fourth respondent’s 1 April 2010 email is evidence of abuse such as to justify repudiation of the Service Contract.
Prior to the fourth respondent sending the 1 April 2010 email there had been other interactions between the fourth respondent and the applicant in relation to the provision of the applicant’s Service Contract which, although relatively minor, had caused some difficulties for the fourth respondent. It is also apparent from the evidence overall that the fourth respondent did not consider that she was receiving all necessary assistance, cooperation and proper training (in relation to tasks that she was required to be trained to subsequently undertake) from the applicant. Against that general background of a relationship, which although in its early stages was seemingly difficult from the fourth respondent’s point of view, the applicant’s response to the fourth respondent’s 31 March 2010 email indicating that she was at the Subiaco studio and did not have copies of the relevant contract, and that was why she was asking the question concerning the correct entity, elicited a response which, although accurate, was obviously perceived as being unhelpful, hence the fourth respondent’s 1 April 2010 email.
The 1 April 2010 email has to be understood in the context of events which preceded it. The 1 April 2010 email can be characterised as, first, a request to stop sending what are perceived to be self-serving emails; second, an explanation of why the applicant ought to stop sending such perceived self-serving emails; and third, a plea for support without condition or comment.
In the Court’s view the email of 1 April 2010 is not bullying, harassing or abusive. Understood, in its context, it is a robust response and request to what had previously occurred, and a plea for future support. Even if it were abusive, bullying or harassing, which it is not in the Court’s view, it does not constitute repudiation of the Service Contract, particularly in circumstances where it pleads for future support, as that indicates an intention that there be an ongoing contractual relationship between the applicant and the first respondent.

The end of day complaint

At 9.12pm on 6 April 2010 the fourth respondent sent the applicant an email concerning “Complaint Re End of Day” in the following terms:
Hello Nandita
Please do not bail up the receptionists in the middle of a busy floor and demand they pay attention to your accounts queries when the studio is active – it’s humiliating and demeaning for your target. In particular do not discuss the financial dealings of Innovative or what you see as staff errors out the front at reception when the studio is open. Please email me if you wish to set time aside to discuss such matters. This was the arrangement from the outset that I would deal with those things.
The discrepancy from the other day (the over $64 that I asked Anastasia to put aside in the safe in an envelope with my name on it to remind me) was for me to deal with when I am in Subiaco next. Innovative will not go broke if it waits for an end of day reconciliation and particularly not whilst I am still waiting on so much data from you that makes a bigger difference to the wellbeing of the business. However in this case it was entirely my mistake for not advising you of this to prevent today’s incident. Given that you are ignoring my emails it is unlikely you would be aware of this before you attacked Anastasia in any case Nandita I will NOT allow you to interact with the staff on such a caustic and beligerent level – they aren’t accountants and there have been so many system errors recently I am not convinced anyone is personally responsible.
I simply cannot afford to lose any of them or have complaints like this of bullying and public humiliation when we are working so hard to stabilise things. You put the directors at risk of well grounded legal actions for bullying and harassment because you simply refuse to act in a cordial and professional manner. It would be so much more helpful if you assisted staff to identify their errors rather than abuse them. Legally it is a breach of my moral and legal duty of care to employees and the Directors if I do not acknowledge this and address it, especially given the attacks you have levelled at me I have to give the allegations credence.
Anastasia and I will sort out the end of day from today when I get to Subiaco as today there was a system error that has returned an overbalance of $10,000 or more. I will check the log and sort it out as soon as I can. Having done a 14 hour day I won’t be doing it tonight.
We agreed this kind of thing was supposed to come to me first please respect that.
Alex
Annexure 70 to Applicant’s 19 July 2010 Affidavit (“6 April 2010 End of Day Email”).

