Eyota Pty Ltd v Hanave Pty Ltd

Judgment (ex tempore) 1HIS HONOUR: By originating process filed on 14 June 2012, the plaintiff Harbour Radio Pty Limited, the proprietor of radio station 2GB, claims an order pursuant to the (Cth) Corporations Act 2001, s 459G, or section 459H, or section 459J, setting aside a creditor's statutory demand dated 24 May 2012 and served on it by the defendant, Stephen William Vizard, on or about that date. The demand claimed a debt of $247,500, which was described in the Schedule as follows: Unpaid Tax Invoice Number 1122 dated 12 April 2012 in relation to Midpoint Interim Top-Up Payment for the first 6 months of Year 3, payable upon termination of Services Agreement by the company on 5 April 2012 pursuant to notice from the company dated 6 March 2012. $225,000 plus $22,500 GST Total Amount: $247,500 2On 3 March 2010, Mr Vizard and Mr Russell Tate, the Executive Chairman of the plaintiff executed a document entitled "Harbour Radio Pty Limited (2GB) Offer of Services Agreement" ("the Service Agreement") for a term of three years commencing on 8 March 2010, whereby Mr Vizard agreed to prepare, host and present a news talk radio programme broadcast in the Melbourne license area on weekdays in regular programmed shifts, and to provide ancillary related and incidental services. The Service Agreement provided for a sign-on fee, a base salary of $450,000 per annum (plus CPI in each of the second and third years of the term) and an incentive amount, being a fixed payment in the first year of the term, and a share of a bonus pool (described as the "Melbourne revenue share", together with a "Live Read Revenue Share") in subsequent years. 3However, a clause entitled "Top-Up Payment" provided as follows: Top-Up Payment (a) Following expiry of the first 6 month period of the second and third years of the Term, if your aggregate gross receipts (prior to statutory deductions and superannuation contributions) under this agreement for the respective 6 month period is less than the amount equal to 50% of the aggregate of the Base Salary of the relevant year PLUS $450,000, the Company will pay you a top-up payment (less statutory deductions) equal to the shortfall. (b) Following the expiry of the second and third years of the Term, to the extent that your aggregate gross receipts (prior to statutory deductions and superannuation contributions) under this agreement (including any payment to you under paragraph (a)) for the respective 12 month period is less than the aggregate of Base Salary of the relevant year PLUS $450,000, 2GB will pay you a top-up payment (less statutory deductions) equal to the shortfall. (c) If in respect of the first 6 month period of the second and third years of the Term you receive a payment under paragraph (a) (Midpoint Interim Guarantee Payment) and during the second 6 month period of the respective year your aggregate gross receipts (prior to statutory deductions and superannuation contributions) (including the Midpoint Interim Guarantee Payment) in respect of that year exceed the aggregate of Base Salary of the relevant year PLUS $450,000, then notwithstanding any other provision of this agreement, 2GB is entitled to offset and retain to 2GB's own account any further entitlement you may have under this agreement relating to the relevant year to the extent of the amount the Midpoint Interim Guarantee Payment (with the intent that the Midpoint Interim Guarantee Payment is recouped by 2GB out of your entitlements in relation to the second 6 month period if your gross receipts (prior to statutory deductions and superannuation contributions) during the relevant year exceed the aggregate of Base Salary of the relevant year PLUS $450,000. 4Under the heading "Termination", the Service Agreement provided as follows: Termination 2GB will have the right to terminate within 30 days notice in either of the following 2 circumstances. These rights are additional to and separate from 2GB's rights of termination that are included in the long form agreement concluded between the parties pursuant to their negotiation obligations set out below. (a) Close of Business After the first 12 months of the Term, if 2GB or any related entity ceases to provide radio programming for broadcast in Melbourne. If 2GB terminates under this right, 2GB will pay you a separation payment calculated as follows: