Charlotte Brown & Anor v Image Clothing Pty Ltd & Ors

Industrial Relations Commission of New South Wales in Court Session

CITATION : Charlotte Brown & Anor v Image Clothing Pty Ltd & Ors [2000] NSWIRComm 93 FIRST APPLICANT: Charlotte Anne Brown

SECOND APPLICANT: Charlie Brown Pty Limited

PARTIES : FIRST RESPONDENT: Alan Myer Green

SECOND RESPONDENT: Image Clothing Pty Limited

THIRD RESPONDENT: Ecroblack Pty Limited FILE NUMBER: CT1166 of 1995 CORAM: Schmidt J CATCHWORDS : Unfair contract - proceedings determined in accordance with Industrial Relations Act 1991- termination of employment - question of the truthfulness of evidence - consultancy agreement - probationary period - summary dismissal - interest in equity - misconduct - concerns re employee's personal relationship - respondents' conduct - employment contract unfair in that it permitted respondent to terminate without cause after one month trial - mitigation - partnership agreement - absence of legal advice - one-sided agreement - loss of opportunity to purchase respondents' interest in partnership - partnership agreement found unfair - did not reflect basis of agreement - valuation of business - competing experts' reports Industrial Relations Act 1991 Industrial Relations Act 1996 LEGISLATION CITED : Industrial Arbitration Act 1940 Fair Trading Act 1987 (NSW) Trade Practices Act 1974 (Cth) Business Names Act 1962 GIO Australia Limited v O'Donnell (1996) 70 IR 1 In re Solicitors (State) Award (No 2) (1996) 72 IR 213 Charlie Brown Pty Limited & Anor -v- Green & Ors, Ecroblack Pty Limited -v- Charlie Brown Pty Limited, Supreme Court of New South Wales (McLelland CJ in Eq, unreported, 26 June 1995) Charlie Brown Pty Limited & Anor v Frumar, Supreme Court of New South Wales (unreported, Studdert J, 20 May 1998) CASES CITED : Harcourt Brace & Co v Cory (1997) 81 IR 321 Day v Lumley Life Limited (1999) 90 IR 70 Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 Avis & Ors v AMP & Ors (unreported, Schmidt J, 13 September 1996) AMP & Anor v Avis & Anor, Avis & Anor v AMP & Anor (unreported, Bauer, Peterson and Marks JJ, 18 December 1997) Agius v Arrow Freightways Pty Ltd [1965] AR (NSW) 77 at 88 HEARING DATES: 11/22/1999; 11/23/1999; 11/24/1999; 11/25/1999; 11/26/1999; 11/29/1999; 11/30/1999; 04/03/2000 DATE OF JUDGMENT: 06/07/2000

APPLICANTS: Mr F Lever of counsel SOLICITORS: Charles G Roth & Co LEGAL REPRESENTATIVES: RESPONDENTS: Mr F Douglas QC with Mr J Stephenson of counsel SOLICITORS: Baker & McKenzie

JUDGMENT:

• 75 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J

MATTER NUMBER CT 1166 OF 1995 CHARLOTTE BROWN AND ANOTHER -v- IMAGE CLOTHING PTY LIMITED AND OTHERS Application under section 275 of the Industrial Relations Act 1991

1 These proceedings were commenced in 1995 by Ms Brown and Charlie Brown Pty Ltd ('Charlie Brown') pursuant to s275 of the Industrial Relations Act 1991 ('the 1991 Act'). Interlocutory judgments as to various matters, were given on 6 August 1996, 2 December 1998 and 30 August 1999. While the parties did not address this question, it seems to be clear that despite the repeal of the 1991 Act and the enactment of the Industrial Relations Act 1996 ('the 1996 Act'), these proceedings must be determined in accordance with the provisions of the 1991 Act. (See GIO Australia Limited v O'Donnell (1996) 70 IR 1 and In re Solicitors (State) Award (No2) (1996) 72 IR 213). I propose to approach the matter on this basis, but note that in this case, in my view, nothing turns on the differences between the two statutory regimes. The same relief would be both available and warranted under either Act.

2 Section 275 of the 1991 Act provided: (1) The Industrial Court may make an order declaring wholly or partly void, or varying, either from its commencement or from some other time, any contract or arrangement or any related condition or collateral arrangement under which a person performs work in any industry if the Industrial Court finds that the contract or arrangement or any related condition or collateral arrangement: (a) is unfair; or (b) is harsh or unconscionable; or (c) is against the public interest; or (d) provides or has provided a total remuneration less than a person performing the work would have received as an employee performing the work; or (e) was designed to, or does, avoid the provisions of an award or former industrial agreement; or (f) was designed to, or does, avoid the provisions of an agreement registered, or contract determination made, under Chapter 6. (2) In considering the question of public interest for the purposes of subsection (1) (c) (but without limiting the generality of the expression "public interest") regard is to be had to the effect that a contract or arrangement, or a series of contracts or arrangements, referred to in subsection (1) has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (3) In making an order under this section, the Industrial Court may make such order as to the payment of money in connection with any contract, arrangement, condition or collateral arrangement declared wholly or partly void, or varied, as the Industrial Court considers just in the circumstances of the case.

3 The relief sought in the further amended summons was: '1. An order declaring wholly or partly void, or varying, either from their commencement or from some other time, the contracts or arrangements under which the first applicant (" Charlotte Brown ") performed work and all related conditions and collateral arrangements and in particular;-

a. the consultancy agreement between; - i. Charlotte Brown, and

pursuant to which Charlotte Brown was retained to design and develop for sale and distribution clothing manufactured by Image Clothing, (" the consultancy agreement "); b. the deed of partnership dated 22 Mach 1993 made between;- i. the third respondent (" Ecroblack "), and

ii. the second applicant (" Charlie Brown "), pursuant to which Charlotte Brown, through her company Charlie Brown, went into partnership with the first respondent (" Alan Green ") through his company Ecroblack, for the retail sale of clothing manufactured by Image Clothing, (" the partnership agreement "). The consultancy agreement and the partnership agreement are hereafter referred to collectively as the " employment agreements ",

except in so far as the employment agreements or any related conditions and collateral arrangements provide for the payment of money to the applicants. 2. In addition, or alternatively to order 1 above, and on the same basis, an order that the respondents reimburse and/or alternatively indemnify the applicants in respect of any and all payments made by the applicants or required to be made by the applicants pursuant to the employment agreements or any related conditions and collateral arrangements, including any legal costs of the respondents which the applicants have or will become liable to pay in connection with any other proceedings between the parties or any one or more of them arising out of their dispute.

3. An order that the respondents pay to the applicants such other moneys in connection with the employment agreements or any related conditions an collateral arrangements as may appear to the court to be just in the circumstances, including interest.

4. An order that the respondents pay the applicants' costs of an incidental to these proceedings.

5. Such further or other relief and such further and other orders as the court may deem just in the circumstances.'

4 The orders sought were: 'A. CONSULTANCEY AGREEMENT/EMPLOYMENT 1. A declaration that the consultancy agreement between Image Clothing Pty Limited and Charlie Brown is an unfair contract, within the meaning of s106 of the Industrial Relations Act. 2. An order that the consultancy agreement be varied to provide:- (a) that it is for a term of twelve months, commencing on 23 June 1994; (b) that it can only be determined by Image Clothing Pty Limited on twelve months' notice on the basis of proven serious misconduct on the part of Charlie Brown; (c) that prior to termination of the consultancy agreement, Image Clothing Pty Limited must advise Charlie Brown of any allegations of serious misconduct justifying termination of the consultancy agreement and provide her with an opportunity to be heard in relation to those allegations; (d) that if the consultancy agreement is terminated on less than twelve months' notice, Charlie Brown be paid twelve months' remuneration and other benefits (including the continued use of a company paid for car) for that twelve month period. 3. Twelve months' pay in lieu of notice based on Charlie Brown's annual salary of $150,000 $150,000.00 4. Loss of eleven months' use of a company car based on Charlie Brown's lease, $897.61 x 11 $9,873.31 5. Holiday pay paid on about 22 June 1994 but refunded upon Charlie Brown entering into the consultancy agreement 7,206.23 $167,079.00

B. PARTNERSHIP AGREEMENT 1. A declaration that the partnership agreement dated 22 March 1993 is a (sic) unfair contract within the meaning of s106 of the Industrial Relations Act. 2. An order that the partnership agreement be varied, so as to provide:- (a) that during the continuation of the partnership, Image Clothing Pty Limited would sell clothing to the partnership shops manufactured under the label "Howard Showers"; (b) that Image Clothing Pty Limited would give the partnership business a discount of 10% off its general wholesale prices for all goods sold to the business; (c) that shops conducted by the partnership would have the exclusive right to use the name "Howard Showers" as the name for its shops; (d) that neither Charlie Brown, nor Alan Green, (or any company associated with him) would charge the partnership business for any work provided by them (or their companies ) in relation to the partnership business; (e) that if either Alan Green/Ecroblack Pty Limited or Charlie Brown/Charlie Brown Pty Limited wished to leave the partnership, then the provisions of clause 13 of the partnership agreement would apply and that the partnership could not be dissolved by one partner without the agreement of the other. 3. Legal costs incurred by Charlie Brown/Charlie Brown Pty Limited in;- (a) the Equity proceedings $144,614.00 (b) the Common Law proceedings against Geoffrey Frumar $76,109.00 4. An indemnity from the respondents for the costs claimed by Alan Myer and Ecroblack Pty Limited in the Equity Proceedings 5. An indemnity against any costs awarded to Geoffrey Frumar in the Common Law proceedings 6. Loss of interest in partnership $641,997.91

Made up as follows:- (a) Value of partnership as at 1/2/99 $822,400.00 (b) Less amount to be paid by Charlie Brown pursuant to clause 13 of the partnership agreement $89,840.00 $732,560.00 (c) Less paid to Charlie Brown Pty Limited by the receiver of the Partnership $90,562.09 641,997.91 7. Loss of adjusted income fro the partnership business following its sale on 1 February 1996 to date based on the partnership financial statement forming part of the Hall Chadwick report of 18 May 1999. (a) financial year to 30/6/95 $295,910.00 less paid : $11,023.00 $284,887.00 (b) financial year to 30/6/96 $261,080.00 less paid $30,667.00 $230,413.00 (c) financial year to 30/6/97 $278,495.00 (d) financial year to 30/6/98 $278,495.00 (e) financial year to 30/6/99 $278,495.00 (f) four months to 31/10/99 ($23,207.91 x 4) $92.832.00

Total: $1,443,617.00 8. Interest on the compensation awarded at Supreme Court rates

The evidence 5 In the applicants' case, evidence was called from the applicant; Mark Patrick, Public Relations Consultant of MPA Pty Limited trading as MP Agency; Janet Sernack, Director of Janet Sernack Design Management Consultants Pty Limited; Warwick Levy, retired Management Consultant; Tanya Harricks, Graphic Designer; Luisa Soncini, Fashion Designer; Mariela Demetriou, Sales and Marketing Consultant for FJ Benjamin Fashions; Cigdem Cimenbicer, Manager of Australasian Textile Clothing Limited; Cheryl Arthur, casual Retail Sales Assistant for Kakadu Clothing; Kara Davis, designer for Gordon Smith Marketing; Danny Avidan, Company Director and Chief Executive Officer of Discovery Clothing Company Pty Limited ('Discovery'); Belinda Wight, Company Director of Real Communication Pty Limited; Leanne Gibbs, retailer; Geoffrey Frumar, solicitor; Robert Elliott, Chartered Accountant. Cheryl Arthur, Kara Davis, Belinda Wight and Leanne Gibbs were not required for cross examination.

6 In the respondents' case evidence was called from Alan Green, Director of Apparel Group Pty Ltd (formerly known as Image Clothing Pty Ltd); Maryanne Drewe, Chief Executive Officer of Apparel Group Pty Ltd; Louise Wohlfiel, Group Accountant; Nila Oreb, Fashion Designer; Georgie Williamson, Fashion Designer; Catherine O'Donnell, Business Consultant; Wilhelm Jansen, Chartered Accountant.

7 The expert report prepared by Mr Elliott had been prepared for these proceedings and those brought against Mr Frumar. The valuations of the shareholding in Charlie Brown Pty Limited related to the latter proceedings and not these. Accordingly, that aspect of Mr Elliott's valuation was not relied upon in these proceedings.

