172 For his part, Mr Boyd denied any such arrangement ever having been agreed. On his version, in June 2003, Mr Boyd was prepared to wait for payment, given the difficulties the business was then confronting and the assurances he received from Mr Ludwig, who was then refinancing. He assured Mr Boyd that new contracts were in the pipeline. Mr Boyd's version was that he was never informed of what Mr Ludwig planned to do with the business, before he was told that Maxx Implementation had ceased operating it in June 2003. While surprised when the business was transferred to Maxx, with Mr Ludwig's assurances, he agreed to continue, anticipating that cash flow would improve. Otherwise, he never agreed to the terms Mr Ludwig claimed.
173 This issue is one which must be resolved on the basis of credit. I have already discussed the considerable problems with Mr Ludwig's evidence. Mr Boyd's credit was also attacked. I accept that there were certain difficulties with what his evidence revealed, particularly in relation to the understatement of the value of the motor vehicle transferred to him in 1997. Nor would I have described him as a co-operative witness. Neither, however, was Mr Ludwig. Overall, I am satisfied that the type of difficulty apparent in Mr Ludwig's evidence, which I have earlier described, could not be found in that given by Mr Boyd.
174 Having given this matter careful consideration, I have concluded that I am simply unable to prefer Mr Ludwig's evidence over that of Mr Boyd, in relation to this matter. Mr Ludwig's version of what was agreed, was so implausibly to his advantage and to Mr Boyd's disadvantage, that I am unable to conclude, over Mr Boyd's denials, that was what he agreed. Had I come to any other conclusion, the unfairness of this aspect of the arrangement would only have been reinforced.
175 Several other matters reinforced the conclusion which I came to. Mr Ludwig claimed that this agreement was but a reversion to the arrangement he had with Mr Boyd in 1996 and early 1997. In 2003, he and Mr Boyd were again content to wait to negotiate what should happen in future, once Maxx's cash flow improved.
176 There were several difficulties with this version of what had occurred, including, importantly, that Mr Boyd also denied that he had made such an agreement in 1996. Other evidence confirmed that this was not the basis of the initial arrangement made between Mr Ludwig and Mr Boyd, at that time. While Mr Boyd plainly accepted in 1996, that he would have to wait for cash flow to improve, before he could be paid what was owing to him by Maxx Implementation, he never agreed that he would not be paid at all.
177 The invoices in evidence showed that Mr Boyd claimed payment for the work which he began to perform in 1996, as well as expenses which he then incurred, before it was agreed in April 1997, that he would begin receiving $3,000 per week salary. Mr Boyd claimed these invoices were later settled by the transfer of a car in 1997. Mr Ludwig denied this, but the evidence showed that he had himself executed a transfer of the vehicle to Mr Boyd in 1997. I am unable to accept Mr Ludwig's version of events. His explanation for how it was that the transfer to Mr Boyd came to be signed almost three years before he claimed that the 'loan of the car', had resulted in a transfer in 2000, with a resulting adjustment to profit, was that he had signed the transfer form in 1997 blank, and he had left it in the car, before he went overseas, because he was then selling the car. This was a rather implausible explanation. Even if it were correct, why would Mr Ludwig not have asked Mr Boyd to give him that transfer back, if he was only loaning him the car? Mr Ludwig did not suggest that he had continued paying the registration fees thereafter, although he claimed that he paid insurance. There was no evidence of such a payment having been made. A more likely explanation was, as Mr Boyd claimed, that the car was transferred to him in 1997, in settlement of Mr Boyd's outstanding claims for payment for the work he had earlier performed for Maxx Implementation, which otherwise remained unpaid.
178 Mr Boyd also denied that he had made an agreement in 2003, that he would work for no pay. He accepted that he had then agreed to wait for payment, initially until Maxx Implementation's cash flow improved and then that of Maxx, but not that he would not be paid at all. I accept that evidence. Not only is it consistent with common sense, it is consistent with the parties' dealings with each other, from the outset of this relationship and with contemporaneous documents, including those generated by the respondents. To Mr Ludwig's knowledge, Mr Boyd continued providing salary claim forms in the normal way, to Ms Grove after July 2003. Neither Mr Ludwig nor Ms Grove suggested he had no basis upon which to make that claim. Mr Boyd pursued both Ms Grove and Mr Ludwig about payment. It was not forthcoming, but that did not establish that there was no right to such payment.