The next morning (7 April 2010) the fourth respondent sent an email to Anastasia Lucas and the second respondent copied to the applicant as follows:
Hi Anastasia
Please call me at Wangara when you are ready and we will go through yesterday’s end of day and try to f[i]nd the glitch.
I can only apologise for yesterday and the situation you were put in.
Nandita – in future please refer ALL queries to me first and I will liaise with the staff.
Regards
Alex
Annexure 75 to Applicant’s 19 July 2010 Affidavit.
The 6 April 2010 End of Day Email is said by the applicant to be abusive and a malicious and false allegation. The applicant contends that the incident at the Subiaco studio was nothing more than “an exchange of pleasantries”: Applicant’s 19 July 2010 Affidavit at para.47.
The 6 April 2010 End of Day Email has to be understood in the context of what the fourth respondent says she was told by Anastasia: namely, that the applicant had “just taken … [Anastasia’s] head off at reception in front of a client” in relation to a $64 anomaly, and that the applicant would not accept that it was a system error rather than a receptionist error, and that the whole matter was argued out in front of a client: affidavit of Alexandra McClunie, sworn 22 November 2010, para.27. There was no objection to Ms McClunie’s evidence in this regard, and, significantly, she was not cross-examined in relation to what she says she was told by Anastasia. Thus, even if Anastasia’s account of the event is incorrect, there is no dispute that the fourth respondent had had conveyed to her the account of events which she sets out in her affidavit and upon which she was not cross-examined. In those circumstances it is not appropriate to describe the fourth respondent’s email as a “malicious and false allegation”. Further, it is not, in the Court’s view an abusive email. Given the account of events relayed to the fourth respondent by Anastasia the 6 April 2010 End of Day Email from the fourth respondent to the applicant can be characterised as a, albeit very strongly worded, direction to the applicant as to how to deal with issues involving staff performance, and to conduct herself in the studio in front of clients. In the Court’s view the 6 April 2010 End of Day Email, whilst, once again, being direct, and even blunt, in its content and tone, is not abusive, and does not contain a false and malicious allegation.

7 and 8 April 2010

The applicant worked on 7 April 2010 including depositing the takings and responding to queries from the first respondent’s external accountants. She was doing this as late as the afternoon of 8 April 2010: see Annexure 78 to Applicant’s 19 July 2010 Affidavit.
In the evening of 7 April 2010 the fourth respondent sent an email to the applicant, and the second respondent, with the subject heading “End of Day – Resolution to Anomalies” in the following terms:
Nandita
There is a problem with end of day as the system isn’t registering entries or the transactions are dropping off after they are complete – this could be human error or system error. I will be looking into it and resolving tomorrow.
Please do not go to Subiaco for the rest of the week to collect end of day. We will be implementing new procedures for this and we will advise by the end of the week.
Thanks
Alex
Annexure 77 to Applicant’s 19 July 2010 Affidavit.
The direction not to attend the Subiaco studio for the rest of the week does not constitute a repudiation of the Service Contract. It was nothing more than an intermediate step to assist in the resolution of the computer system problems which were being experienced by the first respondent.
Overall, the Court has also considered the effect of the abovementioned emails, and the other interactions between the parties revealed by the evidence, and taking all those matter into consideration, does not find any basis justifying the assertion that the first respondent had repudiated the Service Contract.