8 The broad circumstances which brought the parties to this Court were that Ms Brown was first employed by Image in late 1987, with responsibility amongst other things for development of a proposed new clothing range, 'Howard Showers'. 9 Howard Showers was launched in 1988 and Ms Brown thereafter performed work in connection with its development, marketing and promotion, as well as in connection with other Image labels. She was the principal designer for the Howard Showers label for some 5 years. 10 Ms Brown was also promoted by Image as the face behind the name Howard Showers, an approach developed by Ms Brown and Mr Patrick, who was engaged by Image in 1992 to give it various marketing advice. As a result of discussions between Ms Brown and Mr Green, Ms Brown's remuneration package was altered on various later occasions to reflect Image's growing success. By 1992, the evidence was that the sale of Howard Showers' garments, for instance, had increased to some $7million and by June 1994 to some $14 million per annum. 11 Over time Ms Brown's involvement in the Image business led her to raise with Mr Green her desire to secure some equity in Image's Howard Showers business. She first raised this in 1991. It was rejected by Mr Green, but her package was altered by the introduction of a 5% commission on Image's profits. On Mr Green's evidence this was designed to give Ms Brown an incentive to having a commitment to increasing Image's profits. 12 In mid-1992, Mr Green and Ms Brown began discussing a partnership for the retailing of the Howard Showers label. These discussions developed over a number of months. Mr Green's evidence was that he was initially reluctant to enter such a venture, because of past unsuccessful experiences in retail. Ms Brown convinced him, however, and a Howard Showers retail shop was later opened in the Queen Victoria building, the lease for which was signed by Ms Brown and Mr Green. 13 In March 1993, Ms Brown and Mr Green entered into a partnership agreement prepared by Mr Green's solicitor. The agreement reflected that the partnership had commenced on 1 March 1993. Ms Brown signed the agreement on 23 March without the benefit of any legal advice. The written partnership agreement, executed by Mr Green and Ms Brown, was later altered by the insertion of Charlie Brown and Ecroblack Pty Ltd as the parties to the agreement and those companies also executed the agreement. 14 The partnership later opened another Howard Showers shop in Melbourne and Ms Green and Mr Brown also registered Howard Showers as a business name in NSW. Both Mr Green and Ms Brown performed work in connection with these stores. 15 In 1994, there was a falling out between Mr Green and Ms Brown, with Ms Brown resigning from her position with Image in June 1994. Further discussions between Mr Green and Ms Brown led to Ms Brown resuming the same duties with Image, but on the basis of a consultancy agreement prepared by Mr Green and accepted by Ms Brown. 16 On 25 July 1994, Mr Green terminated Ms Brown's consultancy agreement without notice or any payment in lieu thereof, in accordance with the terms of the consultancy agreement and on 27 September, Ecroblack served a notice terminating its partnership agreement with Charlie Brown. 17 Proceedings were commenced in the Equity Division of the Supreme Court by Charlie Brown and Ms Brown in October 1994. The respondents were Mr Green, Ecroblack and Image. The relief claimed related to alleged misleading and deceptive conduct in contravention of the Fair Trading Act 1987 (NSW) or the Trade Practices Act, 1974 (Cth) and a declaration that Ecroblack's notice of 27 September 1994 was ineffective to dissolve the partnership. 18 These claims were supported by various representations alleged to have been made by Mr Green, which were also relied upon in these proceedings. 19 Proceedings were then also commenced in the Equity Division of the Supreme Court by Ecroblack. Relevantly, the relief claimed was: '1. A DECLARATION that the partnership between the Plaintiff and the defendant carrying on the business of the retail sale of the designer label 'Howard Showers' clothing (' the Partnership ') was dissolved on 27 September 1994.

2. In the alternative, an ORDER (pursuant to section 35 of the Partnership Act 1892) that the Partnership be dissolved.

3. A DECLARATION that clause 13 of the Deed of Partnership dated 22 March 1993 between the Plaintiff and the Defendant has no application to such dissolution.

4. An ORDER that the business of the Partnership be wound up under the direction of this Court.' 20 On 7 April 1995, orders were made by McLelland CJ in Eq, that various preliminary questions be decided: '1. In 4074/94 : whether Charlie Brown is entitled to any of the relief claimed in sub-paragraphs (i), (ii), (iii), (iiiA) and (iiiB) of paragraph 25 of the amended statement of claim filed 7 December 1994 or any relief to substantially similar effect;

2. In 4136/94: (a) whether Ecroblack is entitled to any of the relief claimed in paragraphs 1, 3 and 4 of the amended summons filed 7 December 1994 or any relief to substantially similar effect, and (b) if so, what (if any) consequential orders should be made.' 21 On 26 June 1995, McLelland CJ in Equity, gave his decision on these preliminary matters noting, at page 4 of his decision, that: 'At the commencement of the hearing counsel for Charlie Brown indicated that no claim for relief was to be pursued based on the Trade Practices Act 1974 or the Fair Trading Act 1987. Consequently, it is no longer necessary to consider the question of Charlie Brown's entitlement to the relief claimed in sub-paragraphs (i), (iiiA) or (iiiB) of paragraph 25 of the amended statement of claim of 7 December 1994 in proceedings 4074/94.'

22 The difficulties which consequently fell to be resolved by McLelland CJ in Eq, included apparent inconsistent provisions in the partnership deed as to the winding up of the partnership. His Honour did not favour the construction of the agreement urged by Ms Brown and Charlie Brown, concluding that it was clause 11, not clause 13 of the agreement which governed the dissolution of the partnership. (Charlie Brown Pty Limited & Anor -v- Green & Ors and Ecroblack Pty Limited -v- Charlie Brown Pty Limited, Supreme Court of New South Wales, McLelland CJ in Eq, Unreported, 26 June 1995). Those clauses provided: '11 Upon the determination of the Partnership as provided for in any provision of this Deed or by any event not otherwise provided for in this Deed or the death or retirement of any Partner, a full and general account shall be taken of the assets, credits, debts and liabilities of the Partnership and of the transactions and dealings of it. With all convenient speed such assets and credits shall be sold, realised and got in and the proceeds applied in paying and discharging the debts, liabilities and expenses of an incidental to the affairs of the business and the winding-up of the Partnership affairs and, subject thereto, in paying to each Partner any unpaid profits which may be due to him or her and his or her share of the capital and the balance, if any, of such proceeds shall be divided between the Partners in their respective proportions of the initial capital of the Partnership. The Partners shall execute, do or concur in all necessary or proper instruments, acts, matters and things for effecting or facilitating the sale, realisation and getting in of the Partnership assets and credits and the due application and division of the proceeds thereof and for their mutual release or indemnity or otherwise. 13 Should either Partner intend to retire or resign from the partnership at any time the following provisions shall apply: (a) he or she shall give not less than three (3) months' notice in writing of his or her intention to retire or resign from the Partnership;

(b) the Partnership shall be determined in relation to the Partner so retiring or resigning at the expiration of the said period of three (3) months or such earlier period as the Partners shall agree;

(c) all the share and interest of such former Partner in the assets of the Partnership shall determine and the remaining Partner shall undertake all the debts liabilities and obligations of the Partnership and indemnify such former Partner in respect of all such debts liabilities and obligations;

(d) the former Partner shall be entitled to be paid in the following manner: (i) if the business of the Partnership has been trading for two (2) or more years the remaining Partner shall pay to the former Partner at the expiration of the said period of three (3) months the sum which represents the amount contribute by the former Partner to the capital of the Partnership from time to time together with interest thereon compounded annually at the rate of ten percentum (10%) per annum plus the sum arrived at by multiplying the former Partner's proporation of the capital contributed to the Partnership by the amount which represents the average of the net profits of the business in respect of the immediately preceding two (2) years prior to the date of the expiration of the notice of retirement or resignation from the Partnership; or (ii) if the business of the Partnership has been trading for less than two (2) years the remaining Partner shall pay to the former Partner at the expiration of the said period of three (3) months the sum which represents the amount contributed by the former Partner to the capital of the Partnership from time to time together with interest thereon compounded annually at the rate of ten percentum (10%) per annum plus the sum arrived at multiplying the former Partner's proportion of the capital contributed to the Partnership by the amount which represents the monthly average of the nett profits of the business from the date of commencement of the Partnership up to the date of expiration of the notice of retirement or resignation from the Partnership; (e) the sum so ascertained in accordance with sub-Clause (d)(i) or (ii) hereof as the case may be shall be paid by the remaining Partner to the former Partner at the expiration of the said notice of retirement or resignation from the Partnership.

23 McLelland CJ in Eq on 14 July 1995, ordered, amongst other things, that various aspects of the relief claimed by Ms Brown and Charlie Brown in their statement of claim be dismissed; declared that the partnership was dissolved on 27 September 1994; that clause 13 of the deed of partnership had no application to the dissolution and ordered that the partnership be wound up under direction of the Court. Ms Brown and Charlie Brown were also ordered to pay the costs of the two proceedings. 24 On 1 September 1995, an amended summons was filed in these proceedings. The relief claimed was supported by representations alleged to have been made by Mr Green to Ms Brown, in similar terms to those asserted in the Supreme Court proceedings. 25 The respondents, by Notice of Motion filed in these proceedings, sought to restrain the applicants from pursuing the representations. When the Notice came on for hearing, the partnership had been wound up and the assets sold pursuant to the Supreme Court's orders. The respondents' outstanding costs in the Supreme Court proceedings had been assessed at some $54,895.99. The applicants' costs in those proceedings exceeded $80,000. 26 The orders made in the interlocutory judgment in this matter of 6 August 1996 were: 'The applicants' claim for relief under section 275 of the Act, which arises out of misrepresentation alleged on the part of Mr Green as to the terms of the partnership agreement entered into between the second applicant and the third respondent, is permanently stayed.'

27 A further interlocutory judgment was given in this matter on 2 December 1998 after the applicants had approached the Court for leave to amend the summons initiating these proceedings. This application was made after two developments. Firstly, Studdert J in the Supreme Court had made orders in favour of the applicants in these proceedings against the solicitor, Mr Frumar, who had acted for Mr Green in drafting the partnership agreement in March 1993. (Charlie Brown Pty Limited & Anor v Frumar (Unreported, 20 May 1998)).

28 The second development was that Cohen J in the Equity Division of the Supreme Court gave the applicants leave to amend the proceedings there earlier dealt with by McLelland CJ in Eq, concluding that there was no abuse of process in permitting the amendments there sought which, in his view, amounted to special circumstances. In that context, I concluded at p10-11 of my further judgment of 2 December 1998, that: 'There is now on foot in the Supreme Court a claim based on alleged representations and promises which are said to have given rise to a collateral contract. Those claims have not been determined. They do not depend upon claims of misrepresentation. It follows that the Anshun principle does not apply to a claim sought to be advanced in these proceedings on a similar footing. Furthermore, it seems to me that there is ample basis in all of the circumstances of this case, for the view to be properly taken that special circumstances now exist which make it appropriate to exercise the discretion which the Court has not to preclude or stay the amendment now sought.

I take that view not only because of the circumstances in which McLelland J originally dismissed the Trade Practices Act and the Fair Trading Act claims and the leave given by Cohen J to amend the statement of claim in those proceedings, but also in the context of the decision given by Studdert J in Frumar. '

29 Accordingly, I ordered that: 'Leave is given to file and serve the Further Amended Summons in these proceedings and the order of 6 August is varied in so far as is necessary to give effect to that leave.'

30 The hearing proceeded on the basis. 31 In the meantime, Ms Brown had sought to establish her own label and Charlie Brown had applied for a trademark in respect of that name and had engaged staff and taken on premises. Ms Brown's efforts to find a backer for her label had failed and in October 1994, Ms Brown had accepted employment with Discovery Pty Ltd. Discovery had later launched a Charlie Brown label under a licensing agreement between it and Charlie Brown. Ms Brown had worked on both the Charlie Brown label and the Lili label for Discovery. No payments were made under the licensing agreement in respect of commission on the profits of those labels. The evidence was that the receipts did not reach the levels specified before the agreement was terminated. 32 Charlie Brown encountered difficulties in obtaining registration of the trademark, which Ms Brown could not afford to pursue. Objections to its registration were made by the proprietors of the Charlie Brown cartoon. This, on Discovery's view, put her in breach of her obligation under the licensing agreement to pursue the registration. Discovery was concerned at the lack of progress being made, given the costs it was incurring in promotion and development of the label. It was agreed that Discovery would take over the pursuit of registration and after it was obtained, in May 1998, Ms Brown and her company assigned their interests in the trademark to Discovery for $1. Ms Brown was then engaged to the proprietor of Discovery, Mr Avidan, whom she subsequently married. 33 Both the Lili and Charlie Brown labels have succeeded in the marketplace, generating significant profits for Discovery. Neither Ms Brown nor Charlie Brown, now have an equity interest in either label or in Discovery.

The parties' respective cases 34 The case advanced by Mr F Lever of counsel for the applicant was that Mr Green had made a number of promises and representations to Ms Brown, while they were discussing the formation of the partnership, which included that: - Image would sell clothing to the partnership at a 10% discount from its general wholesale prices.

• The partnership could use the Howard Showers name as its trading name for shops which it opened.

• These arrangements were to continue while the partnership operated such shops.

• That the shares in the partnership would be 30% for Ms Brown and 70% for Mr Green, with Ms Brown having responsibility for stocking, buying, merchandising, the selection of staff and the marketing within the shops. Mr Green was to be responsible for administration and bookkeeping matters.

• That if either partner did not wish to continue with the partnership, the other could buy out that partner's inertest.

