Re: Team Employment & Training Network P/L

The Supreme Court of Queensland was asked to decide a dispute between Team Employment & Training Network Pty Ltd and the Commonwealth of Australia regarding the payment of a portion of monies under a contract. The contract was made on 20 December 1996 between the applicant and the Commonwealth in connection with the provision of labour market programme services to the Commonwealth. The applicant's obligation was to provide 20 weeks work experience and training placements for 56 participants referred to it by the Commonwealth. The broker fee applicable to the contract was up to $140,000, of which 75 per cent had been paid. The dispute concerned the remaining 25 per cent ($35,000).

The legal issue before the court was whether the applicant was entitled to payment of the remaining 25 per cent of the broker fee. The applicant claimed that 23 out of 29 people (79.31%) fitted the criteria in the contract, thereby entitling it to payment of the remaining 25 per cent of the broker fee. The Commonwealth contended that the relevant outcome was 23 out of 52 (44.2%) which did not reach the required 60 per cent for payment of the remaining 25 per cent of the broker fee. The argument turned on what was meant by para.G of the agreement.

The court held that the concept embodied in para.G was that the final 25 per cent of the broker fee was payable only if 60 per cent of those who undertook a placement gained employment for an additional 4 weeks after it was finished. The court rejected the applicant's argument that para.G should be read as envisaging a situation where the words "after the completion of their placements" required account to be taken of the fact that a number of people failed to complete the period of the placement, and that the baseline for deciding whether the target of 60 per cent of participants had been employed for at least 4 weeks was the number of people remaining in the scheme at the end of the 20 week period. The court also held that the contract did not impose an obligation on the Commonwealth to replace people who dropped out of the scheme.

The court concluded that the key declaration, that upon the proper construction of paragraph G of the agreement the applicant was entitled to be paid the agreed brokerage fee, having achieved the target outcome of at least 60% in respect of participants who completed the programme referred to in the agreement, could not be granted. The summons was dismissed with costs to be taxed.