Acceptance of alleged repudiation of Service Contract

On 9 April 2010 solicitors for the applicant forwarded a letter addressed to the second respondent as a director of the first respondent in the following terms:
We act for Nandita Naroth and S & R Naroth (ABN 46 878 211 013).
We are instructed by our clients that:
1.By Service Contract dated 19 March 2009 between Innovative Hair Loss Solutions Pty Ltd (Company) and Nandita Ragini Naroth of S & R Naroth (ABN 46 878 211 013) the parties agreed that for a period of 3 years from 19 March 2009 Ms Naroth of S & R Naroth would provide fully outsourced accounting and bookkeeping services to the Company and its associated entities (Contract);
2.It was an implied term of the Contract that there was a duty of trust and confidence between the Company and our clients.
3.The Company owes a duty under sections 23D, 19, and 22 of the Occupational Safety and Health Act 1981 (WA) (Act), and at common law, to provide our client with a safe workplace being free from hazards that may result in harm to health.
4.Over the period March 2010 to date Ms Naroth, and thereby S & R Naroth, has been the subject of a number of false, harassing, intimidatory, and defamatory allegations by the Company (through Alexandra McClunie) which have caused our client undue stress and anxiety. Those allegations have been made primarily in emails forwarded by Ms McClunie to our client and copied to you. You have taken no action to have those allegations withdrawn or taken any action against Ms McClunie in relation to her conduct. Even if the allegations were not made on behalf of the Company your conduct in not acting in the manner suggested to prevent or ameliorate the situation has meant that the Company has vicariously adopted those allegations for itself. (Our clients also rely upon your emails to our clients sent on 26 March 2010 at 7.26pm and 6 April 2010 at 4.11pm).
5.The allegations have come as a complete surprise to our clients and despite many occasions on which you and your wife, a principal of the Company, have praised our clients’ efforts.
6.The allegations have been made at a time when the Company and its associated entities have been restructured and reorganised. Ms McClunie was only appointed Operations Manager on 8 March 2010 and since then she has also arranged, with your agreement, that the previous IT providers to the Company, Mates Rates, be replaced by her husband. It appears that the sudden and surprising conduct of the Company towards our clients comes as part of the restructuring of the business that the Company has earlier decided on.
7.Despite the restructuring and reorganisation of the Company and its associated entities, the Company and its associated entities have, despite our clients’ earlier advice, not paid superannuation to the massage therapists engaged. As our clients earlier advised, despite the massage therapists being engaged as “contractors” they are likely to be considered “employees” for the purposes of the superannuation legislation.
The Company’s conduct towards our clients amounts to a breach of the implied term referred to above, the provisions of the Act and a repudiation of its obligations under the Contract. Our clients hereby accept that repudiation and bring the Contract to an end. On our client’s instructions, the Company’s conduct has amounted to a “constructive” termination of our clients’ services under the Contract. In addition to bringing the Contract to an end, our client requires the following from the Company:
8.Payment of 2 months fees (around approximately $15,000 plus GST) being the fees that our clients would be entitled to if the Contract had been properly terminated by the Company under clause 5;
9.Our clients’ fees for the period 8 April 2010. Our clients’ invoice is enclosed;
10.Damages for breach of contract.
Our clients have delivered to our office late this afternoon the keys and documents identified on the attached document. We shall have those things delivered to Mr Reegan Buswell of Lawrence Business Management on behalf of the Company on Monday.
Our clients will have all the hard copy files of the Company that our clients currently retain and various other documents (which will be described in the letter enclosing the documents) delivered to Lawrence Business Management on Monday, 12 April 2010.
We are also instructed to write separately to Ms McClunie and you concerning the false and defamatory allegations made of and concerning our clients.
We are also instructed to request that you and employees of the Company take no action to contact our clients. Instead any communication should be made through this office.
Despite our clients’ business relationship with the Company coming to an end our clients are willing, subject to the conditions described below, to attend to the completion of:
(a)a bank reconciliation to 31 March 2010 for the Company and its associated entities but not the personal accounts of you and Debra Best. (Our client cannot complete the bank reconciliation to 31 March 2010 without bank statements for the period 19 March 2010 onwards);
(b)a clearing account reconciliation for cash for the period to 31 March 2010 for the three studios.
The conditions on which our clients are willing to perform those tasks are:
1.The Company agrees to pay the amounts identified in paragraphs 8 and 9 above within 7 days of the conditions being agreed.
2.Our clients have access to the Company’s computer at the offices of Lawrence Business Management, and such information and reasonable assistance as required.
3.The Company agrees to pay our clients the cost of completing the work at the rate of $55 per hour plus GST within 7 days of presentation of an invoice by our clients.
Our clients estimate that there is approximately 25-35 hours work in completing the tasks described above and our clients would do so within 14 days of the conditions being agreed with the Company.
Our clients may also be willing to complete sundry tasks (such as answering the final queries of Lawrence Business Management in respect of the 2009 financial accounts of the Company and its associated entities) by arrangement.
Our clients reserve all their rights.
Annexure 79 to Applicant’s 19 July 2010 Affidavit (“Talbot and Olivier Letter”).
The question arises as to whether or not the conduct alleged constitutes a repudiation of the Service Contract.
Repudiation consists of a manifestation of unwillingness or inability to perform a contract, in substance or at all, before or at the time the performance is due: Cheshire and Fifoot, page 1013. The repudiation of a contract “is a serious matter and is not to be lightly found”: Shevill & Anor v The Builders Licensing Board (1982) 149 CLR 620 at 633-634 per Wilson J. Factors relevant to whether or not a breach of contract by repudiation occurs include:
a)conduct by a party evincing an intention no longer to be bound by the contract, or to fulfil it in a manner substantially inconsistent with the parties’ contractual obligations;
b)whilst a substantively inessential term might manifest repudiation, the importance of the term in question is a relevant factor, as breach of an insignificant term is less likely to show a repudiator intention than breach of a significant term;
c)it is the effect of the alleged repudiatory conduct not its intent that is had regard to;
d)words or conduct indicating an unwillingness to perform can constitute repudiation, but if there was no clear renunciation of the contract, or if there had been ongoing genuine attempts to perform, or cure a breach, there may be no repudiation; and
e)insistence on a particular interpretation of the contract, which has given rise to a dispute, may not constitute repudiation, even if contentious, where the terms of the contract are ambiguous, and an honest belief in an incorrect interpretation may not constitute repudiation, unless the allegedly repudiating party is acting so as to pursue its own interests or in a manner which is unreasonable.
Chesire & Fifoot, pages 1013-1016, and cases there cited.
A court may also take into account the fact that contracts involving performance over a period of time involve adjustments for reasons of commercial convenience or necessity, without any formal variation of the contract: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395 at 419 per Finn and Sundberg JJ; [2006] FCAFC 40 at para.103 per Finn and Sundberg JJ.
There is no doubt that the applicant considered that she had been treated harshly, particularly by the fourth respondent. For reasons set out above, the Court does not consider that the treatment of the applicant, by the fourth respondent, or by the first, second and third respondents, during the period from the time of the appointment of the fourth respondent to the time of the alleged repudiation being accepted, was harsh. The conduct now complained of, mainly manifested in the emails set out above, but also in other conduct complained of by the applicant which has been considered by the Court, at no stage evinces an objectively inferred intention by the first respondent to repudiate the Service Contract, or conduct which goes to the root of the contract so as to evince an intention to terminate. Obviously, different systems were being put in place as a consequence of the appointment of the fourth respondent as operations manager. The first respondent, and its officers, were entitled to take those steps. Likewise with respect to the requested training. These were all manifestations of the performance over a period of time of a contract which for reasons of commercial convenience and necessity had involved, and continued to involve, necessary adjustments. In any event, it is clear from the evidence, particularly that of the third respondent, that there was no intention on the part of the first respondent to repudiate the Service Contract. The third respondent’s evidence, in particular, acknowledged that there had been some concerns about the applicant’s performance of the Service Contract, particularly in relation to her interaction with the first respondent’s staff, but acknowledged that the applicant had particular data entry and bookkeeping skills, consistent with the nature and the services to be provided under the Service Contract, which the first respondent wished to continue utilising in the future. The Court has not ignored the applicant’s evidence about her responses, and the effects on her health which she said arose from the respondents’ conduct. But the medical evidence did not support any causative link between her illness and the respondents’ conduct, and the Court considers that the applicant’s reaction to the respondents conduct was, like much of her conduct in Court, bordering on the histrionic.
The applicant has, on the evidence, failed to establish any breach of either common law or statutory duties in relation to safety justifying repudiation of the Service Contract, whether or not the terms of the OSH Act are to be implied into the Service Contract, which the Court has found not to be the case. Likewise, insofar as there may have been a statutory common law duty for the principal to provide a safe working environment for its contractor, that duty was not breached by the conduct of the first respondent, or any of its officers, being the second, third or fourth respondents, by reason of the conduct alleged by the applicant.
In all of the above circumstances, the applicant has failed to make out her claim that the first respondent repudiated the Service Contract.