• That the partnership agreement drawn up by Mr Greens' solicitor reflected these arrangements and that Ms Brown could trust him as to this.

35 Ms Brown had a father/daughter relationship with Mr Green at this time, which Mr Green had acknowledged in his evidence and as a result, she had trusted him to meet these promises. As Mr Green had also acknowledged, despite his understanding of Ms Brown's trust in him, he had not treated her in that fashion and had instructed his solicitor to draft a one-sided partnership agreement, which he could and later did manipulate to his advantage. Further, Mr Green took steps to deprive the partnership of the exclusive right to use the Howard Showers name, deceiving Ms Brown as to his steps in relation to this matter. 36 As the result of hard work and long hours which Ms Brown put into the partnership shops, the business grew rapidly in size and value. This work was performed in addition to her duties with Image. 37 During 1994, Ms Brown and Mr Green continued discussing her desire to take an equity position in the Image business. He invited her to put a written proposal to him. He treated her proposal with contempt, in such a way that his conduct, which led to Ms Brown's resignation, amounted to a constructive dismissal. When Ms Brown proposed a new basis for the relationship to Mr Green, he rejected it and she was reinstated on essentially the same terms, but the relationship was described as a consultancy with new provisions as to termination, which were unfair to her. 38 In accordance with that new arrangement, Ms Brown was summarily dismissed at the conclusion of an evaluation period Mr Green had imposed, when there were no grounds for the view that the evaluation period had been unsuccessful, or that there was any reason for Mr Green to have no trust in Ms Brown. 39 During the hearing, a number of vague matters were pointed to, in order to justify the termination. They included an allegation that Ms Brown's accountants could not have produced a business plan for her new business by August 1994, without having commenced work on the plan before the termination of employment; an allegation that Ms Brown had made arrangements with Mr Avidan to transfer her services to Discovery; that after termination she did not return certain property to Image; and that prior to the termination she had taken steps to set up her own label and produce her own range. 40 These allegations had not been made out in the evidence, because there was no basis for them. Much of what was alleged related to assistance which Ms Brown was said to have given to the designer of Discovery's new Lili label, Ms Georgie Williamson during her employment with Image. Ms Williamson's own evidence had demonstrated that the assistance she had received from Ms Brown was such that this matter should never have been raised in the proceedings. 41 The evidence demonstrated that Ms Brown had not given Discovery any confidential Image information and that the Discovery and Image labels did not compete in any meaningful way. 42 It was submitted that the Court would not accept the evidence of Mr Green and would also note the way in which Mr Green had given his evidence in cross examination, designed to ensure that he did not answer any question which he thought might be damaging to his case. 43 Mr Green had deceived Ms Brown during the conduct of the partnership, by depriving the partnership of its exclusive right to use the name Howard Showers for its retail shops. The correspondence which Mr Green had sent to the partnership, without providing Ms Brown a copy; the documents he had her sign as to the business name registration and the way he had then used them for a different purpose, namely the registration of the business name thereafter in the name of Image, rather than in the names of Charlie Brown and Ecroblack, all demonstrated his manipulation of Ms Brown, to his own advantage. The effect of the steps taken was to put Image in a position, as Mr Green conceded, of being able to withdraw the whole basis of the partnership, whenever he liked. He was aided in this conduct by Ms Drewe, who was conscious of the steps taken and their affect upon the partnership. 44 Not only was this conduct unfair, it was in breach of the fiduciary duties which Ecroblack owed to the partnership. The steps were taken in order to diminish the value of the business of the partnership, which Image eventually bought from the receiver. 45 As to the termination of the partnership agreement, it was submitted that Mr Green had set in train a chain of events which had the effect of substantially diminishing the value of the partnership and the business it conducted. This included, on 18 August unilaterally: - demanding that Ms Brown contribute some $9,271 in order to 'maintain partner's equity account balances', yet failing himself to contribute the $31,729 he was bound to contribute on that basis.

• introducing a $6084 management fee to be charged by Image in future. He conceded in his evidence the effect of this was to transfer about $72,000 per annum from the partnership to Ecroblack.

• withdrawing the partnerships' 10% trade discount.

46 In cross examination, Mr Green had conceded that these steps had had an adverse impact upon the partnership. Ms Brown's concerns about this could well be understood. Mr Green took no steps in 1994 to acquire Ms Brown's interest in the partnership on the basis he had earlier discussed with her, had refused to answer her letters in August and September and had then appointed a receiver. During this time, Mr Green was running the two shops and overstocked them with out-of-date Howard Showers garments. Profits declined after September 1994 and after all of the costs and losses resulting from his management, which included later taking additional space in the QVB building without Ms Brown's consent, and the appointment of the receiver, Image bought the partnership business in February 1996. 47 In October 1994, Ms Brown and her company commenced proceedings in the Supreme Court in relation to Ecroblack's purported termination of the partnership. Ecroblack also commenced proceedings, which concerned the terms of the partnership agreement Mr Green's solicitor had drawn up. The result of the proceedings had the effect of depriving Ms Brown and her company of the benefits they would have received if they had been permitted to purchase the business as Ms Brown understood the agreement provided. 48 When the business was sold by the receiver, its value had been diminished by the steps taken by Mr Green and his company. The conduct of the respondents was unfair, harsh and unconscionable and had the benefit of depriving Ms Brown of all of the work which she had performed to establish and build up the partnership business. Had she been permitted to purchase the business on the agreed terms, she would have had to pay $98,840. It would now be worth $822,400 and she would have received income in the meantime. Instead, in February 1996 she received $90,562.08 for her share from the receiver. 49 It followed that in those circumstances, the Court would make the orders sought, accepting the approach of the expert evidence called by Ms Brown and rejecting the approach adopted by the expert called by Mr Green. As to mitigation, it was submitted that the Court would not accept the respondents' submission that in reality Ms Brown had lost nothing. A comparison of her earnings from Image and those from Discovery demonstrated that she was still not making the same level of income. 50 The evidence demonstrated that Ms Brown worked to re-establish herself after her dismissal. She spent considerable sums on obtaining legal advice in relation to her dismissal and the partnership matters. She also paid for the assistance of her accountant in finding a backer for the label she sought to establish. She applied for a trademark of the Charlie Brown name, but after she took up employment with Discovery, having been unsuccessful in obtaining a backer, assigned the trademark to it, in what would be accepted was an arms length arrangement. 51 It was submitted that the Court would not proceed on the basis that Ms Brown had an interest in her husband's assets so as to enable the respondents to benefit thereby, on a mitigation basis. 52 The case advanced for the respondents by Mr F Douglas QC and Mr J Stephenson of counsel, was that it had been demonstrated that Ms Brown, despite her success with Image and Howard Showers, had always had ambitions to start her own clothing label under her own name. She also had ambitions to obtain equity in the Howard Showers business, culminating in the presentation of a draft heads of agreement, the rejection of which had led to her resignation from Image in June 1994. 53 Ms Brown's relationship with Mr Avidan was 'centrally important' to the circumstances in which she had left her employment and whether she was entitled to compensation in these proceedings. The respondents' case was that shortly after she met him, which was in January 1993, although her relationship did not commence until December 1993, she began assisting Mr Avidan with his business, Discovery. 54 It was further submitted that by February 1994, Ms Brown had commenced consulting to Discovery, by assisting in the development of the new Lili label, including picking the design team, conceptualising the marketing strategy and coordinating the designs. This was misconduct, as was other later conduct, such as taking with her style sheets and photocopied fabric modules after her dismissal; developing her own label while still employed by Image; gathering together financial information necessary for an investor; and disclosing to Mr Avidan, Howard Showers' retail projections for the year ending 30 June 1995. 55 These matters demonstrated that Mr Green's suspicions regarding Ms Brown's trustworthiness were well founded. They sprang from comments made to him by other employees, as to Ms Brown's relationship with Mr Avidan. 56 While Ms Brown may have initially wished to develop the Charlie Brown label within the Image group, the evidence disclosed that she was only prepared to do so on her own terms. Once they were not accepted she sought to go her own way, even proposing a part-time consultancy when she sought to re-establish her relationship with Image after her resignation. 57 The consultancy was a second chance for Ms Brown, which Image was not obliged to give her. Mr Green made it plain that she would have to rebuild trust, which she had broken. Ms Brown's promised loyalty was not forthcoming and it followed that no relief would be granted to her, because there had been proven serious misconduct on her part, albeit some of the facts were not known to the respondents at the time of termination. 58 As to the partnership, the case advanced was that none of the representations relied upon by Ms Brown had been made out on the evidence. As to the 10% discount, the only real issue was the duration of the arrangement. Ms Brown's evidence demonstrated that she did not understand Image to be bound in perpetuity to continue the discount, regardless of who the proprietors might be. It was only relevant in so far as its removal affected profits. In this regard, it was relevant that the receiver reintroduced the discount in calculating the earnings potential of the business. 59 As to the business name registration, it was relevant that the partnership agreement was silent as to this matter, although the recitals contemplated the use of the name. There was no evidence that it was intended that the partnership would become the registered owner of the trademark Howard Showers. Ms Brown did not understand that the partnership could assign the name to a third party. Ownership of a business name did not confer proprietary rights. So much was made clear by the Certificate of Registration itself. The effect of the registration was that the registrant did not commit an offence if they carried on business under that name. It followed that the only rights which the partnership had was to use the name in its retail outlet. 60 While criticisms were made of Mr Green as to the circumstances in which the original registration of the business name was transferred to Image, what was done was consistent with this legal analysis. While Image purported to unilaterally adopt a position whereby it could withdraw permission from the partnership to use the name at any time, such a position might have had no legal effect and, in any event, was never acted upon. In those circumstances, the explanations offered as to what was done should be accepted. 61 As to the claim that it had been agreed that neither Ms Brown nor Mr Green would charge the partnership for their services, it was accepted that this was the position until the parties' relationship broke down. It could not be the situation that no matter what the facts and circumstances, the partnership effectively had a right to require Image to provide management for the partnership without a fee. The only relevance of this matter was the effect it had on profits, a matter for which allowance had been made in both expert's reports. 62 As to legal advice, it was plain that the situation was such that both parties should have had independent advice. The agreement should also have been more appropriately drafted. Nevertheless, criticism of the absence of legal advice had to be considered in the light of the understanding of the parties. Monetary compensation would not flow simply because the absence of legal advice was capable of causing unfairness, the unfairness must be demonstrated and real. 63 The evidence was that Ms Brown understood that if one partner or the other did not wish to continue, then he or she could be bought out at a fair price. She accepted that the price which she in fact obtained from the receiver was fair. Ms Brown's concerns about the legal costs which she had incurred flowed from her own pursuit of relief in the Supreme Court and not from the respondents' appointment of a receiver. 64 It was relevant that Ms Brown had the benefit of legal advice in those proceedings. The costs incurred as a result should be born by the applicants and not the respondents. They were the result of an attempt to achieve a result inconsistent with the intention and understanding of the parties, which was capable of causing unfairness to Mr Green. 65 As to the claim in relation to the proceedings brought against Mr Frumar, Mr Green's solicitor, it was evident that they would have been unnecessary if Ms Brown had expeditiously pursued these proceedings in this Court. If that remedy had proved inadequate, she could then have proceeded against Mr Frumar. If Ms Brown obtained an order for damages against Mr Frumar, she would also receive a costs order. If not successful, she should have to pay the penalty for having pursed a multiplicity of proceedings. Any other approach would encourage a multiplicity of proceedings, with the application in this court dependent upon the success or failure of those actions. 66 As to the monetary orders claimed, it was submitted that the interest lost was the net present value of the partnership, which it would be inappropriate to allow together with a claim for loss of income. The Court would also have regard to the amount of the claim itself - in excess of $2million, in the exercise of discretion in determining whether to grant relief. 67 While competing experts' reports had been relied upon, the Court would not ignore the valuation of the independent receiver, which was the best measure of what was a fair value. Mr Elliott was not independent and his assessment suffered from being premised upon assumptions as to various entitlements of the partnership, never intended to be assignable assets of the partnership. Various dates were considered, with the first, 27 December 1994 the most relevant, as being the closest to that on which the partnership assets could have been purchased. The later dates were unreliable, because the business had not then been in existence for some time. It was submitted, for a variety of further reasons, that the approach of the respondents' expert would be preferred. 68 It would also not be accepted that the applicants were entitled to be compensated on the assumption that Ms Brown had remained involved in the management of the partnership. In any event, the evidence did not suggest that the level of gross profit was related to her participation in the business. Further account would have to be taken of the fact that Ms Brown would have had less time to devote to the partnership, once her employment with Discovery had commenced. 69 As to mitigation generally, it was perfectly clear that Ms Brown had mitigated her loss, having obtained employment with Discovery, which belonged to Mr Avidan, her present husband. She commenced employment in October 1994 under a deed which entitled her to certain payments in respect of turnover. If turnover of both Charlie Brown and Lili labels were taken into account, it was obvious that Ms Brown was entitled to commission payments much higher than she received. All of these amounts and the payments actually received, would be taken into account. 70 Ms Brown later assigned her trademark to Discovery for $1, in an arrangement which was plainly not at arms length. She had, nevertheless, achieved her ambition of having established her own label and being highly successful and publicly recognised for that achievement. 71 It would also be accepted that Ms Brown had had an opportunity in 1996 to purchase the partnership business from the receiver, but had not done so, when she had a common law duty to mitigate her loss (Harcourt Brace & Co v Cory (1997) 81 IR 321 at 337). It followed that even if Ms Brown was able to be compensated for her loss of opportunity to purchase the respondents' interest in the partnership, regard would be had to the sum for which she could have purchased the interest in 1996. 72 In any event, the evidence demonstrated that Ms Brown's career had not been disadvantaged by the developments which had taken place, with her profile remaining as high as ever, a profile developed while she was an employee of Image. There could be no doubt that had she wished to pursue employment opportunities in organisations other than Image, she would have had no difficulty in doing so.