179 Also of relevance is the evidence that, given the way in which Mr Ludwig had operated the business over the years, cash flow difficulties had arisen on more than one occasion. As a result, Mr Boyd had also agreed to delays in payment of profit shares due to him at various prior times. I accept that was what he again agreed in 2003, albeit at that point, a delay in relation to salary and expenses.
180 It is convenient to observe that had I come to a different conclusion, I would have found an agreement to work for no pay at all, the result when Maxx's cash flow had not improved prior to the termination of the relationship, on Mr Ludwig's version of the arrangement, entirely unfair. Other employees were not treated in that way and on Ms Grove's evidence, Maxx's affairs were operated on a basis which ensured cash flow to Mr Ludwig, while he and Mr Boyd worked together to chase work for Maxx. The way Mr Boyd was treated was, on any view, unfair. Of all of those employed in, or involved in this business, only Mr Boyd was paid nothing. Mr Ludwig's treatment of Mr Boyd plainly became unconscionable.
181 In fact, what the evidence finally suggested, was a conscious plan on Mr Ludwig's part, to ease Mr Boyd out of the business, while retaining his services, unpaid, while more work was pursued for Maxx. Mr Ludwig claimed that Mr Boyd had initiated discussions about his early retirement, which Mr Boyd denied, although agreeing the possibility had been discussed. The evidence showed that it was something which Mr Ludwig was actively considering. Earlier in 2003, he had Ms Grove prepare various scenarios, involving significant investment payments to Mr Boyd. These scenarios all depended on cash flow improving very significantly, a problem for Mr Ludwig at the time. There was no suggestion that Mr Ludwig gave this document to Mr Boyd.
182 It appears that having made these calculations, instead of pursuing such discussions with Mr Boyd, Mr Ludwig then embarked on a different course. He brought Maxx Implementation's activities to a halt, later claiming that its business had ceased one day and that Maxx had commenced a different business the next. Thereby, Mr Ludwig ensured that there was no need to pay Mr Boyd or Finger Limeing Good, anything for their entitlement to a share of the profits of the business. It also enabled him to claim that not only was Mr Boyd not to be paid at all for the work he performed for Maxx, he was not an employee of Maxx and had no entitlement to a share of the new business it established and pursued.
183 By October 2003, Mr Boyd had been paid no salary for some four months and was having ongoing problems in having the expenses he had incurred, repaid. Again, Mr Ludwig's own explanation of his approach to Mr Boyd, was revealing. Mr Ludwig's evidence was that he told Mr Boyd 'he had rocks in his head', if he thought he was going to be paid; he expressed outrage, when Mr Boyd later sought payment of his outstanding expenses from Ms Grove, eventually promising to pay them off at the rate of $1,000 per week, but then failing to do so. Mr Ludwig then reacted with further outrage, at Mr Boyd's pursuit of that payment with Ms Grove, when the payments were not made.
184 There was no doubt on the evidence that Mr Ludwig failed to ensure that Maxx met the fundamental obligation which an employer has to an employee, namely payment for the work performed - in a timely way, or at all. While it might be understandable that a person in Mr Boyd's position might agree to a delay in payment, when there is a cash flow problem, Mr Ludwig's treatment of Mr Boyd finally amounted to what can best be described as quite unconscionable exploitation.
Who brought the contract with Maxx to an end ?
185 There is no doubt, that Mr Boyd's employment with Maxx came to an end in October 2003.
186 Mr Boyd claimed that the continuing failure to meet the payments due to him and the way in which Mr Ludwig continued fobbing his enquiries off, ultimately led him to the conclusion in October 2003, that he could no longer work unpaid, incurring expenses for Maxx, which it refused to reimburse. On Mr Ludwig's own evidence, this was what Mr Boyd told him in early October. Mr Boyd also had his solicitor write to Mr Ludwig, seeking discussions to resolve the problem and then himself confirmed his position, by email of 13 October.
187 In his reply, Mr Ludwig still refused to pay Mr Boyd anything and the relationship came to an end. On any view that was as the result of a constructive dismissal, or repudiation by Maxx, given its ongoing failure to pay Mr Boyd his salary, superannuation and expenses; his ongoing pursuit of payment; his agreement to wait while cash flow improved; Mr Ludwig's assurances that the necessary work was in the pipeline, but his ongoing failure to secure the work which would produce that cash flow, which he kept assuring Mr Boyd about; Mr Boyd's advice that he was no longer prepared to work without reimbursement of expenses; and Mr Ludwig's refusal to ensure that Maxx paid Mr Boyd, either salary or expenses.
