Robinson v BMF Pty Ltd (in liq) (No 2)
[2022] FCA 1191
•7 October 2022.
FEDERAL COURT OF AUSTRALIA
Robinson v BMF Pty Ltd (in liq) (No 2) [2022] FCA 1191
File number(s): VID 798 of 2020 Judgment of: MORTIMER J Date of judgment: 7 October 2022. Catchwords: INDUSTRIAL LAW – employment – identity of employer – whether corporation named in employment contract was applicant’s employer – whether written contract of employment had any features of a sham transaction – both respondent corporation and putative employer in liquidation – primary and accessorial liability of second respondent as director of both corporations – where second respondent ceased to be a director of putative employer corporation during applicant’s employment – causes of action in contract and equity – statutory causes of action under Fair Work Act 2009 (Cth) and Competition and Consumer Act 2010 (Cth) – application dismissed
PRACTICE AND PROCEDURE – interlocutory application after close of evidence for leave to amend statement of claim to identify a non-party as the applicant’s employer –where the applicant had not availed himself of earlier opportunities to make that amendment – consideration of prejudice to the respondents – interlocutory application dismissed
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law), ss 2, 18, 31, 236-239, 248
Fair Work Act 2009 (Cth) ss 44(1), 90, 117, 323, 340, 341, 342, 500(2), 550
Cases cited: 133 Walsh Street Pty Ltd v BMF Pty Ltd [2020] VSC 650
Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878
BCR20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCA 1043
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2017] FCA 1091
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 96 ALJR 89
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50
Coote v Mainline Access Pty Ltd & Anor (No 3) [2019] FCCA 383; 344 FLR 1
EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134; 360 ALR 261
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833
Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176; 198 FCR 174
Golden Plains Fodder Australia Pty Ltd v Millard [2007] SASC 391; 99 SASR 461
Gothard, in the matter of AFG Pty Limited (Receivers and Managers appointed) (in liq) v Davey [2010] FCA 1163; 80 ACSR 56
Hill v Zuda Pty Ltd [2022] HCA 21; 96 ALJR 540
In the matter of C&T Grinter Transport Services Pty Ltd (In Liquidation) & Grinter Transport Pty Ltd (In Liquidation) (Controller Appointed) [2004] FCA 1148
JMC Pty Limited v Commissioner of Taxation [2022] FCA 750
McCardle v Johnson (No 2) [2022] FCA 168
Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19
Murphy v Chapple [2022] FCAFC 165
Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908
Pitcher v Langford (1991) 23 NSWLR 142
Robinson v BMF Pty Ltd (in liq) [2021] FCA 1064
Rumble v The Partnership (T/as HWL EbsworthLawyers) [2020] FCAFC 37; 275 FCR 423
Tamu v World Vision Australia [2021] FCA 333
Textile Footwear & Clothing Union of Australia v Bellechic Pty Ltd [1998] FCA 1465
WorkPac Pty Ltd v Rossato [2021] HCA 23; 271 CLR 456
Yorke v Lucas [1985] HCA 65; 158 CLR 661
ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; 96 ALJR 144
Allsop CJ, “Piercing the Corporate Veil: Recent International Developments” (Paper presented to the 38th Annual Conference of the Banking & Financial Services Law Association, 26 August 2022)
Division: Fair Work Division Registry: Victoria National Practice Area: Employment and Industrial Relations Number of paragraphs: 271 Date of last submission/s: 3 June 2022 Date of hearing: 9-10 March, 24 May 2022 Solicitor for the Applicant: Barlett Workplace Lawyers Counsel for the Second Respondent: Mr R A Millar Solicitor for the Second Respondent: HWL Ebsworth ORDERS
VID 798 of 2020 BETWEEN: JEFFREY ROBINSON
Applicant
AND: B.M.F. PTY LTD (ACN 005 112 103)
First Respondent
IAN WRIGHT
Second Respondent
ORDER MADE BY:
MORTIMER J
DATE OF ORDER:
7 OCTOBER 2022
THE COURT ORDERS THAT:
1.The application be dismissed.
2.On or before 4pm on 21 October 2022, the second respondent file and serve any submissions he wishes to make on the costs of the unsuccessful interlocutory application made by the applicant on 4 May 2022.
3.On or before 4pm on 4 November 2022, the applicant file and serve any submissions in response.
4.Subject to further order, the question of the costs of the interlocutory application be dealt with on the papers.
5.The parties otherwise bear their own costs of the proceeding.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MORTIMER J:
The applicant, Jeffrey Robinson, worked with the second respondent, Ian Wright, between March 2017 and approximately May 2020, or November 2020, depending on which view of the facts is taken. Mr Robinson worked under the title of General Manager, BMF Construction. BMF Construction was a business name. Its business was operated by Mr Wright through one or more corporate vehicles, including a corporation called BMF Pty Ltd, which on Mr Wright’s evidence was a corporation of which he had been a director since 1975 or, possibly, since the mid-1980s.
Mr Wright described the business of BMF Construction as:
the construction of buildings on land owned or leased by clients of BMF, or by myself or other corporate entities in which I held an interest.
The proceeding concerns the cessation of Mr Robinson’s employment. A major issue in the proceeding is who was Mr Robinson’s employer at the relevant times. Mr Robinson contends his employer was BMF. Mr Wright contends it was another corporation, Brandmet Pty Ltd. For reasons that I explain below, the identity of the employer affects the prospects of success of the causes of action, and the failure by Mr Robinson to join Brandmet in a timely way meant the trial also proceeded differently to the way it would have proceeded if Brandmet had been joined.
Mr Robinson makes claims under the Fair Work Act 2009 (Cth) and the Australian Consumer Law, as found in Schedule 2 to the Competition and Consumer Act 2010 (Cth), as well as claims in contract and equity. For the reasons set out below, Mr Robinson’s application must be dismissed.
BRIEF PROCEDURAL HISTORY
In accordance with Mr Robinson’s views of the legal situation, the proceeding was commenced in December 2020 against BMF as Mr Robinson’s employer, and therefore as the entity with principal liability. Mr Wright was, and is, alleged to have accessorial liability under s 550 of the FWA in respect of the alleged contraventions of that Act. Pecuniary penalties under the FWA were sought against both respondents. The ACL claims were made directly against Mr Wright as well as BMF, and in the alternative against Mr Wright as a person ‘involved’ in those contraventions, in the sense given to the word ‘involved’ under s 2 of the ACL. The claims in contract were against BMF. The claims in equity were, possibly, against both BMF and Mr Wright.
On 2 February 2021, BMF was placed in liquidation. Pursuant to s 500(2) of the Corporations Act 2001 (Cth), the proceeding was therefore stayed as against BMF. BMF’s liquidators formed the view that there were insufficient funds to defend Mr Robinson’s claims or pay Mr Robinson on the relief he seeks. For the reasons given in Robinson v BMF Pty Ltd (in liq) [2021] FCA 1064, the Court refused Mr Robinson’s application for leave to proceed against BMF under s 500 of the Corporations Act. Shortly after the Court’s decision, in September 2021, orders were made to list the proceeding for a trial of three days, commencing Tuesday 8 March 2022.
On the Friday before the hearing was scheduled to commence, Mr Robinson applied to vacate the trial hearing because of the unexpected unavailability of his counsel. Mr Robinson sought to have the proceeding referred to a mediation to be held on Wednesday 9 and Thursday 10 March 2022. Given the delays likely in trying to find suitable alternative dates, and the fact the proceeding had taken longer than usual to come to trial in any event, the Court determined that the trial hearing would be postponed for one day and be limited to questions of liability, so that its estimated duration could be reduced to two days. The proceeding was then referred to a mediation to be conducted by 31 March 2022. The reasons for this ruling were published to the parties on Sunday 6 March 2022. The hearing of evidence and opening submissions regarding liability was conducted on Wednesday 9 and Thursday 10 March 2022.
Due to the unavailability of counsel who had been briefed in the matter, and the difficulties in securing replacement counsel at short notice, Mr Robinson was represented at the hearing by Glen Bartlett, his solicitor. Mr Bartlett had the assistance in court of a legal clerk from his firm. It was clear that Mr Bartlett knew his client’s case well, and was familiar with the evidence to be tendered.
The opening submissions included an exchange between the Court and Mr Bartlett in which he indicated that it was now intended to submit, in the alternative, that Mr Wright (as an individual) was Mr Robinson’s employer, despite that position not forming part of Mr Robinson’s case as it had been pleaded. As recounted in Robinson at [5]-[7], since at least February 2021 Mr Robinson had been aware of Mr Wright’s position in the proceeding, pleaded in his defence, that BMF had not been Mr Robinson’s employer and that Brandmet was his employer. It was plain this was an issue of fundamental importance to the proceeding. Nevertheless, Mr Robinson did not seek to reformulate his case to deal with the possibility that the Court would agree with Mr Wright on this issue. Orders made in February 2021 expressly to permit an amendment to Mr Robinson’s originating application and pleadings in relation to the joinder, removal or substitution of any respondents were allowed to expire without any application to amend, nor any application for joinder, being filed. In opening, Mr Bartlett accepted there was no pleading that Mr Wright as an individual was Mr Robinson’s employer. He appeared to accept an amendment would be required. He embraced the suggestion that if the evidence supported it, this contention would form part of his client’s final submissions. Responsively, counsel for Mr Wright accepted in opening that there would need to be an amendment application, and indicated Mr Wright would resist any such application.
After the hearing, and closing of the evidence, and ahead of a scheduled subsequent oral hearing for final submissions, Mr Robinson filed an application for leave to amend his statement of claim, principally to deal with the issue of the identity of his employer. That application was made on 4 May 2022, almost two months after the trial. Mr Wright resisted this application.
The proceeding was listed for a case management hearing on 12 May 2022. Mr Bartlett explained that the proposed amendments made allegations about further representations said to have been made by Mr Wright and BMF, allegations that Mr Wright was Mr Robinson’s employer or joint employer, an allegation that Mr Wright had induced BMF to breach a contract with Mr Robinson, and other allegations advanced in the alternative that the Court were to find Brandmet to have been Mr Robinson’s employer. On 13 May 2022, the Court ordered that the application to amend the statement of claim be dismissed, with reasons to be given in the Court’s final decision about liability. The proceeding continued to a hearing of final submissions about liability on 24 May 2022, with supplementary written submissions being finalised on 3 June 2022. The reasons for the Court’s decision to dismiss Mr Robinson’s application for leave to amend his statement of claim are found at [16]-[29], below.
THE EVIDENCE
The parties relied on affidavits from their principal witnesses, Mr Robinson and Mr Wright. Mr Robinson also read and relied upon affidavits from Mr Bartlett. There was a considerable amount of documentary material which was collected into a Court Book. A number of documents were tendered as exhibits during the hearing. After the hearing, the parties were given the opportunity to reflect on what documents they intended, and needed, to rely upon, and were invited to inform the Court of any documents in the digital version of the Court Book upon which they did not propose to ask the Court to rely. This process was designed to avoid any duplication in the evidence before the Court, and to ensure the parties focussed their attention on what they relied upon to prove their respective cases. It was also designed to ensure the hearing process was fair in particular to the applicant, who had experienced some difficulties with the unavailability of his counsel for the evidentiary part of the hearing. The parties cooperated in this process and produced an index to the Court Book indicating what they continued to rely upon, and what they did not. The amended Court Book was then marked as an exhibit. The Court has made its findings and reached its conclusions based on the evidence as reflected in the amended Court Book as submitted by the parties.