Consideration 73 This case concerns two separate contracts, the employment contract between Ms Brown and Image and the partnership agreement, initially between Ms Brown and Mr Green and later by substitution, between the two corporate entities. The evidence disclosed that the two contracts were so closely related as to provide a proper basis for the conclusion that they formed one overall arrangement between the two individuals, their two companies and Image. 74 Howsoever viewed, whether as a single arrangement or two separate contracts, I am satisfied on the evidence that the applicants have demonstrated that they were all unfair, as that term was understood under s275 of the 1991 Act, so as to warrant intervention by the Court and the grant of appropriate relief. 75 That conclusion flows both from express terms of the two contracts and from the conduct thereunder of Mr Green and the two corporate respondents, Image and Ecroblack, particularly when acting through Mr Green and Ms Drewe. That conduct threw into stark relief the unfairness of the contracts and arrangement in question, so far as the applicants were concerned. That conduct was not such as to pay any proper, or indeed, any regard to the rights and interests under the two contracts of the applicants, but rather was designed to unfairly advantage the respondents, at the applicants' expense. 76 That approach was taken in circumstances where not only was there a significant and material difference in the parties' respective bargaining power, but where Mr Green was completely conscious of the false impression that Ms Brown was labouring under, namely that he and she had a father/daughter relationship and that he was treating her accordingly. Mr Green's evidence acknowledged this to be the case. His evidence also led to the conclusion that he was consciously manipulating that false impression to his benefit and that of Image and Ecroblack, at a time when he did not, and did not intend to, treat Ms Brown on such a basis. 77 This conduct was plainly inconsistent with the approach discussed by Hungerford J in Day v Lumley Life Limited (1999) 90 IR 70 at 71, later approved in Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 at 15: 'The employment relationship, I have to say, is a serious relationship with important incidents for both parties to it. It is a consensual relationship based on contract and with respective rights and obligations. It should not, I think, operate, or to be so seen, in practice in a way which permits one party, here the employer, to act in a one-sided manner contrary to the legitimate expectations and understandings of the other party, here the employee, and particularly where such action damages or detrimentally affects the career interests of the employee. Employees have a corresponding duty to act with fidelity and good faith.'