Claims for breach of clauses 2.1 and 2.2 of the Service Contract

The claims for breach of clauses 2.1 and 2.2 of the Service Contract are not made out for reasons discussed in more detail below: see paras.114, 123 and 124 below.

The claim in relation to invoice 78

Pursuant to an invoice for services rendered for the period 29 March 2010 to 8 April 2010: Annexure 84 to Applicant’s 19 July 2010 Affidavit, the applicant claims a sum of $2,253.63 (inclusive of GST) for services rendered for the period 29 March 2010 to 8 April 2010. Although invoice 78 is an invoice from the business of S & R Naroth, and not the applicant in her individual capacity, which is the capacity in which she has sued, and the invoice is not directed to any of the respondents, including the first respondent who is party to the Service Contract, but rather to another company related to the first respondent, these points were not taken at hearing, and the matter was argued as if invoice 78 was from the applicant to the first respondent, and the Court proposes to deal with the matter accordingly.
The first respondent says that invoice 78 is only a general description of work performed by the applicant during this period and that there is no evidence of the reasonableness of the charge that she has raised. The Court observes that the first respondent had regularly paid on invoices bearing such descriptions in the past: Exhibit 1, and that the reasonableness of the rate is not in issue: clause 3.1 of the Service Contract prescribes the rate of $55 per hour.
The first respondent says that there is then only evidence that the applicant performed the following tasks:
a)collection of end of day receipts on 6 April 2010;
b)banking on 7 April 2010; and
c)the preparation of payroll to enable staff to be paid on 31 March (which must have occurred on 30 March),
but says that there is no specification of hours for those tasks. Again, the Court observes, that in the past the applicant had been paid on invoices without a breakdown of tasks relevant to the quantum of hours required to perform those tasks: Exhibit 1.
A quick overview of the evidence, together with the evidence concerning the average daily hours normally worked by the applicant providing services for the first respondent, shows that the claim can be made out. The evidence established that the applicant worked six days a week for an average of 5.25 hours a day on the tasks required (including what was said to be the non-booking and accounting tasks) by the first respondent: Annexure A24 to Applicant’s 19 July 2010 Affidavit. Allowing for the Easter break there were seven working days during the period of 29 March to 8 April 2010 claimed for under invoice 78. At an average of 5.25 hours a day that equates to 36.75 hours, using the average as the daily multiplier. In that context a claim for 37.25 hours, or over a seven day period half an hour more than what is said to be the average (or just over four minutes per day longer than the average), is reasonably consistent with the evidence of the applicant’s hours worked.
On 30 March 2010 at 4.01am the applicant responded to an overnight email from the third respondent: Annexure 46 to Applicant’s 19 July 2010 Affidavit. During the course of the day she undertook, and there appears to be no dispute about this, activities associated with the preparation of the payroll for the next day’s staff pays. This included going through various queries with respect to staff hours, which included consideration of issues associated with rosters, travel hours and leave: Annexure 49 to Applicant’s 19 July 2010 Affidavit. There were also calls to the second and third respondents at various times from mid to late afternoon: Annexure A54 to Applicant’s 19 July 2010 Affidavit. At 4.12pm a summary of studios and staff sales for the first respondent from 1-27 March 2010 was sent to the second, third and fourth respondents: Annexure A68 to Applicant’s 19 July 2010 Affidavit. At 11.24pm the applicant emailed the third respondent with respect to her having checked the programme’s price list in Enterprise Manager and having updated it where necessary as it was required urgently: Annexure 63 to Applicant’s 19 July 2010 Affidavit.