Both Mr Robinson and Mr Wright were cross-examined. Harry Fung, a man whose role looms large in the events relevant to this proceeding, was not called as a witness by either party. Nor were any of the other people who worked for Brandmet or BMF Construction called as witnesses, despite several such people being mentioned in the documentary evidence, some relatively prominently.
THE APPLICANT’S INTERLOCUTORY APPLICATION DATED 4 MAY 2022
As I noted above, on 4 May 2022, Mr Robinson filed an interlocutory application seeking leave to file an amended statement of claim. This was accompanied by a supporting affidavit of Mr Bartlett, affirmed 3 May 2022, containing the amended statement of claim.
On 12 May 2022, I convened a case management hearing. At the hearing, counsel for Mr Wright indicated that his client opposed the interlocutory application. The parties made oral submissions on the merits of the interlocutory application at that hearing. Subsequently (on 12 May 2022), Mr Robinson sent by email to Chambers further written submissions in support of the interlocutory application.. Mr Wright also submitted a short document, with transcript references, on which he sought to rely. At the hearing, and in the interests of the timely resolution of the proceedings given the delays to this point, I indicated that a decision would be made on the interlocutory application, with reasons for that decision being published in the final judgment in the proceeding. The parties were content with that course. Orders were made on 13 May 2022. At [16]-[29] below, I set out my reasons for those orders.
In my opinion, Mr Robinson was given ample opportunity to propose amendments to raise alternative contentions about who was his employer, and he failed to avail himself of those opportunities. The most obvious opportunity was given very early on in the process, after Mr Wright’s defence had squarely put the identity of Mr Robinson’s employer in issue. No action was taken, and as I have noted above, the Court’s orders permitting amendment and joinder were allowed to expire. Then, in opening at trial, Mr Bartlett foreshadowed alternative contentions, but made no application during or even at the end of the trial for leave to amend. Instead, an application was made almost two months later. By this time, the evidence had closed, and the parties were about to make final submissions. The proceeding had been on foot by this stage for approximately 18 months.
I accept that a key question in the exercise of discretionary powers such as the granting or withholding to a party of leave to amend their pleadings is generally whether, without the amendments, the Court is able to deal with the real issues between the parties. That is one of the Court’s core functions; to ensure it deals as comprehensively as it can with the real issues of law and fact that give rise to the dispute between the parties. Against this however a number of other considerations need to be balanced. This is one of those circumstances where those other considerations support a refusal of leave to amend.
The Court’s orders permitting amendment and joinder were made on 8 February 2021. Those orders were extended twice, until 20 April 2021, when the amendment orders were vacated without any opposition from Mr Robinson.
The evidence given at trial made it clear it was Mr Robinson’s lawyer at the time of the contract (in March 2017) who inserted Brandmet as the employer into the written employment contract. He did that after a series of communications with Mr Robinson about which entity should be identified as the employer, and he did so on Mr Robinson’s instructions. These facts were known to Mr Robinson at all material times. He deposed to them in his affidavit of 21 June 2021. They were therefore also known to Mr Robinson’s counsel and solicitors in this proceeding. The application to amend did not arise from any new evidence, previously unknown to Mr Robinson and his lawyers, nor to any evidence originating from Mr Wright.
On 2 June 2021, shortly before his affidavit was filed, Mr Robinson was given a further opportunity to amend his case, by orders made on that day. No amendments to the statement of claim were proposed. Instead, Mr Robinson pressed an interlocutory application for leave to proceed against BMF despite it being in liquidation, because BMF was the entity he continued to allege was his employer.
Some of this procedural history was set out in the Court’s reasons for refusing leave to proceed against BMF, at [4]-[5]. Those reasons were published on 3 September 2021. Mr Robinson was on notice of the Court’s views about the way he had chosen to conduct the proceeding, and the forensic choices he had made. This was approximately six months before the trial was listed to commence.
To state the obvious, there would have been considerable prejudice in allowing the amendments to the statement of claim two months after the evidence had closed. The thrust of the proposed amendments was to put two alternative cases about the identity of the employer – first, that it was Brandmet (as Mr Wright’s defence contended); and, second, that it was Mr Wright as an individual. From this, Mr Robinson sought to then add a number of contentions about what flowed from these propositions, including the accessorial liability of Mr Wright for the conduct of Brandmet. That is because Brandmet had also, by this stage, been placed in liquidation. Counsel for Mr Robinson put it this way:
MR O’NEILL: No, your Honour. It really goes to the misleading and deceptive conduct issue and the estoppel issue. It doesn’t go to any contractual issue. Well, sorry, perhaps I’ve overstated that, but that’s the primary purpose of it, but it’s also – when I read it again, it’s to support a submission on the contractual issue that the representation being made that – one way we put our case, is that Brandmet was a mere pay agent, if you like, of either Mr Wright or BMF and that allegation also supports that way of putting our case.
There were also entirely new causes of action pleaded, such as the tort of interference with contractual relations. Counsel accepted those allegations were new, although he submitted such representations were:
understood to have been made and contested, and so I can’t explain to your Honour why they weren’t put in the way they now are in the original pleading, but, in my submission, they’ve always been on the table.
In reply, counsel for Mr Robinson accepted that some of the amendments would require joinder of Brandmet, at a time after the trial and the substantive close of evidence. He submitted the issues had in a practical sense been “thoroughly canvassed” at trial, and there was no unfairness.
Counsel also accepted that some of the proposed pleadings made specific allegations against Mr Wright, which had not been put directly to him in cross-examination – such as the allegation that he deliberately placed Brandmet in liquidation to avoid any liabilities to Mr Robinson. Further, the allegation that Mr Wright was the employer, or joint employer, of Mr Robinson was a matter counsel accepted had not been put to Mr Wright.
These matters gave rise in my view to significant unfairness, and prejudice, to Mr Wright. There was no proposal on behalf of Mr Robinson that leave be granted to re-open the evidence, nor that the trial should re-commence. Rather, counsel for Mr Robinson sought to proceed on the evidence as it was, and the written submissions as they were. This introduced significant forensic unfairness to Mr Wright, whose evidence and contentions were adduced and made to meet the case as pleaded against him. Since the primary allegations in this proceeding arise under the FWA, the starting position was that the terms of s 570 of the FWA applied and each party would bear its own costs of the proceeding. The disproportion between the costs and delays in this proceeding on the one hand, and the relatively narrow compass of issues on the other, was increasing.
Another unfairness, and prejudice, was the extent to which the new allegations drew further into the forensic contest the role of Harry Fung. Mr Fung was not a party to the proceeding. However, he was the person to whom Mr Wright sold his shares in Brandmet. At the time Mr Robinson’s employment ceased, Mr Fung was the sole director and shareholder of Brandmet. Indeed, it was Mr Fung who stood Mr Robinson down in May 2020. It was Mr Fung who directed Mr Robinson to return to work, which Mr Robinson refused to do. Drawing Brandmet into the proceeding would likely draw Mr Fung into the proceeding in a substantive way. Yet there was no evidence he had been served with the application, or was even aware that his interests might be affected by this proceeding.
In my opinion, this application for amendment (and, inevitably, joinder) was made too late, and was likely to cause significant prejudice and unfairness to Mr Wright. It was also likely to result in the trial essentially having to be conducted again. Although, belatedly, Mr Robinson sought to make alternative cases about who was his employer, he had ample opportunity to do this at a far earlier stage, when put on notice of Mr Wright’s expressly pleaded position. He consciously elected not to do so, and in the circumstances of this proceeding he should be bound by those choices.
For those reasons, Mr Robinson’s interlocutory application was refused.
APPLICABLE LEGISLATION
Mr Robinson’s claims under the ACL relate to allegedly misleading or deceptive conduct in trade or commence and allegedly misleading representations in relation to employment.
Section 18 of the ACL provides that:
18 Misleading or deceptive conduct
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2)Nothing in Part 3‑1 (which is about unfair practices) limits by implication subsection (1).
Note:For rules relating to representations as to the country of origin of goods, see Part 5‑3.
Section 31 of the ACL provides that:
31 Misleading conduct relating to employment
A person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to:
(a)the availability, nature, terms or conditions of the employment; or
(b)any other matter relating to the employment.
Note:A pecuniary penalty may be imposed for a contravention of this section.
Mr Robinson’s claims under the FWA relate to alleged adverse action said to have been taken against him because he exercised a workplace right under the FWA, alleged failures to pay Mr Robinson’s annual leave entitlements, alleged failures to pay Mr Robinson for work he was said to have performed and an alleged failure give Mr Robinson proper notice of his termination as required by the FWA.
Relevantly in relation to Mr Robinson’s adverse action claims, s 340 of the FWA provides:
340Protection
(1)A person must not take adverse action against another person:
(a)because the other person:
(i)has a workplace right; or
(ii)has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)to prevent the exercise of a workplace right by the other person.
Note:This subsection is a civil remedy provision (see Part 4‑1).
(2)A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.
Note:This subsection is a civil remedy provision (see Part 4‑1).
The meaning of ‘workplace right’ is given in s 341 of the FWA:
Meaning of workplace right
(1)A person has a workplace right if the person:
(a)is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b)is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c)is able to make a complaint or inquiry:
(i)to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee—in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2)Each of the following is a process or proceedings under a workplace law or workplace instrument:
(a)a conference conducted or hearing held by the FWC;
(b)court proceedings under a workplace law or workplace instrument;
(c)protected industrial action;
(d)a protected action ballot;
(e)making, varying or terminating an enterprise agreement;
(f)appointing, or terminating the appointment of, a bargaining representative;
(g)making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;
(h)agreeing to cash out paid annual leave or paid personal/carer’s leave;
(i)making a request under Division 4 of Part 2‑2 (which deals with requests for flexible working arrangements);
(j)dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;
(k)any other process or proceedings under a workplace law or workplace instrument.
Prospective employees taken to have workplace rights
(3)A prospective employee is taken to have the workplace rights he or she would have if he or she were employed in the prospective employment by the prospective employer.
Note:Among other things, the effect of this subsection would be to prevent a prospective employer making an offer of employment conditional on entering an individual flexibility arrangement.
Exceptions relating to prospective employees
(4)Despite subsection (3), a prospective employer does not contravene subsection 340(1) if the prospective employer makes an offer of employment conditional on the prospective employee accepting a guarantee of annual earnings.
(5)Despite paragraph (1)(a), a prospective employer does not contravene subsection 340(1) if the prospective employer refuses to employ a prospective employee because the prospective employee would be entitled to the benefit of Part 2‑8 or 6‑3A (which deal with transfer of business).
The meaning of ‘adverse action’ is given in s 342 of the FWA:
(1)The following table sets out circumstances in which a person takes adverse action against another person.
Meaning of adverse action Item Column 1
Adverse action is taken by ...
Column 2
if ...
1 an employer against an employee the employer:
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee’s prejudice; or
(d) discriminates between the employee and other employees of the employer.
2 a prospective employer against a prospective employee the prospective employer:
(a) refuses to employ the prospective employee; or
(b) discriminates against the prospective employee in the terms or conditions on which the prospective employer offers to employ the prospective employee.