78 It is pertinent to deal at this point, with the submission put for the respondents, that the Court would take account, in the exercise of its discretion, the amount of the claim advanced. That is a submission which I reject. It suggests that there is some upper limit beyond which the Court would not grant relief to an applicant who had otherwise made out a case. Such an approach is inconsistent with the statutory framework, no such limit having been imposed by the Parliament. It also suggests that an applicant disadvantaged to a greater extent, in monetary terms, is less entitled to relief under the section if a case is made out, than an applicant who had in monetary terms suffered a lesser unfairness. The proposition has to be so stated, for it to be appreciated that it must be rejected. If it were correct, it would seemingly encourage wrongdoing. 79 Such an approach would also be quite contrary to the longstanding approach of the Court and its predecessors to s106 and its predecessors, including s88F of the Industrial Arbitration Act 1940. In Agius v Arrow Freightways Pty Ltd [1965] AR (NSW) 77 at 88, it was observed by Beattie J that this latter provision was 'plainly designed to protect citizens from unfair and harsh dealing'. If such dealing is established, the Court must craft relief which is appropriate to the unfairness found, without adopting any arbitrary limitations. In my view, to adopt any other approach might well amount to a constructive refusal to exercise jurisdiction. 80 I turn then to Ms Brown's relationship with Mr Green. Having regard to the evidence as to the circumstances in which the parties' relationship with each other came to an end and the way in which the respondents approached their case, it is necessary to deal with this matter at the outset. 81 The evidence led for the respondents suggested that the termination of both the employment and the partnership grew from Mr Green's disapproval of Ms Brown's relationship with Mr Avidan. This position was indeed maintained, even in the submissions advanced for the respondents at the conclusion of the hearing. 82 It is convenient to deal with the question of the truthfulness of the evidence given by Mr Green and by Ms Drewe at this point. Ms Brown was undoubtedly an employee with both strengths and weaknesses, who enjoyed success at Image, partly as the result of the work of other employees, with whom she worked in a team. She had no hesitation in agreeing with such propositions. Mr Green's evidence in chief, however, was not designed merely to put Ms Brown's evidence as to her own work into its correct perspective, but rather designed to downplay Ms Brown's role at Image and to throw her work performance into a most unflattering light. 83 Two examples suffice to demonstrate the point. On the one hand, Mr Green's evidence was that Ms Brown's duties required her to perform work away from Image's premises, for various reasons, yet on the other he said that she was 'energetic, but she did spend a lot of her time away from Image's premises (whether to travel overseas, to visit clients or to attend publicity functions)' . While the latter evidence was couched in somewhat critical terms, it became obvious from other evidence that her absences from Image's premises on such occasions was in order to attend to her many duties for Image and the partnership. 84 More potentially damaging was Mr Green's evidence that Ms Brown was not a fashion designer, only contributing to the 'design process' at Image and assisting other fashion designers Image employed. This evidence was plainly false and not adhered to in cross examination. It was also completely inconsistent with the evidence of other witnesses, such as Ms Brown, Ms Sernack, Ms Wight, Ms Davis, Ms Cimenbicer and I reject it. 85 Other witnesses disagreed with various aspects of the evidence given in chief by Mr Green, who in many respects did not adhere to his evidence in cross examination. Furthermore, the evidence which Mr Green gave in cross examination on some matters was given in such a way as to provide a proper basis for a concern that there was a real need for caution to be exercised as to his truthfulness. There was also entirely contradictory evidence given by Mr Green on the one hand and by witnesses such as Ms Cimenbicer and Mr Patrick on the other, on a number of important matters. Having seen and heard this evidence being given and having given these matters careful consideration, I have concluded that Mr Green's evidence was not reliable and in so far as it conflicted with that of any other witness, I am unable to accept his evidence in preference to theirs. In particular, I prefer the evidence of Ms Brown, Mr Patrick and Ms Cimenbicer, over that of Mr Green, in the case of conflict. 86 The evidence given by Ms Drewe suffered from similar deficiencies. Her evidence was also inconsistent with the view that Ms Brown was a successful designer and a valued employee of Image. Her evidence in chief was for example, that Ms Brown 'was disruptive and often offensive to other staff', 'often late for work or absent from the office for many hours during the day, such that other employees' work was held up while still waiting for her return or arrival', 'lacked a basic understanding of accounts, costing, budgeting, and business operations', 'could not draw and lacked a technical knowledge of fabrics, such that she was not able to design garments without assistance'; 'relied very heavily on Image's production and design staff to assess whether these ideas were practical' and 'was very lax in completing required paperwork.' 87 I reject this evidence as representing either a fair or accurate picture of Ms Brown. It was inconsistent with Ms Brown's evidence and that of other applicant witnesses such as Ms Sernack, Ms Harricks, Ms Cimenbicer and Ms Wight. These witnesses gave evidence, for example, as to Ms Brown's hard work and long hours at night and on weekends, performing the design work it was denied that she had responsibility for and interacting with staff in a way contrary to Ms Drewe's evidence. In many respects Ms Drewe's evidence was also inconsistent with Mr Green's evidence, particularly that given in cross examination and with the history of Ms Brown's continued promotion and reward for good performance by Image during her employment and the success Image enjoyed while she was employed, especially in relation to the Howard Showers label. Ms Drewe also resiled from some of her evidence in cross examination. Her evidence was plainly designed to damage Ms Brown and like the evidence of Mr Green, must also be approached with caution. I have concluded that where her evidence conflicts with that of other witnesses, it cannot be preferred. 88 Mr Green's evidence was that Discovery is a major manufacturer, wholesaler and retailer of women's clothing throughout Australia and New Zealand and with more extensive operations than those of Image. Mr Green said 'In particular, Discovery is a competitor of Image in the market place and the Charlie Brown label is a competitor of Howard Showers.' Ms Drewe gave evidence to similar effect. I reject that evidence. 89 In this respect, I accept the evidence of witnesses such as Ms Brown, Ms Sernack, Ms Cimenbicer, Mr Patrick, Ms Wight and Ms Demetriou. Ms Sernack's evidence was particularly compelling, given the consultancy work which she had been engaged to provide for Image and her undeniable expertise in this field. I particularly reject Mr Green's disparagement of Ms Sernack's evidence. 90 Ms Sernack's evidence was that some manufacturers in the clothing industry, in her experience, regard all other manufacturers as competitors, even when in reality there was no competition between them. The evidence in this case demonstrated that Mr Green and Image fell into such a category. Ms Brown took up employment with Discovery in October 1994, after her dismissal by Image in July and the dissolution of the partnership in September. I find that prior to the later launch of the Charlie Brown label by Discovery, Image and Discovery, while both operating in the women's wear market, were not in competition with each other in that marketplace, given the labels which they were then producing. This was the case even when Discovery launched the Lili label in early 1994. The labels were directed at different market segments, reflected not only in the age and size of the customers at which the respective labels were directed, but also in the design and quality of the garments, their pricing, their marketing and promotion, the retailers who sold the labels and how such retailers sold them in their stores 91 I also note that Ms Sernack even doubted the real extent of any competition between the Howard Showers and Charlie Brown labels, given the direction taken by Howard Showers after Ms Brown's departure and the way in which the Charlie Brown label developed. This view was consistent with the fact that Image retained Mr Patrick's services as a publicist for Howard Showers until 1997, long after the Charlie Brown label was launched by Discovery. 92 There was no evidence of any other relevant competition between these companies, or between Mr Green and Mr Avidan, prior to the launch of the Charlie Brown label. The highest at which any prior competition could be put, was that given that Image and Discovery were both producing women's wear labels, real potential for competition existed, which had the prospect of becoming a reality when the Charlie Brown label was launched by Discovery. 93 Mr Green's evidence was that Ms Brown told him in early 1994 that she had started dating Mr Avidan. He warned her about Mr Avidan's reputation and told her that 'I'd prefer it if you didn't go out with him at all. But if you are going to, please don't forget that you are an employee of Image and that you have obligations to the Partnership.' 94 Around that time Mr Green was informed, by Mr Patrick, that Discovery was planning to enter 'the market for younger women's clothes, creating a label specifically for the younger market.' Mr Green's evidence was that he was concerned about this and discussed his concern with Ms Brown, as being a threat to Image. Mr Green said he was also concerned because he believed that Ms Brown had referred Mr Patrick to a competitor. 95 Ms Brown's evidence was that she had also informed Mr Green of the launch of the Lili label and that he was unconcerned. This was consistent with the market segment at which the Lili label was directed. Mr Patrick's evidence was that he informed Mr Green that the new discovery label would not compete with Howard Showers and that Mr Green accepted this, thanking Mr Patrick for informing him. Mr Green thereafter continued to retain Mr Patrick, even after Ms Brown's dismissal and the launch of the Charlie Brown label by Discovery. I accept the evidence of Ms Brown and Mr Patrick as to these matters. Mr Green's conduct was consistent with him having no real concern about Mr Patrick promoting Lili, because Lili and the other Discovery labels did not compete in the market with any Image label. That he was content for Mr Patrick to promote both the Howard Showers and Charlie Brown labels for a number of years, also puts the competition between those labels into its real light. Mr Green's treatment of Mr Patrick over his involvement with Discovery stood in marked contrast to his treatment of Ms Brown. 96 Mr Green's evidence was that between February and June 1994 he had a number of conversations with Ms Brown about his concern as to her relationship with Mr Avidan, telling her that 'Under no circumstances are you to travel overseas with him' and 'He will observe your ability to buy samples for the Howard Showers range and will borrow your skills for his own label.' Mr Green said Ms Brown dismissed these fears with the comment, 'He only makes polyester frocks.' Ms Brown's evidence was that Mr Green did not object to her meeting Mr Avidan overseas until June, during the consultancy period, despite her having earlier told him that she had seen Mr Avidan overseas. Again, I prefer Ms Brown's evidence about these matters. 97 By March, Mr Green was discussing his concerns with Ms Drewe. His evidence was that those concerns were twofold. The first was for Ms Brown's personal well-being and the second, a potential conflict of interest. Ms Drewe's evidence was that Mr Green raised his concerns with her, stating that he did not trust Mr Avidan. She also had a number of discussions with Ms Brown about her relationship with Mr Avidan. Ms Brown made a number of comments to her as to what was occurring with the Lili label. That such discussions were occurring is consistent with the evidence that Ms Brown and Mr Avidan made no secret of their relationship. 98 In April, Ms Drewe raised the possibility with Mr Green that Ms Brown was assisting Mr Avidan with the Lili label. In cross examination, Ms Drewe accepted that her knowledge of Ms Brown's relationship with Mr Avidan derived from that Ms Brown had told her. Mr Green dismissed this concern, taking the view that Ms Brown 'would not actively assist Mr Avidan in a manner contrary to the interests of Image or the Partnership'. On the evidence, there was a sound basis for Mr Green to hold that view, given Ms Brown's interest in the success of Image, Howard Showers and the partnership. It was a view consistent with Ms Brown's conduct and the evidence of other witnesses as to that conduct. 99 Ms Brown's evidence was that her relationship with the respondents began deteriorating about this time, with a refusal by Image to replace her personal assistant, who had resigned. At this time, Mr Green and Ms Drewe often observed Ms Brown travelling home from work with Mr Avidan or he waiting to collect her in the Image carpark. In May or June, Mr Green raised with Ms Drewe the possibility that Mr Avidan was only interested in Ms Brown 'so that he can develop brands for his own business.' 100 Logically, given that Mr Avidan and Discovery, like Ms Brown, Mr Green and Image, were involved in the women's wear clothing industry, a concern that another manufacturer might be interested in luring Ms Brown away from her employment with Image would be understandable, given her success in that industry for Image. The evidence as to the way in which Mr Green, Ms Drewe and Image treated Ms Brown however, together with how in these proceedings they sought to describe Ms Brown's performance at Image and her contribution to its success, suggested that in reality they had no concern about the possibility that Ms Brown would leave Image and no hesitation in dismissing her summarily after she had produced the second Howard Showers summer range in July 1994. 101 On the other hand, the evidence demonstrated that for her part, Ms Brown had no difficulty in differentiating between her personal and business interests. She was very proud of the success of Image and particularly Howard Showers, was conscious of the position she had worked to achieve at Image and in the partnership and well knew that her income reflected the profits of Image and of the partnership, the business of which was expanding. She had an obvious basis for being concerned to ensure that their success continued and worked hard to achieve that end. 102 Ms Brown also had a desire to have Image launch a Charlie Brown label when market conditions were right for that move. The launch of a Charlie Brown label had already been the subject of discussion at Image in 1994, which had then retained Ms Sernack to advise it. The idea had been rejected by Mr Green. I find that Ms Brown's ambition in that respect was not to launch such a label independent of Image, nor was she at that stage interested in launching her own business. Ms Brown's continuing pursuit of an equity position with Image, albeit to Mr Green's annoyance, plainly demonstrated her continuing interest and desire to continue her relationship with Image. 103 That Ms Brown was unaware of the real extent and nature of Mr Green's concern about her relationship with Mr Avidan or the risk which it was posing to her continued employment was evident. On the evidence, I am satisfied that Mr Green did not discuss this concern with her in any real way. He gave no explanation for this failure. 104 It follows that in so far as the respondents' case was advanced on a basis that Ms Brown had acted contrary to her obligations to Image and the partnership in pursing a personal relationship with Mr Avidan, it must be rejected. It cannot be inferred from the mere existence of such a relationship that the participants will act in such a way towards their partner as to advantage the partner and disadvantage their employer or business partner. Indeed, there was evidence of other designers pursuing personal relationships in this industry while employed by different clothing manufacturers, some in competition with each other. There is nothing remarkable about such relationships developing in this or other industries. 105 Nor is there anything remarkable in such people discussing the industry in which they are involved, their personal circumstances and problems or in helping each other, as Ms Brown and Mr Avidan admitted they had done. Nothing in their evidence, or indeed in the evidence advanced by the respondents, provided a proper evidentiary basis for the conclusion that prior to her dismissal Ms Brown was advancing the interests of Mr Avidan and Discovery to the detriment of the respondents or contrary to her obligations to Image and the partnership. 106 What was remarkable, however, was the attitude of Mr Green and Ms Drewe, who plainly acted on the basis of an assumption that Ms Brown must have been acting contrary to the interests, not only of Image and the partnership, but her own financial interests, as the result of her relationship with Mr Avidan. This assumption was made when they had no plausible basis for forming such a view and in circumstances where Ms Brown's prior conduct and continued pursuit of her interests with Image and the partnership, were inconsistent with her acting in such a way. It was an assumption which they made and acted on at a time when the sales of Howard Showers had increased dramatically from $7million in 1992 to $14million by June 1994 and the retail shops the partnership had established were proving successful. 107 I turn then to Ms Brown's pursuit of an equity position. That corporate employers take steps to secure the loyalty of senior and valued employees by providing them with a share in the equity of the business concerned is not an uncommon feature of employment in Australia. Such schemes provide an employee with an obvious added incentive in working towards the continued success of that employer. Indeed, there are plenty of cases brought to this Court which concern the fairness of such arrangements; share and share option schemes are but two examples. That Ms Brown was seeking such an interest in Image or Howard Showers is not a matter which reflects adversely on her at all. 108 That Mr Green and Image were entitled to rebut Ms Brown's desires for equity, is also undoubted and does not, of itself, reflect adversely upon the fairness of the contracts and arrangement here in question. Nevertheless, the conduct of the respondents towards the applicants in relation to this aspect of their relationship cannot be ignored in considering the case which was brought. 109 It is relevant that Mr Green did not reject Ms Brown's desire for an equity position out of hand. When earlier raised, at a time when Ms Brown was considering returning to the United States, following the breakdown of her marriage, Mr Green gave Ms Brown a commission on Image's profits, rather than an equity interest. At that time he was anxious to retain her services. Ms Brown later came to be concerned as to how the Image accounts were being prepared, when increased turnover was not being reflected in commission payments on profits. She was, for instance, told that there had been no profits in the year ending June 1993, despite hugely increasing sales. That position was apparently reversed in the 1994 year, an alteration not explored in these proceedings. Nevertheless, it is relevant that prior to the proceedings Image had refused to give Ms Brown access to Image's accounting records to satisfy herself as to her commission entitlements. 110 I accept Ms Brown's evidence that she pursued her interest in equity, having seen other senior employees depart from Image's employment and having become concerned about their treatment and her own job security, in the context of her own hard work for Image and her personal position, as a single mother raising a young child. I also accept that her desire for equity was in part motivated by her difficult relationship with Ms Drewe, especially over the last period of her employment. Ms Brown's persistence led to two developments. 111 The first was Mr Green's agreement to enter the partnership with Ms Brown to operate Howard Showers retail stores, something to which he was initially opposed when first raised, given his past experiences with unsuccessful retailing ventures. Nevertheless, the stores were a success, with Ms Brown undoubtedly working hard in that business, in addition to her other continuing duties with Image and Mr Green making his own contributions, much of those through the provision of various bookkeeping and management input from other Image staff. 112 The second development was an invitation in 1994 that Ms Brown put a written proposal to Mr Green as to an equity participation in Howard Showers. At this stage, Mr Green had already become concerned that Ms Brown had sought the assistance of an accountant in her negotiations with him over salary in her employment by Image. He viewed this as an interference in his relationship with Ms Brown, consistent with the earlier instructions he had given to his solicitor, Mr Frumar, as to the preparation of the partnership agreement, which he wanted kept simple, not dealing with various matters Mr Frumar raised, because he did not want Ms Brown seeking independent advice. As I have earlier noted Mr Green was by then also concerned about Ms Brown's relationship with Mr Avidan. 113 In cross examination Mr Green said that he invited Ms Brown to give him this proposal, only to 'fob her off'. He had not expected her to obtain assistance to prepare it and was surprised when she did. He preferred the simple type of document Mr Frumar had prepared for the partnership and regarded Ms Brown's proposal as an unreasonable and over the top demand. When Mr Green was presented with the proposal on which Ms Brown had obviously received further advice, he initially threw the proposal back at her, and then told her he had better read it 'since you paid to have it prepared.' Mr Green explained that he threw the document because he was disdainful of the proposal, regarded it as stupid and wanted to insult it. 114 Ms Brown had engaged a solicitor, Mr Roth, to prepare the document. He had been introduced to her by Mr Avidan as someone whose advice Ms Brown could afford. Mr Roth did not act for Discovery. Mr Avidan had also told her something of how Discovery had been structured and had accompanied Ms Brown to a meeting with Mr Roth, where her desire for equity in Image was discussed. Ms Brown's evidence was that the proposal was one which she expected to explore with Mr Green in discussion. She was prepared to negotiate, but that was impossible, given Mr Green's reaction to it. 115 The next day when they met, Mr Green told Ms Brown that 'You can have Howard Showers for $4 million because it is turning over $2.5million in profits. I'll sign a piece of paper here and now if you want to take over the business in two years and pay me $4million'. Ms Brown's reaction was 'This is the last straw, I'm out of here'. 116 It cannot be overlooked that these events took place at a time when Ms Brown had been told that Image had made a significant loss the preceding year, which she had had difficulty accepting given Image's apparent success and when she was being refused access to the company's accounts. 117 The reasons for Mr Green's refusal to entertain Ms Brown's proposal included that he would have to restructure Image to give Ms Brown the type of interest she sought in Howard Showers; that he was not going to give an employee such an interest in a business he had developed over many years and that the proposal, in any event, made unreasonable demands as to Howard Showers' future earnings, which he would have to guarantee. 118 It may be that properly analysed, Ms Brown's proposal was not seeking any such guarantees, but was premised on anticipated growth in turnover of the Howard Showers label. It is, however, unnecessary to explore further its proper construction, given Mr Green's peremptory refusal to discuss what had been put and what then developed as a result. 119 While the language Ms Brown used on the day she said 'I'm out of here', did not necessarily reflect an intention to leave her employment with Image, the parties all acted on that basis. Shortly after their meeting, Ms Drewe instructed Ms Wolfenstein that Ms Brown had left Image's employ and directed her to deposit Ms Brown's outstanding holiday pay into her bank account. The sum of $7,206.23 was accordingly banked, reflecting Image's records as to her outstanding annual leave entitlements. Ms Brown was later asked to repay this when her employment resumed and did so. 120 Ms Brown apologised to Mr Green for her conduct the next day and sought to re-establish her relationship with him. Ms Brown proposed new terms, a consultancy confined to the Howard Showers label on a part-time basis. I accept that she had prepared this proposal with Mr Patrick's assistance and that it reflected a desire on her part to continue a relationship with Image, especially Howard Showers, but also to explore other opportunities to obtain the security she desired, but not in competition with Image. Such a desire was consistent with the continuation of the partnership and also with the evidence of opportunities which Ms Brown believed she might have been able to explore under such an arrangement. It was also consistent with Mr Patrick's evidence. 121 Mr Green rejected this proposal and offered a consultancy on terms which required Ms Brown to perform all of her old work, and also introduced several new terms, including one which was to be of significant advantage to Mr Green, namely a probationary period. The letter provided: 'The period of the consultancy is 6 calender months - commencing 23/6/94. Between 23/6/94 and 23/7/94 an evaluating period will occur. On the 23/7/94 after the evaluating period has been deemed successful both parties will sign the contract. Charlie will receive all salaries, that were paid to her when she as employed, as a monthly consultancy, paid in arears.