On 31 March 2010 it would appear that the applicant was primarily involved in payroll issues, and again there does not appear to be any dispute about this. The applicant was also engaged for a period of time in the mid-afternoon in responding to the fourth respondent’s questions concerning employee contracts: Annexure 69 to Applicant’s 19 July 2010 Affidavit.
On 1 April 2010 there were various emails to and from the second, third and fourth respondents in relation to the payroll issues, which would have occupied most of the morning, together with at least two calls to the second respondent during the morning. See Annexures 51, 52, 53 and 54 to Applicant’s 19 July 2010 Affidavit.
On 6 April 2010 the applicant was required to deal with the First and Second 5 April 2010 Emails from the fourth respondent: Annexure 58 to Applicant’s 19 July 2010 Affidavit. There was also an email concerning a bundle of invoices which had been found which were to be delivered to the applicant the next day (that is 7 April 2010): Annexure A62 to the Applicant’s 19 July 2010 Affidavit. The applicant also appears to have produced or updated the studio and staff sales figures for March 2010 and sent those to herself during the course of the morning: Annexure A68 to Applicant’s 19 July 2010 Affidavit.
On 7 April 2010 the applicant would have been dealing with the end of day issue from 6 April 2010, and was asked to report on the anomaly which gave rise to that issue: Annexure 67 to Applicant’s 19 July 2010 Affidavit. She would also have been involved in processing the pile of invoices which had been re-discovered: Annexures 62 and 70 to Applicant’s 19 July 2010 Affidavit.
On 8 April 2010 there does not appear to be any dispute that the applicant was involved in assisting the first respondent’s external accountant.
Overall, the impression that the Court obtains from the above review of the evidence, together with the evidence as it emerged at hearing, is that the period from 30 March 2010 to 9 April 2010 was an especially busy one, and in that respect there appears nothing untoward about the applicant’s claimed hours worked in invoice 78, particularly when regard is had to the average hours normally worked in the provision of services to the first respondent by the applicant.
In the above circumstances, the Court has come to the conclusion that the claim for work performed under invoice 78 has been made out. In the circumstances, the applicant is entitled to the sum claimed of $2,253.63 for services rendered in the period 29 March to 8 April 2010.

