Treadgold v Norfolk Ridge Pty Ltd
[2007] WADC 143
•22 AUGUST 2007
TREADGOLD -v- NORFOLK RIDGE PTY LTD [2007] WADC 143
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 143 | |
| Case No: | CIV:545/2007 | 5 JULY 2007 | |
| Coram: | REGISTRAR KINGSLEY | 22/08/07 | |
| PERTH | |||
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Judgment given in part | ||
| PDF Version |
| Parties: | ANTHONY ASHBOURNE TREADGOLD NORFOLK RIDGE PTY LTD (ACN 081 502 650) |
Catchwords: | Practice O 14 Rules of the Supreme Court Turns on own facts |
Legislation: | Nil |
Case References: | Donato v Legion Cabs (Trading) Co-operative Society Ltd [1966] 2 NSWR 583 Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
NORFOLK RIDGE PTY LTD (ACN 081 502 650)
Defendant
Catchwords:
Practice - O 14 Rules of the Supreme Court - Turns on own facts
Legislation:
Nil
Result:
Judgment given in part
(Page 2)
Representation:
Counsel:
Plaintiff : Mr C P Stokes
Defendant : Mr P T Arns
Solicitors:
Plaintiff : Chris Stokes & Associates
Defendant : Arns & Associates
Case(s) referred to in judgment(s):
Donato v Legion Cabs (Trading) Co-operative Society Ltd [1966] 2 NSWR 583
Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711
(Page 3)
1 REGISTRAR KINGSLEY: This is the plaintiff's application pursuant to O 14 Rules of the Supreme Court.
The pleadings
2 The plaintiff pleads that he was employed by the defendant from 1 July 2005. The agreement is in writing by letter signed by the company's secretary and is dated 30 June 2005. The agreed salary stated in the letter is $84,000. The plaintiff pleads that he worked for the defendant from 1 July 2005 to 20 January 2006 and that the defendant has not paid the plaintiff the sum of $55,097.
3 In addition, the plaintiff pleads that in lieu of paying fees of $2,500 to directors, the plaintiff would get 10,000 shares in the defendant and 53,000 options to purchase at 40 cents per share. The agreement pleaded is constituted by a letter dated 14 April 2004, and by a resolution of the board made 14 April 2004.
4 The plaintiff alleges that the defendant paid directors fees for a period but no fees were paid and no shares or options have been issued from 1 July 2003 to 25 August 2006. The plaintiff claims $8,175 in addition to the $55,097.
The plaintiff's evidence
5 The plaintiff's affidavit sworn 24 April 2007 annexes a letter dated 30 June 2005 headed "transfer of employment". The letter is on Norfolk Ridge Ltd letterhead. The letter states that Norfolk Ridge Vinery Management Investment Scheme (NRVMIS) was terminated on 20 June 2005 and that NRV Limited (NRVL) will cease to manage the vineyard operations. The owners of the vineyard, Norfolk Ridge Limited (NRL) will assume the day to day running of the vineyard. The letter goes on to state that it is appropriate to transfer the plaintiff's employment to NRL on the same terms and conditions as the employment with NRVL. The letter is signed by Rhonda McCarroll the company's secretary, and is countersigned by the plaintiff
6 As to the matter of director fees the plaintiff annexes a copy and a letter dated 14 April 2004 written by the plaintiff to the directors of NRL. In that letter the plaintiff notes the directors have not been paid any remuneration since incorporation of the company and suggests that for "a public company our size the sum of $5,000 per annum would not be inappropriate".
(Page 4)
7 The plaintiff goes on to write that as the company does not have the financial resources to make the payments, the directors contribution be recognised by an allocation of shares. The plaintiff then details an allocation of shares for the period 1998 to 2003. This amounts to $53,000 shares on the plaintiff's part.
8 Rather than an allocation of shares the proposal put to the board of NRL was that the partly paid shares of each director be treated as fully paid. The plaintiff annexes resolutions to that effect.
9 The plaintiff has sworn a second affidavit on 26 June 2007. The plaintiff annexes his handwritten contemporaneous notes of the board meeting of NRL on 30 June 2005 wherein the transfer of the plaintiff's employment from NRVL to NRL was recorded.