3 a person (the principal) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor the principal:
(a) terminates the contract; or
(b) injures the independent contractor in relation to the terms and conditions of the contract; or
(c) alters the position of the independent contractor to the independent contractor’s prejudice; or
(d) refuses to make use of, or agree to make use of, services offered by the independent contractor; or
(e) refuses to supply, or agree to supply, goods or services to the independent contractor.
4 a person (the principal) proposing to enter into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor the principal:
(a) refuses to engage the independent contractor; or
(b) discriminates against the independent contractor in the terms or conditions on which the principal offers to engage the independent contractor; or
(c) refuses to make use of, or agree to make use of, services offered by the independent contractor; or
(d) refuses to supply, or agree to supply, goods or services to the independent contractor.
5 an employee against his or her employer the employee:
(a) ceases work in the service of the employer; or
(b) takes industrial action against the employer.
6 an independent contractor against a person who has entered into a contract for services with the independent contractor the independent contractor:
(a) ceases work under the contract; or
(b) takes industrial action against the person.
7 an industrial association, or an officer or member of an industrial association, against a person the industrial association, or the officer or member of the industrial association:
(a) organises or takes industrial action against the person; or
(b) takes action that has the effect, directly or indirectly, of prejudicing the person in the person’s employment or prospective employment; or
(c) if the person is an independent contractor—takes action that has the effect, directly or indirectly, of prejudicing the independent contractor in relation to a contract for services; or
(d) if the person is a member of the association—imposes a penalty, forfeiture or disability of any kind on the member (other than in relation to money legally owed to the association by the member).
(2)Adverse action includes:
(a)threatening to take action covered by the table in subsection (1); and
(b)organising such action.
(3)Adverse action does not include action that is authorised by or under:
(a)this Act or any other law of the Commonwealth; or
(b)a law of a State or Territory prescribed by the regulations.
(4)Without limiting subsection (3), adverse action does not include an employer standing down an employee who is:
(a)engaged in protected industrial action; and
(b)employed under a contract of employment that provides for the employer to stand down the employee in the circumstances.
In relation to Mr Robinson’s claims about annual leave, s 90 of the FWA provides:
90Payment for annual leave
(1)If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.
(2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
In relation to Mr Robinson’s claims for payment for performance of work, s 323 of the FWA provides:
323 Method and frequency of payment
(1)An employer must pay an employee amounts payable to the employee in relation to the performance of work:
(a)in full (except as provided by section 324); and
(b)in money by one, or a combination, of the methods referred to in subsection (2); and
(c)at least monthly.
Note 1:This subsection is a civil remedy provision (see Part 4‑1).
Note 2:Amounts referred to in this subsection include the following if they become payable during a relevant period:
(a)incentive‑based payments and bonuses;
(b)loadings;
(c)monetary allowances;
(d)overtime or penalty rates;
(e)leave payments.
(2)The methods are as follows:
(a)cash;
(b)cheque, money order, postal order or similar order, payable to the employee;
(c)the use of an electronic funds transfer system to credit an account held by the employee;
(d)a method authorised under a modern award or an enterprise agreement.
(3)Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.
Note:This subsection is a civil remedy provision (see Part 4‑1).
In relation to Mr Robinson’s claims about the notice given in respect of his alleged termination, s 117 of the FWA provides:
117 Requirement for notice of termination or payment in lieu
Notice specifying day of termination
(1)An employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).
Note 1:Section 123 describes situations in which this section does not apply.
Note 2:Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a notice may be given. In particular, the notice may be given to an employee by:
(a)delivering it personally; or
(b)leaving it at the employee’s last known address; or
(c)sending it by pre‑paid post to the employee’s last known address.
Amount of notice or payment in lieu of notice
(2)The employer must not terminate the employee’s employment unless:
(a)the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or
(b)the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
(3)Work out the minimum period of notice as follows:
(a)first, work out the period using the following table:
Period Employee’s period of continuous service with the employer at the end of the day the notice is given Period 1 Not more than 1 year 1 week 2 More than 1 year but not more than 3 years 2 weeks 3 More than 3 years but not more than 5 years 3 weeks 4 More than 5 years 4 weeks (b)then increase the period by 1 week if the employee is over 45 years old and has completed at least 2 years of continuous service with the employer at the end of the day the notice is given.
(4)A reference in this section to continuous service with the employer does not include periods of employment as a casual employee of the employer.
(Note: Tthis subs (4) came into effect only on 26 March 2021, but in any event continuous service is not an issue in this proceeding.)]
As noted above, Mr Robinson advanced his case against Mr Wright on the basis that Mr Wright was ‘involved’ in BMF’s alleged misconduct for the purposes of the ACL and the FWA. However, he also advanced his ACL claim directly against Mr Wright: see [47] of the statement of claim, and cf [49] of the statement of claim.
Under the ACL, a person ‘involved’ in misleading or deceptive conduct in trade or commerce in contravention of s 18 may be liable to pay damages, required to comply with orders made to redress that conduct and disqualified from managing corporations: ACL ss 236-239, 248. The same liability can arise in respect of a person ‘involved’ in misleading conduct in relation to employment in contravention of s 31: ACL ss 236-239, 248. The definition for ‘involved’ is given in s 2 of the ACL in the following terms:
involved: a person is involved, in a contravention of a provision of this Schedule or in conduct that constitutes such a contravention, if the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced, whether by threats or promises or otherwise, the contravention; or
(c)has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or
(d)has conspired with others to effect the contravention.
Similarly, s 550 of the FWA provides:
550 Involvement in contravention treated in same way as actual contravention
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
Note:If a person (the involved person) is taken under this subsection to have contravened a civil remedy provision, the involved person’s contravention may be a serious contravention (see subsection 557A(5A)). Serious contraventions attract higher maximum penalties (see subsection 539(2)).
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
Section 323 and s 340 of the FWA are civil remedy provisions. Section 90 and s 117 are not.
FINDINGS OF FACT ABOUT THE RELEVANT EVENTS
In this section, I set out my findings of fact on the series of events that led to the ending of Mr Robinson’s employment. Much of the chronology, and the background facts, was not controversial or the subject of specific challenge, but what was to be made of the events that occurred was where some of the factual disputes between the parties arose.
Where necessary, I make further findings of fact in the sections of these reasons where I consider each of Mr Robinson’s causes of action.
Mr Wright’s establishment of BMF Construction
Mr Wright is in his sixties. He has a long history in building and construction, beginning as a boilermaker when he was 14 years old and continuing in the construction industry ever since. In June 1975, Mr Wright registered a business name for the entity that would become BMF. According to his evidence in cross-examination, he became the managing director of BMF in the mid-1980s. He remained the sole director and company secretary of the corporation until it entered liquidation in February 2021, using it to operate a construction business in Australia. This involved employing site workers, project managers and contract administrators to manage the construction of buildings on land owned or leased by BMF’s clients, or on land that BMF or Mr Wright’s other corporate entities owned.
BMF was not the only business that Mr Wright owned or controlled during the time of the events relevant to this proceeding. It was Mr Wright’s evidence that, during this time, he conducted various different enterprises through a number of corporate vehicles. Mr Wright owned a company named Slinky Bob Pty Ltd, which was the part owner of a wine store and a bar trading in South Melbourne under the name ‘Magnum + Queens’. He also owned W Merchant Pty Ltd, a company that operated a restaurant in Prahran called Wilson & Market. As I explain, Mr Robinson undertook work for both these businesses.
In terms of his method for conducting his building and construction businesses, Mr Wright gave the following evidence:
the majority of the companies are set up when you acquire a property. And then when that property is sold, after a year or so, just so we don’t have to pay the ASIC fees, then we let that company lapse.
Mr Wright was the sole director of the corporation named Brandmet Pty Ltd, from 4 January 1994 to 1 May 2020. According to Mr Wright, up until April 2020, Brandmet was a company that provided management and administrative services to other businesses in which Mr Wright held an interest, including BMF, Slinky Bob and W Merchant. The change in Brandmet’s business in April 2020 is described below.
Mr Robinson’s employment history prior to working in the business of BMF Construction
Mr Robinson is also in his sixties. Prior to his work in the business of BMF Construction, he was the Group Manager of Procurement, Logistics and Projects at PAS Group, a corporate entity that holds several Australian apparel and sporting brands. Mr Robinson’s employment with PAS Group was longstanding. In 1987, he commenced employment with an Australian apparel company named Yarra Trail Pty Ltd. Mr Robinson was responsible for this business’s logistics and procurement, and the management of its projects. He continued to work at Yarra Trail after its acquisition by PAS Group in 2004, although at some point he was transferred to the head office of PAS Group. Mr Robinson’s work for PAS Group included the management of a project to consolidate the offices of the group’s subsidiaries into a single location. According to the affidavit Mr Robinson affirmed on 21 June 2021, this project ran from about July 2008 to the end of 2010.
It does not appear to be disputed, and I find, that Mr Robinson first came into contact with Mr Wright around this period in 2009 or 2010. Each of Mr Wright and Mr Robinson gives slightly different accounts of how they first met, and under what circumstances during Mr Robinson’s work for PAS Group, but the details do not matter for the purposes of resolving the issues in the proceeding. Mr Robinson continued to work for PAS Group after the office project was completed, although some correspondence then began between Mr Robinson and Mr Wright about the prospect of Mr Robinson working for one of Mr Wright’s businesses. Nevertheless, Mr Robinson’s evidence was that his employment at PAS Group was well remunerated and secure, and that he would have been content to continue in his role there until his retirement. He was not seriously challenged on this evidence in cross-examination and I accept it, in the sense that in my opinion Mr Robinson was not unhappy in his previous employment. However, his evidence supports the proposition, and I find, that he did see an opportunity presented by Mr Wright’s offer, and he was keen to take it.
The offer by Mr Wright to Mr Robinson to work in BMF Construction
According to Mr Robinson, Mr Wright’s pursuit of him continued over a period of several years, culminating in a formal offer of employment in early 2017. In his June affidavit, Mr Robinson asserts that from 2009 to 2017 Mr Wright told him on three occasions that he wanted Mr Robinson to work for him. Around January 2017, the two men met so that Mr Wright could explain the work of BMF and how Mr Robinson’s skills in procurement and project management could be put to good use in its business. Mr Robinson then emailed Mr Wright a four-page ‘position overview’ to set out his qualifications for employment with Mr Wright. None of these aspects of the narrative was disputed by Mr Wright and I accept them.
A few days afterwards, in late February 2017, Mr Wright invited Mr Robinson to a dinner at a restaurant in Southbank. Mr Robinson sought a five-year fixed term contract at a salary of $300,000 per annum. There is a debate between the men whether this was sought at the dinner or after it by email, but the detail does not matter. In their evidence both men agreed, and I find, that Mr Robinson sought a contractual term of this kind. Mr Robinson’s evidence was that he sought to impress upon Mr Wright that he was unwilling to leave PAS Group for anything less. Mr Wright admitted in cross-examination that this term was a “dealbreaker” for Mr Robinson.
On Mr Robinson’s version of events, Mr Wright made it clear to him at the dinner that he would be working for BMF, although Mr Robinson also knew that he would be working for other businesses run by Mr Wright. In his evidence, Mr Robinson was adamant that there was no mention of Brandmet at the dinner at all.