Alleged misleading and deceptive conduct

The relevant principles applicable to a claim of misleading and deceptive conduct under s.52 of the TP Act were discussed by Toohey J in James v Australia and New Zealand Banking Group Ltd Bank (1986) 64 ALR 347 at 372-373 (“James”):
(1) A corporation may be in contravention of s 52, whatever its intention or the state of mind of those controlling it: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977) 140 CLR 216; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981) 149 CLR 191; 42 ALR 1.
(2) The mere fact that representations as to future conduct or events do not come to pass does not make them misleading or deceptive: Bill Acceptance Corporation Ltd v GWA Ltd (1983) 50 ALR 242.
(3) Nevertheless, a statement relating to the future may contain an implied statement as to present or past fact. It may represent impliedly that the promisor has a present intention to make good the promise and it may represent impliedly that he has the means to do so: Thompson v Mastertouch TV Services Pty Ltd (1977) 15 ALR 487.
(4) A statement involving the state of mind of the maker of the statement, eg promises, predictions and opinions, ordinarily conveys the meaning that the maker of the statement had a particular state of mind when the statement was made and that there was basis for that state of mind. If the meaning contained in or conveyed by the statement is false in that or in any other respect, there will have been a contravention of s 52: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25; Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1984) 58 ALR 549.
The applicant claims that there was misleading and deceptive conduct in that she was induced to enter the Service Contract in reliance on a promise that she would be relieved of non-bookkeeping services because the first respondent intended to employ a suitable person to undertake those tasks and remove them from the applicant, but that this was not done, and that from April 2009 the applicant provided her services in a managerial and non-bookkeeping capacity at no additional cost to the first respondent. The applicant says that she would not have entered the Service Contract if she had not been misled by the promise of an appointment of a senior person to relieve her of the non-bookkeeping tasks.
The applicant alleges that she has lost income and an opportunity to develop her bookkeeping and accountancy services business by reason of the misleading and deceptive conduct.
The respondents say that the claim is inherently incredible and inconsistent with the evidence.
The applicant also claimed that during this period any requirement to perform tasks other than bookkeeping and accountancy services was a breach of her contract. No such claim was however made during the currency of the Service Contract. Indeed, throughout the currency of the Service Contract from the time that a former manager, Mr Runden left in late 2008 to the time that the fourth respondent was appointed operations manager in early March 2010, the applicant charged the first respondent at her usual hourly rate for the services so provided. Despite the assertion: Transcript, 23 February 2011 at pages 95-106, that throughout this period there was an ongoing breach of the Service Contract by the first respondent requiring the applicant to undertake non-bookkeeping services, the applicant did not assert a breach of contract. Indeed, she did not raise the matter until the Talbot and Olivier Letter. The evidence is entirely consistent with a consensual variation of the Service Contract to include the provision of non-bookkeeping services to the first respondent by the applicant throughout the period from early 2009 until the time of the alleged repudiation. There were no doubt efforts being made, as evidenced by the list of bookkeeping and non-bookkeeping tasks prepared in September 2009: see Annexure A24 to the Applicant’s 19 July 2010 Affidavit, to find solutions to what was perceived to be a problem with respect to the applicant undertaking non-bookkeeping tasks. But throughout the period there was no objection by the applicant to undertaking those tasks: Transcript 23 February 2011 at pages 139-140 and 150. As the applicant observed in final submissions “…the person who…actually did those tasks was me. That’s how it was”: Transcript 27 September 2011 at page 22. Consequently, the assertion made in submissions that clause 2.1 of the Service Contract was breached by conduct misleading, deceiving and coercing the applicant into providing services outside the scope of the Service Contract is not made out, either in contract or under s.52 of the TP Act.
The Court also considers that if there was a representation of the kind alleged by the applicant, and said to give rise to the claim of misleading and deceptive conduct, it was not a representation which was misleading and deceptive. There was sufficient evidence to establish that the first respondent endeavoured to find solutions to the problem (see the previous paragraph), and appoint a person or persons to a variety of senior positions (including national call centre coordinator) which might have alleviated the load with respect to the applicant’s non-bookkeeping tasks. Those efforts culminated in the appointment of the fourth respondent in early March 2010. On the evidence of the second and third respondents, which the Court accepts, steps were taken to deal with this issue, and insofar as any representation was made to the applicant in early 2009 it was not misleading. The fact that it did not come to pass was a consequence of a combination of factors, including the inability to find and recruit a suitable person or persons.
Even if there had been a misleading or deceptive representation of the kind now asserted by the applicant, the applicant’s claim has a fundamental difficulty, in that there is no evidence that she suffered any loss or damage. The applicant provided those services to the first respondent and was remunerated for them: Applicant’s 19 July 2010 Affidavit, para.19, and there is no evidence, or no evidence with sufficient probative value, that she would have obtained remuneration over and above that provided under the Service Contract. There is also no, or no sufficient evidence, that the applicant, or the partnership of which she was a part, would necessarily have obtained, or were being offered, other work, either per se, or which would have resulted in remuneration greater than the approximately $95,000 to $100,000 a year that the applicant was earning through the Service Contract. Ultimately, there is no evidence of any loss, or of any other opportunity which might have resulted in loss, which was forgone by the applicant, as a result of the alleged misleading or deceptive conduct. The applicant conceded that this was the case during her final submissions: Transcript 27 September 2011 at pages 10 and 48. Finally, to the extent that it might be relevant, there was not sufficient or reliable evidence, in the absence of harassment (which accords with the findings of the Court) which causatively linked the applicant’s medical conditions to the conduct of any of the respondents: Transcript 29 August 2010 at page 24.
In all of the circumstances, the applicant has not made out the claim of misleading and deceptive conduct under s.52 of the TP Act.