188 That Mr Boyd may have misjudged the situation is not to the point. It may well have been the case, that had he been prepared to do the work necessary to pursue the Xstrata job on 16 October, while still not being paid, that the Xstrata job might have been secured, resulting in cash flow for Maxx and payment for him. Given the evidence, that this was likely, was not at all certain. Clearly more had to be done, than attending one meeting, before any payments would have been forthcoming from Xstrata.
189 The respondents' case was, nevertheless, that Mr Boyd would, in fact have incurred little further expense, in travelling to Sydney to attend the Xstrata meeting on 16 October and that it was entirely unreasonable that he did not do so, particularly given the short notice which he gave. On the evidence, attending that one meeting was not all that was involved in securing that job, but Mr Ludwig took the view that Mr Boyd's presence was vital, given the work he had undertaken, to prepare Maxx's presentation.
190 In early October, Mr Boyd told Mr Ludwig he could not work any longer unpaid; he was asking Mr Ludwig for his expenses to be met. He was still content however, to wait for salary. In those circumstances, Mr Ludwig's refusal to meet, what he claimed was the little expense then involved in reality, is quite inexplicable, given his own explanation of how vital Mr Boyd's presence at the meeting of 16 October was, to Maxx obtaining work. At that point, it still had no work at all and so no cash flow or profits.
191 On his own evidence, Mr Ludwig had been told of Mr Boyd's position in early October. Had he been prepared to pay Mr Boyd's outstanding expenses, Mr Boyd was prepared to continue, under this extraordinary arrangement. It was Mr Ludwig who was unprepared to treat Mr Boyd in the ordinary way that all employees are entitled to be treated and how others were being treated, namely by Maxx paying expenses incurred on its behalf, let alone paying Mr Boyd for his work. That there may have been a dispute as to the basis of some of the expenses being claimed and whether all of them were then due to be paid, seems to be somewhat beside the point. For example, on the evidence, all of Mr Boyd's telephone expenses had previously been met, but now Mr Ludwig claimed to be entitled to a breakdown, before any payment was made. He also claimed that Mr Boyd was being unreasonable in insisting on payment then, because Maxx was paying its bills only when they were due and some of the expenses Mr Boyd wanted paid, were not yet due.
192 These, it seems to me, are all concerns which seek to justify Maxx's ongoing failure to pay Mr Boyd's expenses, even having earlier promised that they would be paid off at the rate of $1,000 per week, a promise which was not honoured.
193 It cannot sensibly be overlooked that on his own evidence, Mr Ludwig had earlier told Mr Boyd that he had 'rocks in his head' if he thought he would be paid. In truth, given Mr Boyd's claimed pivotal role in securing Maxx the Xstrata job, Mr Ludwig's attitude was inexplicable, unless designed to ensure that the relationship was brought to an end. He was well aware that Mr Boyd was not prepared to incur further expenses for Maxx and so would not attend, unless his outstanding expenses were met. Mr Ludwig refused to meet that demand, sending an email, which was a blunt refusal, even though otherwise difficult to understand, given how it was couched. Mr Ludwig plainly knew Mr Boyd would no longer accept a refusal to pay those expenses. The consequence was undoubted. If the meeting on 16 October went ahead, it would be without Mr Boyd. Nevertheless, Mr Ludwig did not himself prepare to make the presentation, nor did he take any steps to rearrange the time of the meeting, or to otherwise prepare Maxx for it.
194 What was clear, on the evidence, was that it was Mr Ludwig's actions which permitted the respondents to later claim that it was Mr Boyd who brought the relationship to an end. On the evidence, it was plain that it was what Mr Ludwig did and failed to do, which brought this relationship to its final end and which resulted in Maxx not being in a position to make the presentation to Xstrata. The evidence suggested that outcome was both known, and finally sought by Mr Ludwig.
195 On the well settled approach discussed in Allison v Bega Valley Council (1995) 63 IR 68 at 72-3, there can be no doubt that the contract between Mr Boyd and Maxx was brought to an end as the result of steps which Mr Ludwig took. Maxx was the real and effective initiator of that termination. In reality, Maxx repudiated the contract, by Mr Ludwig's continuing refusal to pay Mr Boyd. That repudiation was accepted.