It is not necessary to make a finding about whether or not Brandmet was mentioned at the dinner. However, I do accept the following evidence given by Mr Wright in cross-examination:
Sorry, Mr Wright?---What was also made abundantly clear, apart from the fact that Mr Robinson worked for Brandmet, which is why the contract was done in the name of Brandmet, was that he needed to work for those five years. And that’s what the agreement was. He would be there for five years. If he chose to leave before, he would not receive all that renumeration [remuneration]. That is absolutely crystal clear. There is no way I would agree to pay somebody if they’re not – they’re no longer there. Because I would have to - - -
Yes?--- - - - pay somebody else to be there.
In other words, in my opinion both Mr Wright and Mr Robinson knew that Brandmet was the corporate entity which would be identified in the employment contract as Mr Robinson’s employer. The evidence I refer to below supports that finding.
The drawing up of Mr Robinson’s employment contract
Following the dinner, Mr Robinson engaged a lawyer to draft the employment contract that Mr Wright had requested. The series of communications between Mr Robinson and his then lawyer, Mr Milicevic, is an important aspect of the evidence.
On 27 February 2017, Mr Milicevic advised Mr Robinson that he was unable to verify that Mr Wright operated a business registered with a name like ‘BMF Constructions’, but the following day he did find an extract from the Australian Security and Investment Corporation’s register of organisations for a company named ‘BMF Pty Ltd’ that listed Mr Wright as its director. Mr Milicevic noted that there had been an application to wind up BMF Pty Ltd in 2010 that was later dismissed, and emphasised that “there is always a risk that an employer will not manage their affairs and end up in liquidation/winding up, leaving employees in the lurch”. He also explained that, in his experience, it is not unusual for property development and construction companies to be liquidated if there is a downturn in the market.
At his lawyer’s suggestion, Mr Robinson asked Mr Wright to clarify which name he should enter as the counterparty to his employment contract. On 28 February 2017, Mr Wright replied that the entity that would employ Mr Robinson was ‘Brandmet Pty Ltd’.
At this point, the sequence of communications should be emphasised. On 28 February 2017 at 5.55am, Mr Robinson sent Mr Wright the following email:
Good morning !
I have a draft copy of the employment contract which I will go through and then pass on so we can [can] discuss (although it is pretty straight forward) but prior to that my legal has advised on the following.
Can you advise on the below ? ( I advised the name was BMF Construction P/L)
There is an issue with the name you provided for the employer. You need to get the name of the actual company that is operating the business, that is, the name of the company that will employ you. Why you ask?
I did a business name search for “BMF Construction” and there is no registered business name. I did an ASIC search, there is a company called “BMF Constructions Pty Ltd”, but this has a different director and is operating out of NSW (see attached ASIC search).
So, your new boss basically needs to get some advice about the name used on their website (bmfconstruction.com.au). It is against the law to operate a business under a name other than your own, unless it is registered! Your new boss also has the issue that someone else has registered a company with a very similar name and may be passing off his good will.
Regs
Jeff
(Original emphasis.)
It was to this inquiry that Mr Wright replied on the same day at 2.12pm:
Wow
Solicitors !
The entity that will employ you is Brandmet Pty Ltd.
Amanda will provide you with the can and any other details.
BMF is also a very large marketing/public relations firm
Cheers and thanks
Much for you to do.
Mr Robinson’s evidence is that he then telephoned Mr Wright to discuss Brandmet and Mr Wright “made it apparent to [Mr Robinson] that Brandmet was nothing more than a payment vehicle, and that all the work [Mr Robinson] would do was for BMF or other related development and investment entities”. In cross-examination, Mr Robinson elaborated that Mr Wright had told him during this phone call that “the work was going to be in one company and the payment was in another”, which he took to mean that Brandmet was nothing more than a payment vehicle.
Mr Wright denies that he told Mr Robinson that Brandmet was merely a payment vehicle. According to Mr Wright, he explained to Mr Robinson on that telephone call that Mr Robinson would be performing work for BMF and “other development and investment entities in which [Mr Wright] had an interest”, and that Brandmet had been established to employ people who provided services across those entities.
On 1 March 2017, Mr Robinson advised his lawyer that the counterparty to his employment contract was to be Brandmet. In his affidavit, Mr Robinson deposes that he:
emailed Mr Milicevic and advised him that I had been informed that Brandmet was a payment vehicle.
That is however, not what Mr Robinson’s email said. Rather, his email to Mr Milicevic stated:
Good morning,
1/ Can you please finalise and send through in word format ? leave out company name and ABN/ACN.
2/ Important - He came back and said the company [the company] he wants to pay me in is called "bandmet pty ltd" [sic] -
asic site is down until 8am . I will check this morning. I think it is important I ask him for some insight into the financials of that company. I don't care who pays me but to have a contract with a company that has no assets or income is useless is it not ? I need to ensure that if it all goes pear shaped the company that my agreement is able to pay me out.
Regs
Jeff
Mr Robinson emailed Mr Milicevic a little later, at 8.28am:
Good morning,
You can include the company name and ACN - one question. It looks bona fide to me but the obvious question is " hope the best, prepare for the worst" - what should i ask to see to satisfy myself that if the relationship goes belly up this company has some asset backing to pay me out ?
Ask him for assets in the company ? I think it may be overkill to ask for P&L's or balance sheet as i am prepared to risk him going broke but i want to know that the company name on the agreement is a company of some substance and holds some assets of value.
Regs
me
The emails between Mr Robinson and his lawyer indicate that a telephone call between the two ensued. In an email after that conversation, Mr Milicevic advised Mr Robinson that, “as discussed, no matter what you get now, there is nothing preventing assets being moved etc later”.
Mr Milicevic then suggested that Mr Robinson could ask for a personal guarantee from Mr Wright, or restructure the agreement to require a signing-on fee and a lower annual salary, or the holding of funds in trust. To these suggestions Mr Robinson replied, “To be honest – [I] wouldn’t hire me under those conditions – I know I have to […] try and mitigate the risk but the only problem with signing on fees and money held in trust is it displays a complete lack of trust.”
On this basis, Mr Robinson finalised the draft employment contract prepared by Mr Milicevic, and sent it to Mr Wright later that same day. That draft identified Brandmet Pty Ltd as the employer. In the covering email, Mr Robinson wrote:
My legal asked me the question “does Brandmet have any assets or financial standing as you want to be sure that your contract sits in a company with assets behind it”. Obviously any good relationship is based on trust and I trust you on this.
In cross-examination, Mr Robinson conceded that his exchanges with his lawyer reveal that he understood the risks associated with the choice of Brandmet as the entity that would employ him. He also admitted that he never sought confirmation from Mr Wright that his trust in Brandmet’s assets and financial standing as stated in his 1 March 2017 email was well placed. Ultimately, Mr Robinson maintained in cross-examination that he decided not to seek greater assurance from Mr Wright because he considered it imperative to maintain a mutual sense of trust between the two of them.
The finalisation of Mr Robinson’s employment contract continued over the following days. A person called “Amanda Roberts”, whose email signature described her title as ‘Manager Legal & Property’ at ‘BMF Construction’, emailed Mr Robinson on 7 March 2017. I infer she had reviewed the draft contract forwarded by Mr Robinson a few days previously. I also infer this is the “Amanda” to whom Mr Wright referred in the email I have extracted above. This email should be set out in full.
Good Morning Jeff
Further to your email, the areas for discussion around the Employment Agreement (the agreement) are as follows:
As it is presently drafted, it is heavily weighted in favour of the employee. The agreement is for a 5 year Fixed Period (the Fixed Period) and there are various obligations attached to this period which are onerous for BMF.
Term – Clause 3
The agreement is for a Fixed Period which seems fine in principle, but in practice can result in serious financial burdens for BMF if the appointment doesn’t work out, if BMF ceases to trade or for any other unforeseen circumstances.
Probationary Period – Clause 9
There is no probationary period. Further, if the appointment is terminated before the end of the Fixed Period, BMF is required to pay all entitlements up to and including to the end of the Fixed Period. This exposes BMF to having to pay out 5 years of salary plus entitlements even if the appointment lasted as little as one day. The entire Clause 9 should be deleted.
Suggest a probationary period of 3 months. This benefits both parties. An appointment at this level requires a probationary period.
Redundancy – Clause 22
Clause 22 (b) (ii) should be deleted. Again, BMF is exposing itself to having to pay out 5 years of salary plus entitlements in the event the position becomes redundant.
Employment law principles provide fair and reasonable payouts for redundancy.
Termination – Clause 23
Clause 23 is problematic. (a) and (b) must be deleted.
Currently, termination can only be carried out if both parties agree. Further, BMF is exposing yourself [sic] to having to pay out 5 years of salary plus entitlements in the event the position is terminated.
I am confident we can work around these issues and look forward to seeing you tomorrow at 3 PM.
Regards
Amanda Roberts
Manager Legal & Property
BMF Construction
(Original emphasis.)
A point emphasised by Mr Robinson was that Ms Roberts refers throughout this email to “BMF”, rather than to Brandmet, including when she is describing her views on the liabilities assumed by the employer. That is correct. Ms Roberts was not called as a witness and I do not consider much can be made of her use of this terminology in the circumstances.
Mr Robinson responded with the following email. The first line of his email might suggest he had had a telephone discussion with Ms Roberts, but there is only a 30 minute gap between the two emails. Whether or not there was a phone call is not material to my findings.
Hi both
Thanks for discussion.
I will look at this at home tonight and happy to discuss tomorrow.
I will make the comment that the 5 year term is indeed well in my favor by design and some of the discussion points are a retreat from what I thought I made very clear.
I am a 29 veteran at my current job and whilst there are no guarantees, I have more than enough work and credits earned that I can work at PAS until retirement. I am not unhappy in my current position both in terms of financial arrangements and work expectations.
I did explain to you, Ian, that one of my deal breakers was a safety net. I will not jump from this very safe harbor without a safety net. There is no way I will agree to a probationary period as once I walk out of this job I am very exposed.
Redundancy is also problematic for me.
As we discussed Ian, I am excited about the change of industry and moving to a more intimate and nimble environment.
But I also need to think about at my stage of my working life – if the size of the risk for you is too large, then I absolutely understand that but without a safety net I can’t contemplate a move.
Regs
Jeff
This contemporaneous email supports and confirms Mr Robinson’s evidence about the degree of assurance he was seeking before leaving his long-term employment with PAS Group. However, ultimately he signed an employment contract with the corporation Brandmet. The appropriate inference is that he was satisfied with the terms of that contract, including the ones favourable to him upon which he had insisted. I draw that inference in large part because of his own representation that he would stay with PAS Group if his conditions of employment, especially the five-year payout term, were not met.
On 8 March 2017, Mr Robinson executed the employment agreement. The other contracting party was expressed to be Brandmet. Brandmet was identified as the employer. Mr Wright signed the employment contract as the sole director of Brandmet.
In cross-examination, Mr Robinson stated that he considered the terms of this contract to be wholly consistent with the discussion that he had with Mr Wright over dinner in Southbank.
The agreement was expressed to be between Brandmet as the ‘employer’ and Mr Robinson as the ‘employee’. The recitals provided that Brandmet “conducts the business known as BMF Construction”. Mr Bartlett placed some emphasis on this feature in argument but, as I explain, I consider it does not assist Mr Robinson’s contentions. In the course of cross-examination, Mr Wright confirmed that this recital was drafted by Mr Robinson’s lawyer, and agreed in cross-examination that the recital was “false”. He was re-examined on this point, and he gave the following answer about whether the recital was correct or incorrect:
I would say it partly does it [ie conduct the business of BMF Construction] because it does all its administration. But BMF runs the day-to-day operations. The actual construction work. So probably not. Partly – partly correct. Partly incorrect.