10 As with the issuance of shares to the directors, the plaintiff annexes a notice of resolution dated 28 July 2005, apparently signed by MJ Chenoweth, who is one of the directors. In that resolution there is noted a vote for the plaintiff to have 10,000 shares issued for the period 1 July 2004 to 30 June 2005.
The defendant's evidence
11 The principal affidavit opposing the application is sworn by Peter Hodge on 1 June 2007. Hodge is a director of the defendant. There is also an affidavit by MJ Chenoweth sworn 1 June 2007 in opposition.
12 As to the wages issue, Hodge denies the agreement. Hodge deposes that he had not seen the letter of 30 June 2005 prior to August 2006, and that McCarroll did not have any authority to commit the defendant to an employment contract. Hodge deposes that McCarroll was the secretary of the defendant at the time, and a friend and confidant of the plaintiff. Hodge asserts that he has not seen any resolution of the Board approving or authorising the offer of employment.
13 Hodge deposes that, in negotiations preceding the sale of shares in the defendant, all employee contracts had been terminated as at 7 October 2005. Hodge goes on to deny that the plaintiff was entitled to directors fees. Hodge deposes that on the plaintiff's evidence he received shares in lieu of director's fees. In any event the fees are confined to the period July 2004 to June 2005 and therefore any amount is limited to $2,500. Hodge deposes that the plaintiff has not produced any agreement
(Page 5)
- or resolution whereby the defendant approved the payment of directors fees.
14 Hodge then goes on to depose that the plaintiff served a statutory demand pursuant to s 45F of the Corporations Act 2001 which was subsequently withdrawn, and had initiated proceedings in the Industrial Commission, which proceedings were discontinued, all on the present issue.
15 Chenoweth deposes that he cannot recall nor does he believe that the plaintiff was an employee. To the best of Chenoweth's recollection, the plaintiff was only ever a consultant. Chenoweth deposes that McCarroll was never a director of the defendant and only the company secretary. Chenoweth also deposes that as a director of the defendant he did not receive the director's fees and is not aware of any agreement or resolution of the defendant by which the director's became entitled to the fees.
The law on O 14 Rules of the Supreme Court
16 The plaintiff carries the burden of persuading the court that their claim is good and that there is no defence to that claim. The power to order summary judgment should be exercised with great care, and should not be exercised unless there is no real question to be tried. Where the plaintiff satisfies the court there is a prima facie right to judgment, there is an evidentiary burden on the defendant to satisfy the court why judgment should not be entered.
Analysis
17 Both Hodge and Chenoweth depose they are authorised to swear their affidavits however they do not swear that they have reviewed or considered the company documentation. There is no statement by either of the parties that they have taken the time to examine the minutes of the books of the defendant company.
18 Hodge merely states that he had not seen the letter of 30 June prior to August 2006 – as well as saying McCarroll did not have authority. It is apparent that Hodge has not taken the time to inform himself of the minutes of the directors meeting during this period. Hodge says that he has not seen any minutes yet the affidavit of the plaintiff sworn 26 June 2007 would suggest that minutes are in existence.
(Page 6)
19 The plaintiff without more would be entitled to accept that McCarroll was authorised to sign a letter of employment – See Donato v Legion Cabs(Trading) Co-operative Society Ltd [1966] 2 NSWR 583 and Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711.
20 There is nothing in Hodges affidavit nor Chenoweth's affidavit other than a bare denial. There is compelling evidence in the plaintiff's affidavit to lead to the conclusion that an offer for employment was made. The unsigned minutes at the board's meetings are supported by the contemporaneous notes made by the plaintiff who was present at the board meeting. Both Hodge and Chenoweth have not put anything before me to discharge their burden that there is an arguable case.
21 As for the director's fees in my opinion there is an arguable issue on this point. The resolutions passed by the directors would appear to be confined only to the issuance of shares to the directors. I am not persuaded that the plaintiff has discharged his burden to show that there is a prima facie case on the issue of director fees.
Conclusion
22 By reason of the forgoing I give judgment to the plaintiff in the sum of $55,097.
23 In relation to the balance of the plaintiff's claim there is leave to the defendant to defend.
24 I will hear from counsel as to the form of orders and costs.
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