Jooste v Digicore Technology Pty Ltd and Ors

Commission 1% of gross sales value on Ctrack units sold into the Asia Pacific region.

All costs (capital and operating, including fuel and maintenance) and sureties relating to the purchase and registering in your name, of a motor vehicle on par with a new Daiwoo Musso or equivalent value.

Your entitlement to superannuation contributions are presently covered by the State and Federal Law and the Company will honour its obligations to you in accordance with these laws.

Prior to your obtaining Medicare and permanent residence, you and your family will be covered in terms of an interim medical aid as per the Regional Headquarters (RHQ) agreement.

Your entitlements to Sick Leave are presently covered by State and Federal Laws and the Company will honour its obligations to you in accordance with these laws.

We acknowledge your request for both suitable Company Life and disability insurance cover, and advise that this will be conceptually investigated and resolved within six months of your joining DCT.

You would also be provided with, and be expected to manage both a Company cellphone and Company expense account within predetermined parameters. 12 The offer of employment also contained the following term:

It is the intention of the Company, subject to both your satisfactory performance and that of the Company, to, within the next six months to a year, consider you for a Directorship, and in the event of listing, allocate you equity in the company. 13 According to the applicant, during employment negotiations, both Mr Sauerbier and Mr Van Kempen acknowledged that "Digicore" would provide him with a car which was to be fully maintained by "the Company" which would also meet "all FBT (fringe benefits tax) obligations". Although the offer of employment makes specific mention of meeting the costs, including maintenance of a vehicle, it contains no reference to FBT. In support of the acknowledgements concerning FBT, the applicant relies on a copy of a draft budget he says was prepared by Mr Sauerbier for DT. Item 29 of the document states:

Fringe Benefit Tax - 98% of Item 24 Car Leases. 14 Mr Van Kempen, in cross-examination, denied being involved in any conversations with the applicant concerning the costs of FBT for the lease of a motor vehicle being met by "the company". According to him the motor vehicle referred to in the offer of employment of 24 May 1999 was registered in the applicant's name which meant that he was responsible for FBT associated with the vehicle. Although Mr Van Kempen conceded that the offer of employment did not state that the applicant was responsible for FBT, it was understood that the applicant wanted the vehicle registered in his name. Insofar as Mr Van Kempen was concerned it was the applicant's responsibility once the vehicle was registered in his name to meet FBT payments. 15 It was anticipated that the applicant would commence working for the Digicore group in Australia in either mid-July or August 1999. The applicant returned to South Africa and resigned from MTN. On 17 June 1999, he received a letter of appointment dated 14 June 1999 from DT (SA). This document purported to appoint the applicant to the position of business development manager with DT (SA) in South Africa on a base salary of R25,000 per month and 1% commission of gross sale value on C-Track units sold. The document also contained a term which imposed a restraint on the applicant of 12 months following cessation of employment, from carrying on business or having any interest in the sale, installation or service of the C-Track product within the Republic of South Africa. This document was signed by a Mr Du Rand as Executive Director of DT (SA) on 14 June 1999 and signed by the applicant on 17 June 1999. 16 According to the applicant, the letter of appointment was a formality only and not intended to affect the terms of his employment as set out in the 24 May 1999 offer of employment. It was commonplace, according to the applicant, in South Africa to have a separate offer of employment and a formal letter of engagement. 17 While in South Africa and before returning to Australia to take up the offer of employment, the applicant met Mr Wasson who said to him:

I believe you're going to be working for me in Australia. I have one huge problem with that - you are Dieter Sauerbier's maatjie (Africaans for "little friend"). 18 The applicant commenced employment with DT on 16 July 1999. It was agreed between the applicant, Mr Van Kempen and later Mr Scheffer that the applicant, throughout the period he worked for the Digicore group in Australia, would be paid by DD. No group certificates were relied upon which could have confirmed this. A payslip in the applicant's name dated 30 September 1999 from DD tends to confirm that the applicant, at least at that time, was paid by DD. Mr Scheffer, during cross-examination, said that, at all times during the applicant's employment, his salary was paid by DD. 19 On 9 August 1999, the applicant relocated his family to Australia. His daughter, at that time, was 3 years old. In his affidavit, the applicant described the event in the following way:

This was a major relocation for all of us. I owned a property in Cape Town in Sunset Beach, 300 metres from the ocean. I sold the Sunset Beach property for R620,000.00 in August 1999. As the exchange rate was approximately 4 SA Rand to the Australian dollar this significantly depleted our purchasing power as it was impossible to buy an equivalent home in the Wollongong area for approximately A$150,000. House prices were considerably more expensive in Wollongong than in Cape Town. Houses were approximately 4 times more expensive than in Cape Town.