Mr Bartlett also seized upon Mr Wright’s answer in cross-examination, in support of his client’s case. However, as Mr Wright clarified in the next section of his cross-examination, the recital was “false” because Brandmet conducted the business of “administrative services for entities owned by…. The Wright Group”. Mr Wright accepted it was BMF Pty Ltd, which conducted the business of BMF Construction. That evidence is consistent with the evidence he gave in re-examination. On the issues presented for resolution by the Court, this evidence does not have the significance Mr Bartlett sought to attribute to it in submissions on behalf of Mr Robinson, or that Mr Robinson sought to attribute to it in aspects of his own evidence.
There was no probationary period stipulated, as Mr Robinson had insisted, and, also as he had insisted, the contract was for a fixed period of five years.
The employment agreement provided:
3. Term
This agreement shall come into force on the date it is signed by both parties and shall remain in force until renegotiated or terminated pursuant to any provision of this agreement.
The term of this employment agreement is for a fixed period of five (5) years from the date it comes into force ("Fixed Period").
…
22. Redundancy
(a)A 'redundancy' occurs where the employer decides they no longer want the job the employee has been doing to be done by anyone, and this is not due to the ordinary and customary turnover of labour.
(b)Where a termination of employment occurs due to a redundancy:
(i)any entitlement to redundancy pay will be in accordance with the National Employment Standards; and
(ii)the employer will pay the employee all unpaid salaries, wages, commissions, bonuses and any and all other employment entitlements from the date of the redundancy up to and including to the end of the Fixed Period, as the employee directs.
23. Termination of employment
(a)The employee[’]s employment may only be terminated by mutual agreement.
(b)In order to terminate the employment of the employee, the employer will provide the employee with eight (8) weeks[’] notice and the employer shall pay the employee all unpaid salaries, wages, commissions, bonuses and any and all other employment entitlements from the date of termination up to and including to the end of the Fixed Period, as the employee directs.
(c)In addition to the notice above, where the employee is over the age of 45 years and has at least two years service, the employer will give an additional week’s notice or payment in lieu.
(d)Payment in lieu of notice must be made if the required period of notice is not given. In calculating any payment in lieu of notice, the ordinary time rate of pay for the employee concerned will be used.
(e)Where the employee elects to terminate their employment with the employer, the employee will give a minimum of eight (8) weeks[’] notice to the employer. Where the employee fails to give the required period of notice, the employer may withhold money due to the employee equal to the pay for the period of the notice.
(f)Upon receipt of a request by the employee, the employer will provide a written statement specifying the period of employment and the classification or type of work performed by the employee.
(g)Upon termination the employee shall immediately deliver up to the employer all records, equipment, credit cards and any other property belonging to the employer to [the remainder of this paragraph was obscured in the Court Book].
Mr Robinson’s title was expressed as “General Manager” and his duties were “broadly management, negotiation and procurement”, although the agreement stipulated that Mr Robinson was required to carry out other duties reasonably required by “the company”. This term was not defined in the agreement. The agreement also contained a term (cl. 4(a), read with the Schedule to the agreement) that Mr Robinson must:
perform duties from time to time on a permanent or temporary basis for the employer’s (or Director[’]s) related entities.
The Schedule specified that Mr Robinson reported to Mr Wright.
Brandmet was also entitled to amend Mr Robinson’s duties from time to time, after consultation with him (clause 4(c)).
The agreement included an acknowledgment by Brandmet that it was obliged to act fairly and in good faith, as required by law, equity or statute (clause 4(e)(i)). It also included a provision requiring Brandmet to provide Mr Robinson with a phone, a laptop with business software, a credit card for business expenses, a carpark at “the South Melbourne office, or other locations where [Mr Robinson] is required to work” and economy domestic and business class international flights “if any” (clause 7).
Relevantly, the agreement obliged Mr Robinson to work from 9am to 5pm from Monday to Friday (clause 6(a); Schedule). Clause 6(d) provided that, if Mr Robinson were late for work or unable to attend work, he was to personally advise his supervisor as soon as practicable. Mr Robinson was also obliged not to engage in any paid or unpaid employment that might, in Brandmet’s opinion, adversely affect the performance of his duties with Brandmet (clause 19(c)).
There is no doubt the employment contract contemplated Mr Robinson would, or could, perform work under the contract in the business of BMF Construction. There is also no doubt that Mr Robinson’s employer was the corporation named in the contract, Brandmet. I explain in more detail why I have reached these conclusions later in these reasons.
The work performed by Mr Robinson after his employment commenced
Mr Robinson commenced his new role on 18 April 2017. The evidence demonstrates that he worked closely with Mr Wright, receiving written directions via emails from [email protected] or [email protected] with the signature ‘Ian Wright Managing Director BMF’. He was issued with a business card with the ‘BMF’ logo and provided with an email address at the @bmfcon.com.au and @bmfconstruction.com.au domains. Mr Wright agreed in cross-examination that it was BMF that provided Mr Robinson with the equipment described in clause 9 of his employment contract, and reimbursed him for the expenses he incurred in connection with his employment. At the website bmfcon.com, Mr Robinson was listed as BMF’s General Manager, with a photograph of him in front of the BMF Construction logo. One important piece of work that Mr Robinson delivered was the implementation of an accounting program called ‘Sage Accounting’, which controlled the income and expenditure of BMF, as well as the payroll of BMF and Brandmet.
Mr Robinson also performed work for Mr Wright’s other companies, including Wilson & Market and Magnum + Queens. In cross-examination, Mr Robinson agreed with the characterisation in Mr Wright’s affidavit that he “regularly” worked at the Wilson & Market restaurant on Friday afternoons, and, at least during some periods of time, he worked for “several hours each week … providing marketing, finance and administration services” for Magnum + Queens.
In his affidavit evidence, Mr Robinson stated that he never did any work for Brandmet, except for creating one invoice dated 1 April 2020. Mr Wright disputed this assertion. His evidence was that all of Mr Robinson’s work was work for Brandmet, as the vehicle for providing his services to BMF, Wilson & Market, Magnum + Queens and other businesses. This of course reflects the parties’ competing views on the question of who was Mr Robinson’s employer.
Mr Wright’s decision to change his business structure
The narrative of events from this point coincides with the commencement of the COVID-19 pandemic in Australia, and around the world. That coincidence is not irrelevant to the course of events which unfolded. In the first half of 2020, the evidence suggests the relationship between Mr Robinson and Mr Wright began to change. Mr Wright proposed to enter into a joint venture with a property developer named Harry Fung. Mr Wright had commenced discussions with Mr Fung about this proposal in late 2019. Adam King, an individual who had been working with Mr Wright (including for some period of time apparently through Brandmet), had (on Mr Wright’s affidavit evidence) previously worked with Mr Fung and his company Base Group Property Pty Ltd on a number of property development projects for which Mr Fung had arranged funding through his business connections. Mr Wright was introduced to Mr Fung by Mr King. I accept Mr Wright’s affidavit evidence on these matters. He was not cross-examined on these issues.
Mr Wright deposed that his intention was that Mr Fung’s connections and expertise in property development could help Brandmet expand from its role as a company providing administrative and support services and improve BMF’s chances of securing building contracts through that expansion. I accept that evidence, and Mr Wright was not cross-examined to suggest that evidence was untrue.
A memorandum of understanding was executed between Brandmet and Base Group on 11 February 2020. The memorandum provided that Brandmet would be used as the vehicle for a joint venture in which Mr Wright and Base Group (or another entity nominated by Mr Fung) would each invest $500,000, apparently to service existing tax liabilities in Mr Wright’s group of companies, which had been consolidated in the Brandmet entity. Clearly, this was one of the key benefits Mr Wright sought to secure through the joint venture. Mr Fung was also to be appointed a director of Brandmet, which occurred on 15 February 2020. The proposal was for Brandmet to operate as the joint venture vehicle between Mr Fung and Mr Wright, providing project management services to Mr Wright’s businesses and Mr Fung’s businesses (chiefly, Base Group). According to Mr Wright, Mr Robinson was to continue as an employee of Brandmet, with his services to BMF or other businesses being charged out at an hourly rate from 20 April 2020. In other words, it was envisaged Mr Robinson would play a key role in the joint venture.
So much is apparent from an email sent by Mr Wright to Adam King on 5 April 2020. It is worthwhile setting out this email in full as it is a contemporaneous account by Mr Wright, unaffected by these proceedings, about what he sought to achieve by the joint venture, how he saw it working, and what he considered Mr Robinson’s role would be:
Adam
Further to my meeting with Harry and our many discussions about the J/V here is a very broad summary of where I see the cash flow and where we go from here.
We have no liabilities in Brandmet, as we have cleared them all with the exception of the tax liability and Jeff’s monthly wage. We get enough revenue at the moment to cover Jeff’s wages and some spare. This is without project management income, which we are able to get and will start pursuing. The reality for us is that I can[’]t run BMF building operations and manage tenants for the properties we own and also project manage for others. You are doing a great job with the tenants and financial management, but it’s hard to see how we could work any[ ]more hours. We also have to think about [if] one of us gets ill or can’t be at work, what our fallback position is. If Harry directs Jeff and another staff member we can then expect to;
1.Get our own projects, where we choose to, managed at a fixed price. (while we are not required to have a project manager by our financiers at the moment, this may be a requirement in the future)
2.Direct clients who want project management to Brandmet, declaring our 50% interest, and being able to get BMF to tender. In the past we have passed the project management on to others such as Mark Byrne, Gallagher Jeff’s and Andrew who left GJ and formed his own consultancy. All these people gained substantial fees from our clients and in less than half the instances BMF got a building contract. So we missed out on the management fees as well as the building work.
3.Be able to get Jeff to assist, on a set fee, for other projects or ventures. This may be a revamp of MQ or the proposed container hire business.
Current liabilities are the tax which is $885k, there is no wage liability until mid-May for Jeff. If we are unable to work because of Covid 19 ( unlikely because the project management can be done remotely) Jeff would be stood down until work can start again.
Monies in – We will have contributed in cash $430K and Harry $500k = $930k more than enough to pay the tax liability. I think Harry is expecting to immediately pay half the tax and ask the ATO for relief on interest and pay the remaining amount in 4-5 months. I don’t see why we would do this, I accept asking for relief on any interest that may be levied.
Expected income for the next 3 months, would be $110k from us for the setting up and management of lot 1 Dunmore. As this is a $7.5M build, this is a 1.5% fee. Harry questioned this and said he thought that 2- 2.25% would be the normal expectation. I explained that the fee proposed was reasonable given the type of project, being an industrial warehouse and Jeff’s exposure to these projects over the last 2.5 years. I also discussed with him that we believed our budget was realistic and we would expect to be able to “get back” the management fee by savings in procurement.
Harry accepted this was a normal and reasonable premise. Remember we get 50% of the profit from income generated.