122 While it was suggested in the evidence in chief of Mr Green and Ms Drewe, that Ms Brown did not properly perform her work on the resumption of the relationship on these new terms, that evidence must be rejected, having regard to the evidence which they gave in cross examination and that given by Ms Brown and other witnesses. 123 When Ms Brown resumed work, Ms Castella (later known as Ms Demetriou) was employed to assist her. I accept both their evidence that Ms Brown performed the work given to her by Image, working long hours into the night in order to do so. That included work on various labels, including the Howard Showers second summer range; the opening of a new factory store at Birkenhead point; the expansion of the Howard Showers label into children and menswear and discussions about the partnership opening new stores in Melbourne and the Gold Coast. 124 I reject Mr Green's and Ms Drewe's evidence that this work was not performed. They resiled somewhat from that evidence in cross examination. Ms Drewe, for example, acknowledged that while her evidence in chief detailed production work for the launch of the second Howard Showers summer range which Ms Brown had not completed on time, what her affidavit omitted to record was that the range was launched substantially on time, notwithstanding the break in Ms Brown's employment and the difficulties Ms Drewe alluded to. 125 I also accept that Ms Brown's dismissal on 25 July came as a real surprise to her. It resulted from a discussion the preceding week between Mr Green, Ms Drewe and another employee, Ms Ogilvie (then Image's national sales manager), who allegedly called into question Ms Brown's work and loyalty to Image. On Mr Green's evidence, she suggested that Ms Brown had been dishonest, could not be trusted and had not been performing her work for Image, but rather had been spending her time helping Mr Avidan develop his labels and that other employees had been doing her work. None of those allegedly doing so were called to give evidence, nor was Ms Ogilvie, when she declined the respondents' request that she give evidence. Consequently, what she told Mr Green and Ms Drewe and the basis for any view which she might have advanced about Ms Brown is not known. In cross examination, however, Mr Green conceded that Ms Ogilvie did not have any concrete evidence and that she had made serious allegations, based on her perceptions, but gave him no details as to what those perceptions were and was not asked to do so, by either he or Ms Drewe. 126 Mr Green said Ms Drewe supported Ms Ogilvie's concerns. Ms Drewe's evidence was that she also had concerns about Ms Brown's work performance and when Ms Ogilvie raised her concerns, had arranged the meeting with Mr Green. Mr Green told them that the situation was hopeless and that Ms Brown could not be trusted. His evidence was that he had a great fear that Ms Brown was 'trading secrets' with Mr Avidan. He accepted, however, that he had no concrete basis for such fears, even after he had later asked the police to investigate some missing clothing samples. 127 Ms Drewe agreed with Mr Green and together they decided that Ms Brown's employment would be terminated the following Monday. This decision was put into effect on that day, after a photo of Ms Brown and Mr Avidan had been published in the newspaper over the weekend, wrongly identifying them as having married. 128 I accept the evidence of Ms Brown and Mr Avidan, that their relationship had in fact broken down at this time. This was corroborated by Ms Demetriou. On the evidence theirs was a relationship which can perhaps best be described as volatile. It is unnecessary to go into the details, except to say that Ms Brown gave evidence as to the reasons for and circumstances in which this had occurred. I accept that the romantic relationship between Ms Brown and Mr Avidan had broken down between mid-1994 and the end of 1995, even though Mr Avidan and Ms Brown still maintained a friendship and that Mr Avidan provided Ms Brown with support at a time of obvious distress and difficulty for her. 129 The dismissal was effected by Mr Green handing Ms Brown a letter prepared by Mr Frumar, which gave no reasons for the decision. Mr Green's evidence was that he told Ms Brown that: 'I know that you think things have been going smoothly. However, the trust I had hoped for has not been built and therefore I think there is no future for us. You've been dishonest with me Charlie. I know that you are going to travel overseas with Danny Avidan next week, contrary to my instructions, and there are obvious signs that you have been assisting Danny Avidan in Discovery's business. You have done nothing to rebuild the trust which was the essence of having a trial period.'

130 Ms Brown's evidence was that: 'At about 3:00 pm on 25 July 1994 Alan Green asked me to meet him in his office. We had a conversation to the following effect;- He said: "I know you think things have been going smoothly but when I put my bum on the seat over the weekend I felt that there was no future. I just can't give you what you want." He then handed me a letter dated 25 July 1994 from Geoffrey C Frumar & Associates a copy of which is annexed hereto and marked "P". I said nothing. I just shook my head in disbelief. He said: "I want you to finish up right now." After saying that he took me by the arm and escorted me to the back door and out of the premises. I was not able to gather my personal belongings which were kept in my filing cabinet.

131 I prefer Ms Brown's evidence as to these events. Mr Green accepted he had never put to Ms Brown matters such as that she had assisted Discovery, had damaged Image or the partnership or that others had been performing her work. 132 I find that there was no proper or fair basis for Mr Green having terminated Ms Brown's employment in July 1994. The termination was without notice and without payment in lieu of notice, in accordance with the express provisions of the consultancy arrangement devised by Mr Green. Payment for outstanding annual leave was not made on the termination of the employment, even when later pursued by Ms Brown. As to this, Ms Drewe's evidence was that Image's records, as to Ms Brown's annual leave entitlements, were inaccurate and that Ms Brown had taken all of the leave to which she was entitled while working overseas for Image. Ms Brown denied this and in cross examination, Mr Green accepted that he had no reason to believe that this was so or that Image's records, as to Ms Brown's entitlements, were inaccurate. I reject Ms Drewe's evidence as to this issue. There was no basis established for her view, which was inconsistent with that of Mr Green and with the annual leave record maintained by Image in accordance with its statutory obligation. I find that Image had no proper or lawful basis for refusing to make Ms Brown's statutory payments to annual leave on the termination of her employment. 133 I find that this conduct and the contract which permitted this termination were plainly unfair with the meaning of s275 of the 1991 Act. The contract requires variation in the proper exercise of the Commission's discretion to remedy the unfairness so found. The monetary orders which are made must also encompass Ms Brown's outstanding annual leave entitlements. 134 In the circumstances of this employment, the nature of the employment, its seniority, the way in which it had developed over time, Ms Brown's remuneration package (which included commission on profits), the fact that Image continued to obtain the benefits of Ms Brown's work, after the summary termination of her employment to its profit and without proper recompense to her, and the circumstances of the establishment of the consulting arrangement and its termination which I have outlined, I conclude that a period of 12 months' notice would have been a fair basis of termination of this employment. The contract should be varied to so provide. 135 In coming to that view, I have also been influenced by the other element of the arrangement between the parties, namely the partnership, to which I will return.

Later misconduct and mitigation 136 I am unable to conclude that any of the 'information' later discovered by Image as to Ms Brown's conduct prior to her resignation, during the period of the consultancy or after her dismissal, amounts to misconduct which would warrant the Court concluding that the consultancy contract was not unfair or that no discretion to make monetary orders as to this aspect of the claim should be made in favour of the applicants. 137 The respondents defended the claim for notice on the basis that Ms Brown's employment had been terminated for good cause, it also having been demonstrated on the evidence in these proceedings that she had been involved in serious misconduct, having worked on the Lili label for Discovery, since at least February 1994, thereby having been demonstrated to have been in breach of her obligation of fidelity to Image. 138 I reject those submissions. To the contrary, the evidence demonstrated that neither Image, Mr Green nor Ms Drewe had any proper basis for terminating Ms Brown's employment summarily and that position was not altered by what was revealed in these proceedings. 139 I have found that Image and Discovery were not in competition with each other prior to the termination of Ms Brown's employment and that no Image label competed with any Discovery label prior to the establishment of the Charlie Brown label. I also reject the submission that the evidence demonstrated that Ms Brown had been consulting for Discovery since February 1994 on the Lili label. The evidence was that Mr Patrick had conceived the label and worked with Mr Avidan on its establishment and promotion, without assistance from Ms Brown. The evidence of Mr Patrick and Mr Avidan corroborated that of Ms Brown. There was no evidence of any payment having been made by Discovery for such work to Ms Brown, nor was this suggested. 140 Ms Brown's evidence was further corroborated by that of the Lili designer, Ms Williamson. Her oral evidence, which I accept, painted a picture of a young, inexperienced designer, who had made Ms Brown's acquaintance and pursued her for help on occasions when they met. 141 At the highest, what the evidence amounted to was that on occasions Ms Brown went to the premises of Discovery, after work, when she was going out or home with Mr Avidan. Ms O'Donnell and Ms Williamson saw her there. On a handful of occasions, Ms O'Donnell saw them discussing things, such as fabric and clothes samples, but could not hear what was being said. These witnesses also confirmed that Ms Brown did some work for Lili in August, after her dismissal. Ms Gibbs had also seen Ms Brown at Discovery's premises, but had never seen her discussing samples with Mr Avidan. Similar evidence was given by Ms Brown and Ms Davis, who worked closely with Ms Williamson. 142 As to Ms Williamson, it was common ground amongst various witnesses that on one such occasion Ms Brown arrived when Ms Williamson, who was later employed as the designer for Lili, was being interviewed by Mr Avidan. When employed, Ms Williamson, who had newly left design school, found her new job very difficult, given her then inexperience. On some later occasions when she ran into Ms Brown at Discovery's premises or at Mr Avidan's home, she asked her for help which Ms Brown gave. On only one occasion did Mr Avidan ask for Ms Brown's assistance, while he and Ms Williamson were having a serious difficulty with the new range. Ms Brown went to Discovery's premises and spoke to Ms Williamson for a short period, suggesting to her that she had to take certain steps to pull her collection together. Ms Williamson's evidence, which I accept, as to the nature of the assistance she received, was given in re-examination as: 'Q. And you described how Charlie Brown assisted you in relation to that on a couple of occasions. If she hadn't given you that assistance how would you have gone about doing that? A. Well, I would have fumbled my way through it. She didn't help me a lot, she only helped me, these were the only incidents that I remember and they were slight but they did help me because she was very good at it and I was just only in the industry and straight out of college and you know, I sort of needed all the help I could get and Danny didn't know enough about it, so I was very eager to see Charlie whenever I could.

Q. Was there anyone else within the organisation of Discovery who could have provided you with similar assistance? A. Yeah but they, they were sort of more geared towards more conservative types of clothing so I suppose Charlie had much more of an idea than any of the other women in Discovery. But I mean, it was never a case of me ringing up Charlie and saying "Come over". I can remember one time she turned up and she had been at a shoot for Howard Shower(sic) and I dragged her in and said, "What about these prints?" And she said, "Oh, they're no good." I was very eager to, you know, talk with her whenever I could but it's not like she was at my disposal.

Q. But there were a number of cases on which she did provide the sort of assistance? A. The occasions I referred to.'

143 This evidence does not provide a proper basis for a finding that Ms Brown had been working for Discovery while employed by Image, was in breach of her duty to Image or had engaged in any misconduct sufficient to warrant her summary dismissal. 144 The submission that the evidence showed that during the period of the consultancy in June/July 1994, Ms Brown was working on the development of her own label, particularly by the development of a business plan, with the assistance of her accountant, must be considered in a context where Ms Brown had in reality produced all of the work required of her by Image in that period. That Ms Brown took steps to deal with the possibility that she might be dismissed by Image, on her evidence at the end of the 6 month consultancy, is unremarkable in the circumstances in which she then found herself and cannot found a proper basis for a finding of misconduct warranting summary dismissal. 145 I accept that Ms Brown was forced to consider what she would do in the event that the consultancy was terminated by Image. As it transpired, the consultancy was terminated by Image within a month, without notice or any payment and Ms Brown was indeed forced to look for other means of support. 146 As to the complaint that Ms Brown did not return photocopies of some fabric modules and style sheets of past ranges after her dismissal, this needs to be seen for what it was, a complaint about a most trivial matter. Apparently, these items were so unimportant that Image did not notice that Ms Brown, who had the items at her home, had not returned them when she was dismissed. Even when it was discovered during the course of the proceedings that Ms Brown had these items, Image did not seek their return. While Ms Brown conceded that she had been wrong not to return these items, there was no evidence that Ms Brown had made any use of them or that any advantage flowed to the applicants or Discovery from them or any disadvantage to Image. I find no basis for any finding of misconduct in these matters. 147 As to the work which Ms Brown performed in designing her own label, whether that work was performed before or after her dismissal by Image, it is difficult to see in reality what relevance this had to Image, given that she completed the work required of her by Image while her employment continued. Ms Brown denied performing such work. Given the evidence of the work she performed for Image in this period, it is difficult to imagine that she also had time to perform design work on her own label as well. This is also consistent with the evidence of various information later provided to potential backers by Ms Brown and her accountant, as to the stage of readiness of her label, which was inconsistent, and certainly included elements of puffery, which might help explain why investors could not be found. 148 It is relevant that Mr Green had already rejected the idea of Image developing a Charlie Brown label, and Image did not have, nor seek, any restraint from Ms Brown competing with it after her termination. Ms Brown denied performing design work on that label before the consultancy came to an end. Ms Demetriou's evidence corroborated that of Ms Brown. I accept their evidence. 149 I turn then to the establishment of Ms Brown's own business. It cannot be doubted on the evidence that Ms Brown did not herself have the means to establish her own business and needed to seek investors. Having this in mind, I take the view that there was a proper basis for concern that various projections as to the potential sales of a Charlie Brown label, which were used to develop a business plan, the purpose of which was to attract potential investors, were based on information which Ms Brown retained as to planned sales of the Howard Showers range. This was information plainly confidential to Image and was disclosed to a large number of potential backers, including Mr Avidan. Also to be considered, however, was that there was no evidence that Ms Brown's recollection of Image's confidential information had the result that Image suffered any particular damage and that Howard Showers' gross sales information had been released in the past to the public by Ms Brown in public interviews in the press when being promoted by Image as the face behind Howard Showers, without complaint by Image. Such information was obviously not confidential. 150 The business plan was developed from calculations made by Ms Brown's accountant based on Ms Brown's recollection of Howard Showers' average sales price and sales volumes, not Image business records and documents, which she did not have access to. The plan and projections also had regard to Ms Brown's own knowledge of this market and her contacts within the industry. I conclude that Ms Brown was entitled to use this latter information for her own benefit, but not the former. I accept her evidence that Image had also benefited from her personal knowledge of the industry which she brought with her when she joined it and I take the view that this was information which she was entitled both to retain and utilise, either for her own benefit or in new employment after her employment with Image ceased. 151 I have weighed this aspect of the case of the respondents most carefully, particular having in mind the matters which I have concluded have been made out against them. Having done so, I have concluded that the real measure of the use to which any confidential information was wrongly put and the damage Image thereby suffered, was the failure of Ms Brown to attract a backer for her own label. 152 In that endeavour Ms Brown was completely unsuccessful. Despite the work and expense which Ms Brown and her company incurred in seeking to attract various potential backers, those efforts failed completely. In this respect, I accept the evidence of Ms Brown and Ms Demetriou. In October 1994, despite having gone to expense to set up her own business using funds borrowed from her grandmother, a former boyfriend and her ex-husband, including employing staff, leasing premises, obtaining her accountant's assistance and seeking to trademark her name, the venture failed. 153 As a result of her failure, Ms Brown later accepted an offer of employment from Discovery, where she was employed to assist with the Lili label and to produce a new Charlie Brown label and where she was paid a lower salary than she had earned at Image. Image had no proper basis for complaint about that development. Nor did the partnership, which was by that stage at an end, and which in any event, as a result of Mr Green's instructions to Mr Frumar, had no right to preclude a former partner competing with the partnership after exclusion from it. 154 The Charlie Brown label then developed by Discovery may have competed in the marketplace with Howard Showers when it was launched later. At that stage, both Ms Brown and Discovery were free to so compete and no complaint about such competition was advanced in these proceedings. Indeed, it was relied upon in the mitigation argument, which I will deal with later. 155 On the evidence, I am unable to conclude that these developments resulted from anything other than Ms Brown's need to obtain an income in order to support herself and her daughter and Discovery taking the opportunity to employ a successful and talented designer, when Ms Brown did not have the resources to pursue her own business venture. 156 It follows that the respondents' arguments as to misconduct of various kinds must, for these reasons, fail. As to mitigation, applying the approach discussed in Cory to the circumstances of this case, I take the view that it is not appropriate to have regard to Ms Brown's earnings in her later employment by Discovery in calculating monetary orders. If such an approach were to be adopted it would, in my view, also be necessary to give consideration to the sums expended by Ms Brown in seeking to establish her own business. Regard to one aspect without the other would not be to approach the concept of mitigation in circumstances such as these on either a fair or proper basis.