We also sold some of our furniture and effects, two motor vehicles and various investments in order to have sufficient liquid assets to establish us in Australia.

My daughter, Daniella, was withdrawn from a private school in which she was enrolled. My wife, Teresa, was employed as a senior graphic designer with Old Mutual, the largest Insurance Company in South Africa. She resigned from that position towards the end of June 1999 so that she would be able to take care of winding up our affairs for the move. My wife was receiving an income of R106,800 per annum (A$26,700.00) from her employment with Old Mutual. I was receiving an income, including bonuses and commissions of approximately R391,541 (A$92,885.00) per annum from MTN, and share options worth another R53,070 (A$13,267.50). 20 Upon his arrival in Australia in August 1999, the applicant was informed by both Mr Wasson and Mr Van Kempen on separate occasions that he should use the title of general manager. Business cards were provided to him to reflect this. In mid to late August 1999, the applicant became aware that a new company, DA, was to be formed, in order to engage in a joint venture with Vodaphone, with C-Track being sold through "the company" under the Vodaphone brand name. At about this time, Mr Wasson informed the applicant that he had been reviewing the terms of his employment and decided to limit the 1% commission "on all sales" (as set out in the 24 May 1999 document) through DA, adding, "They are the only sales that you can influence.".

When the applicant voiced his opposition to this, Mr Wasson said:

That's the way it was (sic) going to be and if you don't like it you can go back to South Africa. 21 Towards the end of August 1999, the applicant met Mr Poulton who handed him minutes of a meeting attended by Mr Wasson, Mr Van Kempen and Mr Poulton dated 10 August 1999 and a letter dated 25 August 1999 signed by Mr Wasson. The minutes recorded certain items of business, including the following:

4. DigiCore Australia (new company) to be incorporated. DigiCore Technology will own 100% (50% likely to be sold to Vodaphone). Directors to be Derek Wasson, Luke Van Kempen and Euan Victor Poulton. $300,000 is likely funds sought - share capital (initially a loan).

7. Streamlined immigration - Luke Van Kempen to apply for permanent visas for Derek Wasson and Jonathon Jooste. Derek Wasson to give information on nature of visas.

Jonathon Jooste - employee status, packaged as effectively as possible - $10,000 per month." 22 The letter, on DI (SA) letterhead, addressed to Mr Poulton, purported to set out the applicant's employment package applicable at that date and requested Mr Poulton to finalise the details. It was signed by Mr Wasson as Managing Director, who wrote:

After studying the offer of employment that was accepted by Jonathan Jooste dated 23 May 1999, from Digicore Technology ACN 079 254 676, I would to confirm (sic) the following situation.

The letter is specific to its point of view that Jonathan Jooste would be employed as Business Development Manager Asia Pacific. Jonathan will be based in Wallogong (sic) with effect from 16th July or 1st August 1999, whichever is practically achievable. It is my feeling that Jonathan was employed with the company from 16th July 1999, since he arrived in Wallogong (sic) on the 17th July 1999 and spent at least a week with the company before leaving for South Africa to finalise his travel arrangements.

On the relocation side we have allowed a limit of $10,000, as well as the airfares for himself and his family. We have also allowed to provide (sic) a maximum of one-month accommodation and meals in a suitable hotel in Wallogong (sic) or alternate accommodation. The cost for that will be capitalised or reclaimed against our regional headquarters status.

Digicore Technology has also undertaken to assist Jonathan in claiming a section 457 visa, and then ultimate permanent residence for his family in Australia.