We also have projects for our clients who have expressed an interest in project management where we wouldn’t be interested in the building. Residential apartments and commercial fit outs. Based on last year I would have thought we could raise at least $420k in fees. I note our fees to date for Paramount are over $140K and we will still be able to tender the works for BMF. As discussed we need to hand the works over at tender stage and end our management at that point. The developer will manage the tender process using the tender package we have prepared. This scenario is great for us, but most people see you either as a builder or a PM not both.
My understanding is Harry currently has 5 projects he requires assistance on and will start these with Jeff on the 20th. Some are his own and some for clients. We need to agree on what the fees will be, however I think over a 5 month period, the fees will be in the order of $380K.
I think the best way to view this, as we have discussed, is that we have the opportunity to generate revenue without having to take on the full liability of more staff. Harry has spare office space for 4 staff at his offices. No need to rent premises or hire accountancy staff. I will let you work out the details of BAS returns and monthly reporting with Harry.
Harry and I have agreed to review distributions after 6 months. After we quit the current liabilities and manage liabilities going forward, I would think a reasonable expectation is for there to be an excess of $350k to $400k in the first 12 months of operation.
This will give us at least $150k plus. Hopefully around $250K
It is important to note that neither Harry or myself will charge for our time, as with all our J/V, however Harry will bill his staff[’]s time as will we.
Once we get clarity on fees and capacity I will get you to work on a cash flow with Harry. This won[’]t take much to do.
I appreciate your comments that if we kept Brandmet in its new configuration we could get more revenue, but I think you can see over the last 6 months how much work it has taken to get BMF into a lean, well managed business. The devil is always in the detail. There is only so much work we can do. I am sure Harry would be interested in buying us out of our 50% share once he knows what income he can generate. If this was $350k, I would consider this.
Jeff has spent 40% of his time on delinquent debtors. We will not be in that position going forward. He can direct these energies into revenue raising activities. I think he and Harry will be a good fit. Matt, Nick and Alex are happy on most levels I am running the day to day operations of BMF, especially Matt.
Cheers mate.
Be well keep safe x
Ian Wright
Managing Director
BMF
Consistently with this understanding as expressed by Mr Wright, Mr Robinson was to be the only person remaining on the payroll of Brandmet. Before the joint venture commenced, all the other individuals who had been on the payroll of Brandmet (I make no findings about whether they were employees of Brandmet) were moved. Adam King, BMF’s Chief Financial Officer, was transferred from Brandmet’s payroll to BMF’s payroll. Dale Hardy, an accountant (or “bookkeeper”, as Mr Wright described him), was also transferred from Brandmet’s payroll to the payroll of another entity owned by Mr Wright. The fate of Amanda Roberts was not disclosed in the evidence. Little evidence was led about the changes to Brandmet’s payroll in anticipation of the joint venture, and none of the other people who had previously been paid by Brandmet was called to give evidence by either party.
Mr Robinson’s evidence was that he had no contemporaneous knowledge of these changes and only became aware of them through discovery in this proceeding.
Mr Wright was cross-examined on these circumstances. It was suggested to him that Mr Robinson knew nothing of these changes at the time, and he rejected any such suggestion. Some of Mr Wright’s evidence under cross-examination was to the following effect:
Well, Mr Robinson’s evidence was he wasn’t aware of these people being – he didn’t do the payroll runs. He wasn’t aware these people had been ceased to be paid by Brandmet. He only became aware of that in these proceedings. Is that possible?---It could be possible, but that would concern me because Mr Robinson’s role at BMF and at Brandmet and all the other entities he – that he worked for was to always ensure that my moneys were not being expended incorrectly.
….
Let’s take an Adam King, and then he became being paid by BMF. Yes? And there are others?---Well, Mr King is a consultant and sometimes he’s paid by other entities, but yes.
Mr Hardy?---Mr Hardy is the bookkeeper, and he would have – Mr Hardy continued on at BMF.
Yes. So he was being paid by Brandmet up until December 2019?---Correct.
And then BMF commenced paying him from the January 2020; correct?---That would be my understanding.
Yes. And was a new offer of employment put in place, a contract in relation to that?---Well, I’m not aware of that. Mr Robinson would have done that, would have done both.
….
You’re the MD and he was the GM?---I can’t comment on what Mr Robinson would have known or not, but he was employed there. I would have attended the office one to two hours a week.
Right. But his evidence is he only became aware in these proceedings about the movement of those people from Brandmet to BMF, and you’ve conceded that’s entirely possible?---I’m not conceding that what Mr Robinson is saying is accurate at all. I’m – I’m stating clearly that that would be surprising seeing his employment was to administer those things.
I find Mr Wright is likely to have known more about the circumstances of various individuals moving on and off Brandmet’s payroll than this evidence discloses. The joint venture was a matter in which he was personally involved, and that he personally directed, at least at the start. I find that, considering the evidence as a whole, Mr Wright deliberately arranged the joint venture in a way which left only Mr Robinson on the payroll of Brandmet. There was nothing unlawful in him doing so. The evidence demonstrates at least he and Mr Fung envisaged Mr Robinson would play a key role in the joint venture. I accept this intention may have been communicated to Mr Robinson as an afterthought. I find that neither Mr Fung nor Mr Wright gave any real consideration to Mr Robinson’s personal interests, but rather treated him as an employee who was subject to direction about the performance of his duties. Mr Robinson’s evidence was that he understood that he would remain under the supervision of Mr Wright once the joint venture had been implemented.
After this restructuring, Brandmet was left with only a significant tax liability and – according to Mr Wright – the liability to honour Mr Robinson’s employment agreement.
On 4 April 2020, Mr Wright emailed Mr Fung to set out the details of the proposed joint venture, including that Mr Robinson was “ready to start under [Mr Fung’s] supervision on the 20th of April 2020”. He told Mr Fung that Mr Robinson understood that he would have a desk at Base Group’s office. Mr Wright also noted that some of the projects of BMF and Base Group could be impacted by the COVID-19 pandemic. Mr Fung replied to Mr Wright’s email on 6 April to confirm that Base Group was in agreement with those details, and Mr Wright transferred 50% of the shares in Brandmet to Mr Fung later that day.
Mr Robinson’s knowledge of, and reaction to, the joint venture and to the role assumed by Mr Fung
Counsel then continued at some length through the evidence to explain that the proposal for Brandmet was, on the contemporaneous documentation:
that Brandmet is going to be providing project management services to businesses. It’s going to be a commercially active company providing services to perhaps the commercial world more generally rather than just to entities within Mr Wright’s orbit.
That description conforms in my opinion to the evidence I have set out earlier in these reasons. I accept that submission.
The evidence does not support a finding that either the insertion of Brandmet as the employer of Mr Robinson was a sham on the part of Mr Wright, or that the creation and entry into the joint venture was a sham on the part of Mr Wright and Mr Fung.
As to the contract, I have set out above all the evidence which supports the finding that each party (Mr Wright as the controlling mind of Brandmet) carefully considered both the identity of the contracting parties and the terms and conditions of the contract. There was negotiation, and eventually a bargain was reached, with Mr Robinson being legally advised at all relevant times. Mr Wright was quite transparent about which of the corporate vehicles he controlled should be Mr Robinson’s employer. He was quite transparent that Mr Robinson would provide services to all of his businesses, which he conducted through a number of different corporate entities. There was no deception, no disguise. Mr Robinson considered insisting on extra safeguards, such as a personal guarantee, but decided not to. He now wishes to enforce aspects of that contract. The transaction was not a sham on the part of Mr Wright.
As to the joint venture, I have set out above all the evidence which supports the finding that the joint venture was seen as a business opportunity by both Mr Wright and Mr Fung. Each saw they, and their respective business interests, had something to gain by it. They were introduced through Mr King. Each negotiated the terms of the joint venture from the position of what suited their respective interests. Brandmet was consciously selected as the vehicle for the joint venture, and Mr Robinson was envisaged as having a central role in how the joint venture would operate and what services it would provide. It is true that Mr Wright was not interested in how this change might affect Mr Robinson. It is true he did not consult him. By this point he was treating Mr Robinson as an employee who could be directed about what work to perform. His treatment of Mr Robinson was somewhat callous. It was, as I have found, borne out of a singular sense of self-interest. None of those characterisations indicate deception or disguise in the joint venture transaction itself, or in the use of Brandmet. They indicate pursuit of self-interest. That is not unlawful. As soon as Mr Wright sensed Mr Fung would not put up his financial contribution, Mr Wright sought to get out. Mr Fung apparently cooperated in that occurring, albeit the two men had to negotiate terms to some extent. It seems the COVID-19 pandemic played a role, but what else was operating on the men’s decision making is not revealed by the evidence. Neither appeared concerned for the situation of Mr Robinson. Again, that does not render their conduct deceptive or turn the joint venture into a sham.
Mr Fung, as the controlling mind of Brandmet at the relevant time, did not dismiss Mr Robinson. He sought for him to return to work for Brandmet. Mr Robinson refused to do so. That sequence of events is not consistent with Brandmet being nothing but a sham after it was transferred to Mr Fung.
If there is a circumstance in which a written contract of employment, representing the whole of the parties’ bargain, should not be construed as reflecting the true reality between the parties because it is, or aspects of the bargain are, a sham and so should not be recognised by a court, then the evidence in this case is not such a circumstance.
“Piercing the corporate veil”
A number of times during opening and closing submissions, orally and in writing, Mr Bartlett contended that what needed to happen in this proceeding was for the Court to “pierce the corporate structures”. I understood him to be referring to other phrases such as “pierce the corporate veil”. Mr Bartlett submitted in closing written submissions on behalf of Mr Robinson:
It would be a miscarriage of justice, manifestly unfair, inequitable if the Second Respondent is allowed, by the law, to hide behind corporate veils and escape out the “back door”, given his level of involvement and obvious intentions to avoid liability.
Piercing or lifting the corporate veil is a familiar phrase, but as Allsop CJ has demonstrated in his Honour’s recent paper, it is generally an inapt expression.
In “Piercing the corporate veil: recent international developments” (paper given to the 38th Annual Conference of the Banking & Financial Services Law Association on 26 August 2022), Allsop CJ explains (at [3]) what is encompassed in the expression “piercing [or lifting] the corporate veil”:
The metaphor in piercing or lifting the corporate veil assists in appreciating what might be occurring within the legal doctrine. The “corporate veil” assists us to visualise the status of corporations as being legally distinct and separate from their directors, shareholders and employees. A veil has transparency, we can see that corporations are indeed run by people, but a veil is also a physical barrier and imports the notion of protection. The “corporate veil” has been cast over corporations by reason of public policy, that public policy being the prioritisation of the economic and social advantages of corporations enjoying separate personality and limited liability. To “pierce” the veil suggests destruction or renting of the veil: thus of the policy. To “lift” the veil suggests removal to disclose reality. We will see shortly how the UK Supreme Court in the first of the cases which I wish to discuss, Prest v Petrodel Resources, deployed the differently expressed metaphors in clarifying the doctrine.
(Footnotes omitted.)
After what is with respect a comprehensive consideration of comparative authorities arising in respect of a variety of different common and statutory claims, Allsop CJ concludes (at [66]-[67]):
I have sought to show how the metaphor of “piercing the corporate veil” has been circumscribed to its proper place. In company law, the “corporate veil” is a metaphor for public policy grounded in statute. We recognise that separate personality and limited liability promote efficiency in the economy and entrepreneurial behaviour and hence that it is in the public interest for corporations to enjoy these characteristics. The law on “piercing” that veil is a testament to the fact that these public policy benefits cannot be pursued at any cost. There are limited circumstances, albeit perhaps ill-defined, when separate corporate personality and limited liability cannot be maintained. Courts are more likely to reach this conclusion and pierce the veil where the corporate form is being abused for an improper purpose, such as to perpetrate fraud and avoid extant legal duties.