Alleged unconscionable conduct

The applicant claims that the respondents acted unconscionably because, in breach of the Service Contract, they unilaterally changed their accounts address from Subiaco to Wangara, and that further, they coerced the applicant into providing training and non-bookkeeping services, and threatened to take away the applicant’s core bookkeeping services.
The applicant’s claim for unconscionable conduct appears to have the following elements:
a)that there was an obligation or duty on the first respondent to negotiate with the applicant concerning the first respondent’s planned move of its corporate offices to Wangara, and that they failed to do so, wrongfully and in breach of the Service Contract; and
b)wrongfully and in breach of the Service Contract, the first respondent unilaterally changed its accounts address from Subiaco to Wangara.
It is also argued that the second, third and fourth respondents coerced the applicant to provide training and non-bookkeeping services. And that there were threats to take the applicant’s core bookkeeping services away from her.
The respondents say that the allegations are not supported by any evidence.
There is nothing in the evidence which suggests that the applicant falls within any of the traditional special disadvantage test categories which would warrant relief for unconscionability, insofar as that test is imported into the provisions of s.51AC of the TP Act. The concept of unconscionable conduct in s.51AC of the TP Act is, however, wider than the ordinary meaning under established principles of common law and equity, and involves notions of serious misconduct, or something clearly unfair or unreasonable, showing no regard for conscience, and irreconcilable with what is right or reasonable, and involving an element of moral judgment as to default or responsibility, and ordinarily requiring a deliberate, that is, an intentional, or at least a reckless act: Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] ATPR 42-290 at 40,882-40,883 per Gordon J; [2009] FCA 682 at para.17 per Gordon J, following the judgment of Foster J in Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No. 2) [2009] FCA 17 at para.113 per Foster J. Section 51AC of the TP Act is not intended to be a catch-all applicable to all inappropriate business practices, but rather only to that conduct which can properly be characterised as unconscionable: Australian Competition and Consumer Commission v 4WD Systems Pty Ltd & Ors (2003) 200 ALR 491 at 546 per Selway J; [2003] FCA 850 at para.188 per Selway J.
For the reasons set out above in relation to the issue of repudiation the applicant’s claims generally with respect to unconscionable conduct under s.51AC of the TP Act cannot be made out. With respect to the specific issues which are raised there was no obligation at all on the first respondent, or the second, third and fourth respondents, to negotiate any plan to move the corporate office to Wangara with the applicant. Indeed, the first respondent, in the course of moving appears to have complied with clause 2.2 of the Service Contract which required that the applicant have remote and direct access to the accounts department at the Subiaco studio in Station Street, and that the studio also be the venue for all accounts meetings. Furthermore, on the evidence, it is plain that the first respondent was prepared to facilitate access to the accounts department at the Subiaco studio so as to allow the applicant to provide the relevant services. For this reason also the alleged breach of clause 2.2 of the Service Contract is not made out.
Finally, even if there was a duty to negotiate the plan to move from Subiaco to Wangara, and that in breach of the Service Contract there was a unilateral change of the accounts address from Subiaco to Wangara, there is no evidence to support the causing of any loss by reason of that breach to the applicant. There is no evidence that she would not have continued to obtain 5.25 hours work a day, on average, for six days a week, once the corporate office moved to Wangara.
There is, for reasons otherwise set out above, no evidence that the applicant was coerced into providing training and non-bookkeeping services. The provision of training was, for reasons also set out above, a relevant part of the Service Contract, at least until the date of the alleged repudiation, and there was nothing which would constitute coercion on the evidence in relation to the applicant’s provision of these services, or any non-bookkeeping services.
Also, as discussed above, the issue with respect to the possible outsourcing of the payroll was a reaction to particular events, and even if it was inappropriate, it does not constitute unconscionable conduct for the purposes of s.51AC of the TP Act. That said, in the Court’s view there was nothing inappropriate about the first respondent or fourth respondent’s approach with respect to the issue of possible outsourcing of payroll services.
None of the conduct of the respondents rises to the level of unconscionability, and even if it did, there is no evidence of damage to the applicant. In all of the above circumstances, the claim with respect to unconscionable conduct under s.51AC of the TP Act has not been made out.