The partnership agreement 157 The partnership came about, as earlier noted, from Ms Brown's persistence with Mr Green, that such a venture between them would be successful. Mr Green was initially not interested in the idea, having already experienced a failed retail venture. On his evidence, at that time he wished to persuade existing retailers to operate Image franchise stores and in early 1992 pursued this idea. By mid-1992, he realised that it was unlikely that such franchises would eventuate and agreed to pursue the idea of Howard Showers shops with Ms Brown. This lead to the opening of the QVB store and in 1994, the Chapel St store in Melbourne. 158 Mr Green's evidence was that he regarded Ms Brown's employment with Image as integral to the partnership which he proposed. He also gave evidence that he hoped that a successful Howard Showers flagship store would convince other retailers that his franchise proposal was worth exploring. I reject that evidence. Not only was this inconsistent with Ms Brown's evidence, but neither of these concepts were incorporated in the partnership agreement, which Mr Green had Mr Frumar prepare. It was also inconsistent with Mr Frumar's evidence as to Mr Green's instructions. 159 Mr Green also gave evidence that he raised with Ms Drewe and Ms Cimenbicer, the possibility of opening retail stores with them. Ms Drewe's evidence was that she had rejected this proposal and that such a proposal had also been rejected by Ms Ogilvie. Ms Cimenbicer's evidence was that this idea had been first raised with her by Mr Green when he approached her to give evidence in these proceedings. I accept that evidence. Ms Cimenbicer was a particularly impressive witness. 160 I find it unnecessary to determine whether in fact Mr Green had raised a similar proposal with Ms Drewe and Ms Ogilivie, because I accept Ms Brown's evidence that Mr Green had never raised this possibility with her and that she would have not agreed with such an approach, which would only have threatened the partnership's profits. I also accept her evidence that her understanding was that it was the partnership which was to exclusively operate Howard Showers' stores. This was, indeed, consistent with the evidence of later discussions between Ms Brown and Mr Green as to the opening of other stores. 161 I also accept Mr Frumar's evidence that the partnership agreement was drafted to reflect Mr Green's instructions and that he advised Mr Green that such an agreement would contain a number of omissions and shortcomings, not expected in a standard partnership agreement. Mr Frumar's evidence was that he was surprised when Mr Green and Ms Brown executed the first draft of that document. It did not contain terms which Mr Frumar advised Mr Green would ordinarily be included in such an agreement, including what would occur in the event that Ms Brown's employment with Image was terminated. In these respects, I prefer Mr Frumar's evidence to that of Mr Green. It also did not incorporate certain other important aspects of the arrangement which the parties entered. I am satisfied on the evidence that this was in accordance with Mr Frumar's desire to keep the document simple, because he did not want Ms Brown to be independently advised about the agreement. 162 Ms Brown did not seek independent legal advice. On her evidence she accepted Mr Green's assurances as to the basis upon which the partnership would operate. Mr Green's evidence was that he told her 'Get legal advice, but you can trust me.' Ms Brown denied he had suggested that she obtain legal advice. Her evidence was consistent with Mr Green's instructions to Mr Frumar and I prefer it. 163 Mr Green informed Mr Frumar that he and Ms Brown had agreed upon a formula for 'calculating the payment in the event that either party wishes to sell out.' I accept Ms Brown's evidence that what was in fact agreed was that if either party wished to leave the partnership, the other would have an opportunity to buy that party out for a fair price. She understood clause 13 to so provide. 164 Mr Green and Ms Brown each contributed capital to the business ($35,000 and $15,000 respectively). Their two companies were later added to the agreement, in their place. 165 As well as executing the agreement, in April 1993 Mr Green and Ms Brown obtained a business name registration of Howard Showers, for the shop which they opened in the QVB building. On the respondents' submission, this was necessary to ensure that the partnership did not commit an offence under the Business Names Act 1962, in trading under an unregistered business name. This registration was consistent with Ms Brown's understanding that the partnership was to have the exclusive right to use the Howard Showers name for their shops. I prefer Ms Brown's evidence to Mr Green's on this issue. His evidence, particularly by that given in cross examination, was not believable. 166 I accept Ms Brown's evidence that in December 1993, around the time that the two company names were added to the partnership agreement, she also executed a transfer form in order, as she understood it, to transfer the business name into the name of these two companies. The document suggests that it was signed by Mr Green on the same day, but later, the document was altered to indicate that the business had been transferred to Image in September 1993. There had, of course, never been such a transfer. 167 It was Mr Green's evidence that it was 'Ms Drewe's idea to tidy up this registration' and that she gave instructions as to what was done, not him. Ms Drewe confirmed that she raised this matter with Mr Green and Ms Brown at the same time that she suggested that the partnership should be in the name of the two corporate entities, rather than in Ms Brown and Mr Green's individual names. Ms Drewe's evidence very much suggested that it was she who realised the potential value of the agreement Mr Green had made with Ms Brown as to the partnership operating exclusive Howard Showers shops and that the steps taken in relation to the Howard Showers' name, were designed by she and Mr Green in order to begin unwinding that arrangement, to the benefit of Image and without Ms Brown's knowledge. 168 What happened to the transfer document throws a very plain light on the way in which Mr Green and Ms Drewe, even at that time, in 1993, set about to deceive and mislead Ms Brown and to act in a way designed to advantage Mr Green, Image and Ecroblack and to disadvantage Ms Brown and Charlie Brown. Their evidence as to these matters only reinforced the view which I had otherwise reached as to the reliability of the evidence which they each gave in these proceedings. Their evidence also suggested that even before Mr Green and Ms Drewe became concerned about the nature of any relationship between Ms Brown and Mr Avidan, they were prepared to act in a way designed to advantage Mr Green and his corporate entities and to disadvantage Ms Brown and her company. This conduct also throws into considerable doubt that the real reasons why Mr Green and Image treated Ms Brown as they did in 1994, were those which Mr Green and Ms Drewe advanced in their evidence. 169 The business name transfer document was in fact completed so as to transfer the registration to Image not Ecroblack and Charlie Brown and in October 1993, in accordance with such a transfer, Mr Green's evidence was that he sent a letter to the partnership advising it that Image permitted the partnership to use the name. There is considerable doubt that this letter was either created or sent at that time. The transfer was certainly not registered then and the letter, which was addressed to the partnership shop at the QVB building, was not received by Ms Brown. Mr Green's evidence as to whether or not he had given her this letter was most equivocal. I accept Ms Brown's evidence that she knew nothing of the transfer of the registration to Image until these proceedings were commenced. This was consistent with the evidence that no steps were taken by Image to file the transfer forms until August 1994, after the termination of Ms Brown's employment. 170 In cross examination, Mr Green accepted that the steps taken in relation to the registration of the business name were designed to ensure that he could withdraw the whole basis of the partnership whenever he liked, this being an advantage to Image and a disadvantage to Ms Brown. Ms Drewe similarly acknowledged her understanding of the importance of the right to use of the Howard Showers name, both to the partnership and to Image. The partnership depended upon the right to use the Howard Showers name in order to trade. I reject Ms Drewe's evidence that the failure to register the transfer earlier was an oversight. The evidence suggested that what was done was deliberate, but concealed from Ms Brown. It was also relevant to this conclusion that on the case advanced for the respondent, transfer of the business name registration to Image would have put the partnership in breach of the relevant legislation. 171 Mr Green took a number of other steps which disadvantaged Ms Brown and Charlie Brown in relation to the partnership business and contrary to the basis upon which the partnership was established. It was Ms Brown's evidence that a number of other matters were agreed between her and Mr Green when the partnership was established which, after the termination of her employment, he unilaterally revoked, to his advantage and the disadvantage of the partnership business. 172 These matters included that Image would give the partnership a 10% trade discount. In his evidence, Mr Green tried again to put a particular gloss on this agreement, to advance the respondents' resistance of the case. His evidence was that he had not agreed that the discount would be a permanent arrangement, that there was no industry practice as to such discounts, (despite evidence of various levels of discount being given to other retailers by Image, including David Jones, with whom the Howard Showers shop in the QVB building competed) and that the discount was only provided to the partnership in the initial set up period. Ms Brown's evidence was that such discounts were common in the industry. I accept that evidence. It was consistent with that of Ms Wolfenstein, Mr Avidan, Mr Levy and Ms Sernack. 173 In cross examination, Ms Brown accepted that the discount was an agreement in which the partnership had no proprietary interest, so that if in future the partnership business was sold, the new owners would have to negotiate their own terms with Image. I accept her evidence, nevertheless, that this was an important basis upon which she entered the partnership with Mr Green and that its unilateral withdrawal damaged the partnership. 174 On 18 August 1994, Image withdrew the discount from the partnership, by letter. In a separate letter, sent on the same day, Mr Green informed Ms Brown that he was implementing various changes in the management of the partnership business and, as a result, would introduce a new management charge, the details of which would be provided to her within 2 weeks, (later quantified at some $6,000 per month). In a third letter sent on that day, Ecroblack informed Ms Brown of the profits for the preceding financial year, their distribution and required payment of $9,271 by Charlie Brown Pty Ltd 'in order to maintain partners' equity account balances.' This sum was never paid. Nor was the sum of $31,729, which the letter informed Ms Brown, Ecroblack had to provide for the same reason. 175 The only proper construction which can be placed on these developments was that they were designed by the respondents to unfairly disadvantage the applicants. I accept Ms Brown's evidence that they were inconsistent with the understanding between she and Mr Green. In some respects they were inconsistent with the partnership agreement. They were steps taken which exploited the continuing inequality in bargaining positions between the parties, at a time when Ms Brown was unemployed, as the result of her unwarranted dismissal from Image's employment, without proper warning, explanation, notice or compensation in lieu. It must be concluded that they were designed to pressure Ms Brown to leave the partnership at a time when Mr Green was refusing to discuss partnership matters with her. I reject his evidence to the contrary. The reality was, as Mr Green put it in cross examination, 'I thought that the whole structure of our relationship ended in July'. 176 Correspondence followed between Charlie Brown, Image and their respective advisers. The partnership accounts were challenged by the applicants, as well as the right of Mr Green, Image and Ecroblack to take various of these unilateral actions. Legal action was threatened by both sides and on 27 September, Ecroblack served a notice of dissolution of the partnership on Charlie Brown. This gave rise to a dispute as to which provision of the partnership agreement applied to the dissolution, the applicants asserting that they should be given the opportunity to purchase the partnership business for a fair price, in accordance with Ms Brown's understanding of the arrangement between them and as contemplated by clause 13 of the Partnership Deed. This was rejected. 177 Ecroblack then applied to the Supreme Court to have the business of the partnership wound up. Charlie Brown also took proceedings in the Supreme Court in relation to the proper construction of the partnership agreement and the alleged misrepresentations. 178 The outcome of these proceedings in the Supreme Court have been earlier outlined. The applicants' understanding of the proper construction of the Partnership Deed was not accepted and the partnership business was wound up, with Image purchasing the business for a valuation determined by the Receiver. The parties each expended considerable costs in pursuing these matters. 179 Ms Brown also took proceedings against Mr Frumar. In both proceedings, the drafting of the partnership agreement was criticised. In this case, it has become evident that the drafting reflected Mr Green's desire to disadvantage Ms Brown, in the ways I have earlier noted. The agreement plainly did not reflect her understanding that in the event that either party wished to terminate the partnership, that they would have the opportunity to acquire the partnership business for a fair price. I also accept her evidence that she did not fully understand the partnership agreement, hardly surprising in the circumstances. 180 I accept the evidence of Ms Brown, Ms Arthur and Ms Demetriou that until the dissolution of the partnership at the end of September, Ms Brown continued to work in the partnership business. Afterwards, the partnership business continued under Mr Green's management and without Ms Brown's involvement until the appointment of the receiver. In November, without prior consultation with Ms Brown, Mr Green expanded the size of the area leased by the partnership in the QVB building. The evidence of Ms Arthur was that the shops were then overstocked as the result of Mr Green's actions and that out-of-date Howard Showers' clothes were ordered. I prefer Ms Arthur's evidence on these matters to that of Mr Green. Such steps were consistent with profits of the business declining. 181 Eventually the Receiver sold the business to Image. In cross examination, Ms Brown agreed that she got a fair price for her share of the business at that point. While the respondents relied upon this view, it did not, in my view, detract at all from the strength of the case which the applicants here advanced as to the partnership deed or the unfairness of the respondents' conduct in relation to the partnership, its establishment, operation and dissolution. Ms Brown's satisfaction with the Receiver's conduct who, for instance, as part of his valuation, reinstated into his calculations the 10% discount which had been removed, could be well understood. This cannot, however, be relied upon by the respondents as having fairly redressed the wrongs which they had earlier done the applicants. Nor did it provide a complete answer to the claims advanced here, which were not concerned with the fairness of the Receiver's conduct, but that of the partnership agreement and the conduct of the respondents thereunder. 182 These matters inevitably lead to the conclusion that the applicants have demonstrated the unfairness of the partnership agreement. That agreement was plainly a one-sided document, designed by Mr Green to advantage him and to disadvantage Ms Brown and to ensure that she did not obtain independent advice as to her position. That Mr Green was able to engineer this result obviously flowed from his understanding of Ms Brown's belief that they had a father/daughter relationship and that he would treat her accordingly. That their respective bargaining positions were not equal was plain. The agreement not only permitted Mr Green to conduct himself in a manner which ignored Ms Brown and Charlie Brown's proper entitlements and the basis under which the agreement had been entered, but was designed by Mr Green in order to enable him to achieve that end. It follows that this aspect of the parties' arrangement must also be found to be relevantly unfair, as that term was understood under s275 of the Act.