However, we may dispel the “mists of metaphor” when considering corporate liability resulting from the application of the law of agency and the law of tort. The veil remains undisturbed when a company is found liable as a result of agency or the imposition of a duty of care in tort because in such circumstances a company is being found directly responsible for the consequences of its own actions, or of a real relationship of agency between parent and subsidiary not one said to arise from the existence of control and identity of interest in two separate corporate forms.
Although he did not develop this submission to any great level of detail, Mr Bartlett invoked of the concept in support of Mr Robinson’s application in a way that falls within what Allsop CJ describes at [66], referring to Mr Wright’s conduct as involving dishonesty and deception. Again he did not confront him with these allegations directly.
These submissions were in my opinion another way of expressing the sham argument I have dealt with above, and rejected. If there are circumstances in which a court might set to one side the usual principles of corporate responsibility and liability, this is not one of them.
Conclusion on the identity of the employer issue
Therefore, Mr Robinson’s causes of actions must be assessed on the basis of my finding that at all material times, Brandmet was his employer. Since Brandmet is not a party to the proceeding, any claims for breach of Mr Robinson’s employment contract at general law cannot succeed, and need not further be considered.
The FWA claims
In section E of the statement of claim filed in this proceeding, a number of claims are made by Mr Robinson based on various provisions of the FWA.
Key amongst them are Mr Robinson’s adverse action allegations. These occupy paragraphs [53]-[64] of the statement of claim.
The second set of claims, dealt with at [65]-[71] of the statement of claim, concern the non-payment of annual leave entitlements to Mr Robinson, which are alleged to be payable for annual leave accrued but not taken to the time of the cessation of his employment. This is alleged to amount to $26,312.18.
The third set of allegations concerns an alleged failure to pay Mr Robinson on a monthly basis, contrary (it is alleged) to s 323(1) of the FWA. These allegations are dealt with at [72]-[74] of the statement of claim, and are premised on Mr Robinson being entitled to all of his salary and entitlements until the end of the fixed five year period, but not being paid after May 2020.
The fourth set of allegations concerns the alleged required notice period prior to the alleged termination of employment, or payment in lieu of notice, and an alleged contravention of s 117 of the FWA, leading also to a contravention of s 44(1) of the FWA. This is dealt within paragraphs [75]-[79] of the FWA.
Each of these allegations is, as the statutory provisions require, an allegation made against an employer. In the statement of claim, they are pleaded against BMF. From [80] to [83], Mr Wright is alleged to be liable pursuant to s 550 of the FWA as an accessory.
I have found that BMF was not Mr Robinson’s employer. Therefore, all these allegations against BMF fail at the outset.
It is appropriate to note some of the further difficulties which stand in the way of Mr Robinson proving the FWA allegations, aside from the finding that Brandmet was at all material times his employer.
Adverse action allegations
As part of his final submissions on behalf of Mr Robinson, Mr Bartlett handed up an “adverse action table”, which identified ten alleged instances of adverse action. Broadly, the adverse action alleged by Mr Robinson is all alleged to have occurred after the joint venture commenced, and falls into the following categories:
(a)Mr Wright failing or refusing to “engage” with Mr Robinson about his employment after the joint venture and failing or refusing to provide ongoing work for Mr Robinson on BMF projects;
(b)the removal (alleged to be by BMF but under the direction or with the consent of Mr Wright) of Mr Robinson’s BMF Construction email address and website profile, and his access to BMF computer systems;
(c)the failure of Mr Wright (personally) to attend, or engage in the Fair Work Commission processes as Mr Robinson alleges he should have; and
(d)the non-payment of remuneration and entitlements from around 23 May 2020, including on the basis of what Mr Robinson contends was an unlawful stand-down notice issued by Brandmet and Mr Fung.
The additional difficulties with these causes of action are sufficient for the Court to make a positive finding that Mr Robinson has not proven his allegations made against Mr Wright under s 550 of the FWA. That is so even if it might be accepted (at least for the purpose of this analysis) that a person can be liable under s 550 for conduct engaged in by an employer where the employer is not a party to the proceeding, and where that person was neither a director nor a shareholder of the employer.
The first difficulty is the causal link required by s 340(1). The adverse action must occur “because of” a workplace right enjoyed by an individual, or exercised or proposed to be exercised by an individual. Much has been written in the authorities about what kind of link is required, and what an applicant must prove, as well as the role of s 361 in this aspect of the legislative scheme. All of these matters were barely addressed in submissions on behalf of Mr Robinson, except at a factual level, which meant the submissions failed to grapple with the legal requirements for these causes of action to be made out.
I explained my understanding of the link required by s 340 in Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [55]-[61]. I adopt the same approach here. See also Rumble v The Partnership (T/as HWL EbsworthLawyers) [2020] FCAFC 37; 275 FCR 423 at [34]-[39].
The workplace rights identified by Mr Robinson rely on the definition in s 341(1)(c) of the FWA, and are all alleged to be complaints or inquiries “in relation to” his employment. In my opinion there is nothing in the evidence that established it was more likely than not that the conduct identified by Mr Robinson as adverse action was because of any complaint or inquiry in relation to his employment. Rather, on the evidence before the Court (recalling it is incomplete because of Brandmet not being a party, and Mr Fung not being a witness), the conduct occurred, assuming favourably to Mr Robinson’s case that it did occur, because of the decision by Mr Wright and Mr Fung to enter into a joint venture using Brandmet as the corporate vehicle for that joint venture, and then the collapse of the joint venture.
There is no evidence at all to even suggest that any of this conduct occurred because Mr Robinson made complaints or inquiries about his ongoing position with Brandmet. It is of course understandable and unsurprising that he made such complaints and inquiries in the circumstances, but there is no basis in the evidence to conclude that those complaints and inquiries became activating reasons for the stand down notice, for his removal from the public-facing manifestations of BMF Construction and for the non-payment of remuneration after 18 May 2020. As I have noted, the evidence on these matters is far from complete because, to secure more complete evidence, an entirely different trial would have needed to be run. One that joined Brandmet from the outset, and gave Brandmet an opportunity to lead evidence. One that called Mr Fung as a witness, and probably joined him as a party, and gave him an opportunity to lead evidence.
A second difficulty is, as counsel for Mr Wright submitted, that much of the conduct alleged to be adverse action was not on its face capable of falling within the definition of adverse action in s 342 of the FWA. Mr Robinson’s submissions appeared to accept that Item 1 of the table in s 342 was the applicable aspect of the provision. That of course concerns action taken by an employer against an employee, and runs straight into the Brandmet difficulty. Putting that to one side:
(a)There is no allegation of dismissal in this proceeding. I accept the closing written submissions on behalf of Mr Wright on this point at [47]; and
(b)failures to attend a Fair Work Commission conference, or rejecting settlement offers at a Fair Work Commission conference, do not fall within Item 1 – they are insufficiently connected to the performance of work by an employee, or the terms and conditions of an employee’s work. The same is true about the debate over who was Mr Robinson’s employer.
In principle, it can be accepted that the (wrongful) issuing of a stand down notice, and the failure to pay remuneration and other entitlements as an employer is obliged to, are clearly within Item 1 of s 342(1). However they are far from the majority of the conduct alleged to be adverse action. In turn, they suffer from the identification of the wrong employer, and the failure to establish any causal link as required to the existence or exercise of a workplace right. Any findings about them would also involve a denial of procedural fairness to Brandmet and to Mr Fung, who, through the forensic decisions made by Mr Robinson, were not joined to this proceeding at the appropriate time. Those forensic decisions skewed the evidence and issues in the trial in a way which could not be cured by the late application made by Mr Robinson to change course.
A further matter which should be addressed is the submission on behalf of Mr Robinson at [55] of his written submissions in chief that:
The “adverse action” identified again has been established and correctly conceded by the Second Respondent.
The footnotes give references to the evidence where Mr Wright did not dispute at least some of the factual conduct alleged to constitute the adverse action. That is a far cry from any concession that the conduct alleged constituted adverse action, as Mr Wright’s own defence and submissions make very clear.
Accrued annual leave entitlements
These allegations fail because they are not made against Mr Robinson’s employer. There has been no contradictor to Mr Robinson’s allegations about the leave he has accrued. There has been no exploration of whether Mr Robinson himself should be found to have brought the contract of employment to an end. As Mr Wright submits, other aspects of cl 23 of the employment contract might then come into play.
The s 323 allegations
These allegations fail because they are not made against Mr Robinson’s employer. There has been no contradictor to Mr Robinson’s allegations about the operation of s 323. Mr Robinson relies on Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908 and Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878. Mr Wright’s submissions point out there are other, conflicting authorities, and point to Coote v Mainline Access Pty Ltd & Anor (No 3) [2019] FCCA 383; 344 FLR 1 at [39]-[57].
It can be accepted, as Mr Robinson submits, that the decisions in both Murrihy and APESMA accept that s 323 extends to entitlements arising under contracts of employment. Ordinarily, those being decisions of single judges of this Court, a single judge would follow those decisions unless persuaded they were incorrect. However, the premise of s 323 is described by Buchanan J in APESMA at [30]:
The ordinary language of s 323 is apt to identify, and provide for the enforcement of, an obligation to pay amounts which have become payable, as well as the more specific obligation to pay such amounts in full, in money and at least monthly (subject to the statutory exemptions which accompany the obligation). It does so by permitting the imposition of a civil penalty for contravention of the obligation.
(Emphasis added.)
In other words, the premise or precondition for the operation of s 323 is that there is a contractual entitlement which has not been paid. For the reasons given above, there is no proper contradictor in this proceeding about that proposition, and neither Brandmet nor Mr Fung have been heard on Mr Robinson’s allegations. The Court cannot decide them, nor grant any relief in respect of them. Especially so since s 323 is a civil remedy provision and, if made out, the penalties would be imposed on Brandmet. They cannot be imposed because first, it is not a party; second, it has not been heard; and third, it is in liquidation.
The s 117 allegations
Again, these allegations face the insuperable difficulty of Mr Robinson having nominated BMF as the employer. Putting that to one side, so far as the evidence goes (and I repeat the findings I have made about it being incomplete and there being no proper contradictor), I otherwise accept the written submissions put on behalf of Mr Wright (at [54]), which in my opinion properly reflect the limited evidence before the Court. The footnotes are omitted, but I accept the evidence referred to supports the submissions made.
The evidence before the Court on the circumstances in which employment came to an end is largely undeveloped – essentially because Brandmet is not a party to the proceeding. However on the material before the Court it is apparent that it was Mr Robinson who brought employment to an end, particularly given that Brandmet had sought to have Mr Robinson return to work in order to fulfil the contract. Mr Robinson had started his own business under the name of ‘Solutions Strategies’ in July 2020, and has been performing consultancy work for other businesses since that time. He was submitting medical certificates notwithstanding that he was clearly well enough to be performing work for other businesses.