Counterclaim

The first respondent counterclaims for a breach of contract by the applicant for failure to pay the termination fee prescribed by clause 5.1 of the Service Contract.
In circumstances where the allegation of a repudiation by the first respondent has not been made out, it follows that the applicant’s failure to provide services on and after 9 April 2010 constituted a breach of the Service Contract, of a fundamental kind, in that the contract was terminated by the applicant’s non-performance.
That conduct constituting a termination of the Service Contract by the applicant gives rise to an obligation on the part of the applicant under clause 5.1 of the Service Contract to pay an amount equivalent to two months’ services billing fee to the first respondent.
The Service Contract was terminated on 9 April 2010 by the applicant. Two months from that date is 9 June 2010. That is a period of eight weeks plus two additional working days (Monday 8 June and Tuesday 9 June 2010). On the basis of the evidence the average time worked by the applicant for each week was six days at 5.25 hours a day, or 31.5 hours a week. That equates to 252 hours for the eight weeks. To that must be added a further 10.5 hours for the additional two days, bringing the total to 262.5 hours. At the agreed contractual rate of $55 an hour that equates to $14,437.50. That is the sum for which judgment ought to be given on the counterclaim to the first respondent against the applicant, as the counterclaim has been made out.

Application in a case

There are two applications in a case which are outstanding, and which require determination.
The first was filed by the applicant on 4 February 2011, seeking orders that by reason of the respondents’ non-compliance with the Court’s orders of 23 November 2010 that the applicant not suffer prejudice or disadvantage in the proceedings and hearing listed for 21, 23, 24 and 25 February 2011, plus costs.
Those orders required the further extension of time for the filing of documents by the respondents following earlier non-compliance with orders of the Court. There is, however, no evidence that the non-compliance has resulted in the applicant suffering prejudice or disadvantage at hearing. Not only did the applicant file voluminous points of claim, affidavits and submissions prior to hearing, the hearing also extended over a further seven days of hearing in addition to the February 2011 hearings, those further seven days being in August and September 2011. There is no evidence that the applicant suffered any prejudice or disadvantage as a result of the non-compliance with orders for filing documents by particular times, but in any event, given the length of the hearing, and the conduct of it (including frequent adjournments during the hearing at the applicant’s request for short periods, and one longer adjournment of almost a day) it cannot be said that the respondent suffered prejudice or disadvantage which was not cured by the hearing and the conduct of the hearing. The application in a case filed 4 February 2011 will therefore be dismissed.
The second application in a case filed by the applicant on 25 July 2011 sought various orders with respect to the disclosure of documents relating to the evidence of Dr Peter McCarthy, an expert for the respondents, and the ability to file and serve affidavits in reply. That matter was dealt with by way of orders made on 2 August 2011 by this Court, and otherwise in the course of the hearing of the matter, and does not require to be further addressed.
The applicant’s application in a case filed 25 July 2011 originally sought orders against both the respondents and their lawyers, Messrs Metaxas and Hager, for non-compliance with various orders of the Court. As with the previous application in a case it is not evident that there has been any prejudice or loss suffered by the applicant in relation to the non-compliance by the respondents, and that any such non-compliance was in any event cured by what occurred at the hearing. The only exception to that may be with respect to the costs of various directions hearings in relation to the non-compliance. That, however, goes to costs which will be the subject of separate orders by the Court with respect to the filing of submissions and a further hearing as to costs. Those matters can be dealt with as part of the Court’s consideration of costs. It follows therefore, that the applicant’s application in a case filed 25 July 2011 must be dismissed.

Conclusions and Orders

The Court has concluded that:
a)the applicant is entitled to judgment in the sum of $2,253.63 (plus interest) on her claim for monies due but not paid under invoice 78 rendered on 9 April 2010, but otherwise the applicant’s claim is dismissed;
b)the first respondent is entitled to judgment on its counterclaim in the sum of $14,437.50 (plus interest); and
c)the applicant’s applications in a case filed 4 February 2011 and 25 July 2011 be dismissed.

Interest will be at the rate of 6% per annum both pre and post judgment: Federal Magistrates Act 1999 (Cth), ss.76 and 77.

Costs

With respect to costs, the Court has determined that it is appropriate to hear further from the parties with respect to costs once the parties have had an opportunity to digest these Reasons for Judgment. For that reason there will be orders requiring the parties to file and serve written submissions with respect to costs, and costs schedules, before a short hearing on costs listed for not before 11.00am on 17 May 2013.

I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of Lucev FM

Date: 28 March 2013