Valuation 183 The monetary orders sought in respect of the partnership reflected a valuation prepared by Mr Elliott, which firstly had regard to the value of the partnership business as at February 1999, less the amount to be paid by Ms Brown under clause 13 of the partnership agreement and the amount paid to Ms Brown by the Receiver, when the partnership business was sold to Image. Income for the years to 31 October 1999 was also sought. I will return to this below. 184 The respondents advanced their own valuation, through Mr Jansen. There were a number of important differences as between their approaches, which I will touch upon and also significant common ground, for instance both adopted the capitalisation of future maintainable profits method of valuation. 185 I take the view that the calculation of the monetary orders should be approached on the basis that an assessment be made of the value of the partnership business at the time when it came to an end and that there should be some component as to the income sought. I do not, however, accept that it would be appropriate to make orders in respect of an income stream on a basis that the business would have continued to October 1999. 186 I have also concluded, given the evidence as to the separate history of the two shops, the way and time at which they were each established, conducted and operated in their respective cities, that Mr Elliott's approach, which has regard to the separate performance of the two shops, rather than Mr Jansens' approach, which adopts an average of the two is to be preferred as an appropriate method of valuation. This follows, in my view, not only from the matters I have mentioned, but from two other matters. The first was the length of Ms Brown's involvement in each of the shops and trading results after her involvement ceased. On the evidence, it is proper to conclude that Ms Brown's involvement in each of the shops had a positive influence on their profitability and that this is a factor which should not be ignored for the purpose of the valuation. In this respect, I particular note the evidence of a substantial decline in profits of the shops after September 1994, including a 3 month period when the Chapel St shop sold goods for less than it had paid Image for them and the evidence of Mr Green overstocking the shops and stocking them with out-of-date goods. These are matters properly taken into account, in my view, as Mr Elliott has done. 187 The second was that Mr Jansen's approach involved the average earnings of the Chapel St shop being determined having regard in part to the length of operation of the QVB store. In my view, while that approach might in the ordinary case be unremarkable, in the circumstances of this case, it had the result of deflating the fair valuation of the partnership business and cannot therefore be adopted. 188 I also take the view that the Receiver's approach to the valuation of the business in 1996 cannot be determinative of the question of how monetary orders are to be assessed in these proceedings in order to do justice between the parties, having regard to the unfairness found. I take note of Mr Elliott's evidence that in his experience as a Receiver, when selling a business he has got less than he would have got if he had had the opportunity not to sell as a Receiver, because buyers are looking for bargains from Receivers and this affects the price they are prepared to offer. This situation then affects the Receiver's ability to meet the statutory obligation to maximise value on realisation of the assets of the business under their control. In my view, this factor cannot be overlooked in this case, given the circumstances of the eventual sale of the business to Image by the Receiver. 189 I also find pertinent that both the Receivers' valuation and that of Mr Jansen proceeded on the basis of actual earnings, while Mr Elliott's was adjusted to take account of matters I have earlier dealt with, such as Ms Brown's involvement in the business. This is another good reason for departure from the Receivers' approach to valuation. Mr Jansen's evidence was, of course, that he took into account various reasons for a downturn in profits in the business, Ms Brown's departure, however, and the positive consequences of her involvement were not taken into account, nor were other matters I have dealt with. This is not to be critical of Mr Jansen, it reflected, after all, the respondents' attitudes and their instructions to him. Nevertheless, they are matters which have led me to prefer Mr Elliott's approach. 190 For the reasons which I have earlier given, I also take the view that it is appropriate to approach the valuation on the basis that there was a continuing right to the 10% discount from Image, an assumption which I note the Receiver also made, and the right to use the Howard Showers name, a matter not taken into account by Mr Jansen, but included by Mr Elliott. 191 In one respect however, I have concluded that Mr Elliott's approach cannot be adopted. One thing which was plainly apparent from these proceedings was that whether for good reason or not, the relationship between Mr Green and Image and Ms Brown and Charlie Brown, broke down irretrievably in 1994. This is not something which can be ignored, it seems to me, in formulating monetary orders in this case, especially when consideration is given to the fact that after the breakdown of the relationship, Ms Brown later took up employment with Discovery and thereafter expended her energies there to ensure the success of the Lili and Charlie Brown labels. 192 In my view, it must be accepted that the breakdown and its consequences would inevitably have affected the business of the partnership, whether it was Image or Ms Brown which acquired it. While I have concluded that it is not appropriate to take Ms Brown's employment by Discovery into account by way of mitigation in relation to the notice claim, I take the view that in relation to the claim made as to the partnership, particularly in relation to an order for a continuing income stream, this development cannot properly be ignored. 193 In this case, the proper approach to assessment of the claim made in relation to a continuing income stream is, in my view, on the basis that even if Ms Brown had been given the opportunity to purchase the business, the business relationship between that business and Image would have come to an end. A similar approach was discussed at pp54-60 in Avis & Ors v AMP & Ors (unreported, Schmidt J, 13 September 1996) and AMP & Anor v Avis & Anor; Avis & Anor v AMP & Anor (unreported; Bauer, Peterson and Marks JJ; 18 December 1997). 194 Mr Elliott's valuation proceeded, in part, on the basis of an assumption that the partnership business would have continued with Ms Brown's involvement, selling clothes she had designed, without her designing a Charlie Brown label while working for Discovery. On the evidence in this case, I have reached the conclusion that it would not be just to assume that this relationship would have continued indefinitely after the events of 1994. In that context, I have concluded that it would be just to proceed on the basis that the relationship between Image and the partnership would have come to an end after a proper period of notice. I assess such notice on a basis similar to that which I concluded was fair in relation to the notice of termination of employment which should have been given by Image to Ms Brown. It follows that 12 months' income should flow under the monetary orders to be made. 195 The notice of dissolution was given by Ecroblack on 27 September 1994. I take the view that the monetary order should therefore encompass an income stream, calculated on the basis adopted by Mr Elliott, to the end of September 1995, less any profits paid to Ms Brown prior to that date. I have also taken into account as relevant to this approach that during some of this period at least, Howard Showers' clothes available for sale were in fact designed by Ms Brown before the termination of her employment. 196 In the light of this conclusion it is unnecessary to have regard to the evidence as to the circumstances in which Ms Brown transferred the trademark in her name to Discovery. I, however, accept Ms Brown's evidence that she did not herself have the time or financial means to pursue this registration when it was opposed. There is no doubt that having regard to the timeframe which the monetary orders reflect and the terms of the licensing agreement having regard to the evidence of gross receipts, no payments were due to be made to the applicants by Discovery under that agreement during that period. It is therefore unnecessary to further consider the circumstances in which the trademark was transferred in 1998.

Other money claims 197 Given the view which I have formed as to the conduct of the respondents in this case and the unfairness of the contracts and arrangement this conduct exposed, I take the view that the claim for legal costs incurred in the Supreme Court proceedings between these parties and those pursued against Mr Frumar by the applicants, should also be awarded in favour of the applicants, as well as the indemnities sought in relation to the costs incurred in those proceedings by Mr Green, Image, Ecroblack and Mr Frumar, which the applicants are obliged to meet. These costs cannot in my view simply be dismissed as having been incurred because the applicants did not diligently pursue these proceedings, as the respondents submitted. In Mr Frumar's case, for example, there was even evidence of an attempt by Mr Green, not persisted with, to prevent Mr Frumar giving evidence of his instructions. 198 Having in mind the evidence and my findings, I take the view that it must be concluded that these proceedings all resulted from the conduct of the respondents as permitted by the contracts and arrangement in question. Had the agreements here in question not been unfair in the way in which I have found and had the respondents not conducted themselves thereunder in the unfair manner I have described, these other proceedings and the costs incurred in them would have been unnecessary. I take the view that it would be just in the circumstances of this case, for these conclusions to be reflected in the monetary orders which I make. 199 I finally reject the submission advanced for the respondent that the Court would accept that in reality Ms Brown had suffered no damage from the respondents' conduct, because she now enjoys a reputation as the designer of her own label, which is successful in the marketplace and because she is employed in the business of her husband, the effective owner of that label, in which she has an interest as the result of her marriage. 200 Firstly, those submissions pay no regard at all to the position of Charlie Brown and its interest in the partnership. Further, for such an approach to be adopted, it would, in my view, be necessary to ignore most of the evidence made out by the applicants in this case. That evidence has led me to the view that orders must be made in their favour. I cannot accept that the evidence established that Ms Brown's current position resulted merely as a matter of convenience as between her and her husband. Nor do I accept that in considering the making of orders in this case, it is proper to proceed on the footing that in the event that Ms Brown's marriage breaks down, she may be able to make an unspecified claim in relation to her husband, as to his assets in Discovery, in which she has no legal interest and that the respondents should benefit from such a possibility. 201 To adopt the approach urged by the respondents would obviously advantage them on a basis, in my view, quite contrary to their deserts on the evidence. It would also require that as the result of the marriage of Ms Brown and Mr Avidan, the Court treat Ms Brown and her company as one with Mr Avidan and Discovery. I reject that approach. I take the view that for such breathtaking submissions to be accepted would require me to wrongly exercise the discretion vested in the Court under the section and would result in a complete failure to do justice as between these parties.

Orders 202 For all of these reasons, I intend to make orders to the effect of those advanced for the applicants, subject to the areas of departure I have outlined in this judgment. As to monetary orders, I note that they should reflect the elements of Ms Brown's package for a period of 12 months' notice, as proposed in the applicants' draft orders. As to the partnership, the orders will reflect Mr Elliott's approach to the valuation, calculated as at the termination of the partnership, together with an income stream for a period of 12 months thereafter. The orders will also reflect the other money claims, such as the outstanding annual leave entitlements, the costs in the various Supreme Court proceedings, the indemnities sought, together with a component for interest, to the date of judgment. 203 The applicants are directed to file and serve orders which will reflect this judgment, within 28 days. Those orders should also address costs. ------------------------

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