It is submitted that it was quite apparent that Mr Robinson had no intention of returning to work for Brandmet. He had been sent a letter by Mr Fung, seeking his return to work, or prospectively face termination for abandonment. He made a conscious decision to bring employment to an end by sending a letter dated 25 November 2020. It was Mr Robinson who failed to provide the requisite period of notice, and he has no basis for making a claim under this section.
The s 117 allegations must be rejected.
The s 550 allegations against Mr Wright
As the submissions made on behalf of Mr Wright contend, all the FWA allegations also involve conduct alleged to have occurred after 1 May 2020, at which point Mr Wright had ceased to be a director and shareholder of Brandmet. As Mr Wright’s submissions correctly recognise, that does not in principle prevent a conclusion of involvement under s 550. Section 550 is in terms directed at “a person” and its language should not be construed unduly narrowly.
Nevertheless, the contraventions alleged (if any) must, on the Court’s finding, be contraventions by Brandmet of a civil remedy provision of the FWA. Relevantly, that means contraventions of ss 44(1), 323 or 340(1).
Once again, these allegations must fail because Brandmet is not a party, and has not been heard on the allegations that should have been made against it from the outset. Brandmet was not in liquidation when this proceeding commenced.
The allegations must also fail because there is no evidence Mr Wright “intentionally participated in the contravening conduct, with actual knowledge of the essential facts which constituted the contravention”: see Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50 at [59], citing Yorke v Lucas [1985] HCA 65; 158 CLR 661 at 667. The notion of participation is essential, as Flick J pointed out in Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833 at [116]. Flick J’s approach was endorsed by the Full Court in EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134; 360 ALR 261 at [13]. More recently, see Tamu v World Vision Australia [2021] FCA 333 and McCardle v Johnson (No 2) [2022] FCA 168. The applicable principles are also summarised by White J in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176]-[179], endorsed by the Full Court in EZY. Inherent in all these descriptions is the requirement that for a person to be liable under s 550, they must have actively engaged in conduct that demonstrates a sufficient link to the contravening conduct, and sufficient knowledge of it: see also EZY at [15].
As I have noted, all of the alleged contravening conduct which might be capable of constituting adverse action (eg the stand down notice, and the failure to pay remuneration and entitlements) occurred well after Mr Wright had ceased his involvement with Brandmet. The person who, at least on the incomplete evidence before the Court, appears to have taken all these steps was Mr Fung.
I do not consider it is putting it too highly to say that the evidence as a whole discloses that in his pursuit of his self-interest, Mr Wright washed his hands of Brandmet, and of Mr Robinson. He might be criticised for that, but none of the alleged causes of action are made out even if that is the correct characterisation of his attitude, which I consider it is.
Mr Robinson has not proven his case against Mr Wright under s 550 of the FWA.
The ACL claims
In chief, Mr Robinson’s written closing submissions made no contentions about his ACL claim. Nor did his written reply submissions. In oral submissions, Mr Bartlett addressed the ACL claims, but only as to factual issues.
The ACL claim is pleaded, as I have noted, against BMF and against Mr Wright directly. Insofar as it is made against BMF, first it is misconceived as it is based on the premise that BMF was Mr Robinson’s employer, contrary to the findings the Court has made. Insofar as anything remains of such a claim directly against BMF (and it is not suggested there necessarily is anything left, but allowing for the possibility), it is stayed by reason of s 500(2) of the Corporations Act.
Therefore the ACL claim need only be considered insofar as it is pleaded against Mr Wright directly.
The representations alleged to have been made by Mr Wright are in form and substance the same as those alleged to have been made by BMF. That is because Mr Wright is identified as the representor.
As pleaded the alleged representations comprise representations by Mr Wright to Mr Robinson that:
(a)If Mr Robinson commenced employment with BMF,
(b)then his employment would be for a fixed period of 5 years; and
(c)If the employment lasted for less than 5 years, Mr Robinson would be paid an amount equal to 5 years at a rate of $300,000 plus superannuation per year.
The representations are alleged to have been made by Mr Wright during his dinner conversation with Mr Robinson at the Bellota Wine Bar on or around 23 February 2017, and in an email chain between Mr Robinson, Mr Wright and Amanda Robertson from 7 March 2017.
By [44] of the statement of claim, the representations are alleged to be in relation to future matters, and therefore to engage the terms of s 4 of the ACL. That is the only way the representations are pleaded. I dealt with the meaning and operation of s 4 in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2017] FCA 1091 at [219]-[223].
I adopt that approach in my reasoning here.
For the purposes of determining these allegations, I am prepared to assume in favour of Mr Robinson that the representations are actionable under either s 18 of the ACL because they were made in trade and commerce, or under s 31 of the ACL because they related to matters of employment. The submissions of Mr Wright did not submit otherwise.
Therefore, the key issues are:
(a)Were the representations as alleged in fact made?
(b)Were they representations as to future matters for the purposes of s 4 of the ACL?
(c)If they were representations as to future matters, did Mr Wright have reasonable grounds for making the representations, noting the effect of s 4(2) of the ACL?
Mr Robinson has not proven Mr Wright made any representations about what would happen if Mr Robinson commenced employment with BMF. As I have found, Mr Wright expressly nominated Brandmet as Mr Robinson’s employer. The evidence does not establish that at any stage Mr Wright represented to Mr Robinson he would be employed by BMF. The premise of the ACL pleading has not been made out.
Even if I am wrong about that finding, I accept the submissions made on behalf of Mr Wright that Mr Robinson has not proven that Mr Wright made any such representation as those I have described in [251(b) and (c)] above.
In his affidavit evidence, Mr Robinson clearly deposes to the fixed five-year term being his proposal, to it being not negotiable and to it being a ‘dealbreaker’.
Mr Robinson’s oral evidence was even clearer on this point. In cross-examination he gave the following evidence:
And you told them that you wanted a clause in there that gave either party the right to terminate within the five-year period; is that right?---Can you point out where it says that to me, please.
Sure. Well, in 23(b) it talks about termination by the employee, and – sorry, termination of the employee by the employer, and 23(e) talks about termination by the employee; that’s right?---Yes.
And it’s only in the case of (b), termination by the employer, that payment out for the rest of the fixed period is triggered; does that reflect your understanding?---Yes.
Yes. And that’s what you told the lawyers to draft?---Yes.
Yes. And that was what had been agreed at the dinner that you had at the wine bar a few days before; is that right?---Yes.
Yes. So at the dinner it had been agreed that if the employer terminates during the five years, the unexpired term is paid out, but if you terminate, it’s not paid out?---No, that wasn’t discussed at the dinner. This employment contract came after the dinner. I was asked to provide it after the dinner. So that wasn’t discussed. It was – I was asking for a five year term irrespective. It was discussed about if I wanted to leave.
Okay. But the clause that you ended up putting before the employer was one that said – it only provided for payment out of the rest of the fixed period if the employer brought the contract to an end; that’s your understanding?---Yes.
Yes. Now, you were quite clear that the five-year term was something that operated very much in your favour?---Absolutely.
(Emphasis added.)
Two matters should be noted about this evidence. First, Mr Robinson’s own evidence is that only the subject matter of (b) of the alleged representations was discussed at the dinner. Second, his evidence is clear that there was no statement from Mr Wright, but rather a request by himself about a five-year period. On his own evidence, nothing was said about what would happen if he did not complete the five-year period. On Mr Robinson’s own evidence, he cannot prove the alleged representations insofar as he alleges they were made at the dinner.
The other alleged occasion for the representations is said to be in a series of emails on 7 March 2017. Again, Mr Robinson’s own oral evidence firmly establishes that Mr Wright made no such representations – directly, or by other persons such as Ms Roberts (if that is alleged, which it seems to be). Mr Robinson was giving evidence about his disagreement with the proposed terms in the emails from Ms Roberts: see my summary at [71]-[74] above. He continued:
What discussion points were – are you at retreat from what you had made very clear?---I wanted to change the term, the probation period and the redundancy and the termination.
Okay?---I made it very clear that it had to be a five-year fixed term. I had been working at PAS for 30 years and could retire there, and I was not going to jump without a safety net which is a fixed five-year contract. These email – and I made that clear at the Bellota dinner with Mr Wright; right? When this came, it was a complete retreat, I felt, from what we had discussed and agreed on. I said to Mr Wright at that dinner, “Do not look at this as a – as a one-by-one-year contract. It is a $1.5 million investment, and I saw this email as a retreat, and what I – what I said to her – I said, “If you’re not prepared for a five-year fixed year – term contract, according to that, then, that’s fine. I will stay at – I will stay at PAS. Happy to be there. I can retire there.” That was the point of my email.
So you were quite firm that none of these issues were up for negotiation - - -?---Correct.
- - - and the contract that your lawyer had prepared was to be executed by the company or there would be no agreement?---Correct.
Once again, this evidence establishes it was Mr Robinson who made statements about the five-year fixed term. There is no evidence establishing any statement by Mr Wright, nor even by Mr Robinson, of the kind alleged in (c) at [251] above, as pleaded. I find no such representation was made by Mr Wright, and (for what it is worth, although it has little bearing on the ACL claim) no such statement was made by Mr Robinson.
The closest here to a statement of the kind alleged in [251(c)] is what ended up in the employment contract as cl 23(b) (putting to one side the somewhat contradictory terms of cl 23(a)). That was the key clause from Mr Robinson’s perspective, as his evidence disclosed. But the existence of that clause goes nowhere towards proving the alleged representations.
For those reasons, Mr Robinson has not proven that Mr Wright made any of the alleged representations. On that basis alone, his ACL claim against Mr Wright must fail.
In my opinion it is not appropriate for the Court to go on and make findings about whether, if it is wrong on the issue of whether Mr Wright made the alleged representations, s 4 is engaged, and if so whether there were reasonable grounds for the alleged representations. That would involve a course of fact finding entirely contrary to the facts I have found on the evidence, and would involve a level of artificiality and assumption that is inappropriate in the circumstances. For example, with the alleged representation in (c), which on no view of the evidence was even requested by Mr Robinson, the Court would become embroiled in an illogical and irrational path of reasoning to decide if Mr Wright had reasonable grounds to make such a representation, when there is not a scintilla of evidence that it was made, he was not cross-examined about it being made, and when the employment contract demonstrates by cl 23(b) a quite different bargain struck between the parties.
The equitable claims
The contention made here, at [50] of the statement of claim, is under the heading “promissory estoppel”. The entire allegation is based on the same alleged representations as those pleaded for the ACL claim.
I have found no such representations were made by Mr Wright. Therefore, the promissory estoppel claim fails at the outset, and it is unnecessary to descend into the rather more complicated arena of how a promissory estoppel could operate against Mr Wright personally, rather than against Brandmet as the party to the employment contract.
Interference with contractual relations
There is a section in the applicant’s final submissions dealing with this tortious claim. This claim was one of the proposed amendments the Court did not allow. Accordingly, it is not necessary to consider this claim.
Relief
Mr Robinson has failed to prove any of his claims on the balance of probabilities. Therefore, although by orders the Court had split the trial between liability and relief, there is no necessity for any further trial, or any further argument about relief. Mr Robinson’s originating application must be dismissed.
Mr Wright did not submit that he wished to be heard on the question of costs of the proceeding generally, aside from a submissions made about Mr Robinson’s late interlocutory application for leave to amend.
I certify that the preceding two hundred and seventy-one (271) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mortimer. Associate:
Dated: 7 October 2022
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