One (sic) his remuneration, the basic salary is $10,000 per month. It is my opinion that on that basic salary any fringe benefits tax or tax that is aracted (sic) on any of the fringe benefits that Jonathan, is entitled to, will be deducted directly from his monthly salary. So, that $10,000 per month will attract fringe benefits, tax on his vehicle and the fringe benefits tax on has (sic) health fund. The 1% commission on gross sales is currently on C-Track units sold into the Asia/Pacific region. I have at this stage had a discussion with Jonathan and the decision that I gave him, was that once he his (sic) going to be operating within Digicore Australia, he will have a Digicore Australia commission of 1% of gross sales vehicle on units sold by Digicore Australia. On that point if you could check for me that by employing Jonathan within Digicore Australia, the new company with the ACN number still to be registered, whether that would have an effect or not on his ability to enter the country and our claims under the regional headquarter agreement. Or whether since it is a 100% owned subsidiary. It can claim on the regional headquarter status facilities entitled to by DCT or DCD Australia.

On superannuation, the letter again states that his entitlement to superannuation contributions are presently covered by the State and Federal Law and the Company will honour its obligations to you (sic) in accordance with these laws. Hence, it is my feeling that we will carry the cost of 7% of gross salary amounting to +/- $8,400 per annum. His insurance etc, is per his letter. The health fund at $300 per month is for the company's account.

I trust that the above will assist you in finalising his employment. Please note that Jonathan's new letter of employment and his contract with the company, is to be signed between Digicore Australia and Jonathan Jooste, and not Digicore Technology and Jonathan Jooste. 23 The applicant, upon receipt of this letter, had three major concerns:

(i) the suggestion that he pay FBT on his motor vehicle when it had been agreed earlier with Mr Sauerbier that "Digicore" would meet all FBT obligations;

(ii) that his new employer was to be DA. This decision had been made without any consultation with the applicant. The applicant's view was that it was important to continue to be employed by DT because it owned the intellectual property rights to C-Track in Australia and it had regional headquarter status with the Federal and State governments. As such, DT was obliged to provide the applicant with health insurance;

(iii) the suggestion that his commission was to be based on DA sales only (a company that had not yet been registered), as opposed to all sales in the Asia Pacific region. 24 The applicant raised his concerns first with Mr Poulton. According to the applicant, Mr Poulton said:

I am arranging finance for your vehicle. The only way I can finance it is with a 35% balloon payment which you'll have to pay.

Mr Poulton, in his affidavit, denied making this statement. 25 The applicant next raised his concerns with Mr Wasson. The applicant's account of the conversation, reproduced in his affidavit, is as follows:

I said: "The FBT on my vehicle is to be paid by the Company, not me."

He said: "This is something everyone has to pay in Australia."

I said: "My commission was supposed to be on sales in Asia Pacific and this has been reduced to sales by Digicore Australia without any consultation."

He said: "That's pretty much the way it's going to be, because you're going to be operating in Australia."

I said: "I understood I was to be employed with Digicore Technology, not Digicore Australia."

He said: "It's just the way we're structuring the business." 26 According to the evidence tendered during the proceedings, DA was not registered until 4 October 2000. 27 On 16 September 1999, Mr Van Kempen handed the applicant a letter from DT. The letter attached a draft agreement between DA and the applicant. The letter also informed the applicant that Digicore Holdings, South Africa, had agreed to acquire the main shareholding in DA, and, that DA was to operate as a wholly owned subsidiary of DT and DD. The goal of DA was described in the letter as "... (to) establish and gain a strong local market presence". The applicant, as general manager, was expected to guide DA in achieving those goals. 28 In his affidavit, the applicant described his reaction to the draft agreement as one of shock. Some of the terms of the agreement he thought differed substantially from the terms of the original offer of employment signed on 24 May 1999. The new draft terms were also substantially less favourable than the earlier offer. He complained first to Mr Wasson about the unilateral decision to engage his services with DA when he was initially employed to work for another company. He sent an email to Mr Van Kempen outlining the various differences he perceived between the two agreements and suggested a number of changes. He also sought clarification of other terms and conditions in the draft agreement which contained, for example, terms requiring him to pay FBT on his motor vehicle; and, restraint of trade clauses and termination clauses. Draft clause 7(c), for example, stated, "Digicore reserves the right to terminate the contract at any time based on the circumstances and with the approval of directors." Draft clause 7(b) required the applicant to give 30 days written notice prior to termination. Draft Item 4 in the Schedule announced that the applicant would receive a 1% commission on net profit of sales by DA. The applicant sought to amend this to "1% gross sales". 29 Shortly after receiving the draft agreement, the applicant again spoke to Mr Wasson and Mr Van Kempen about his concerns with the draft agreement. At this stage, the three men were in the applicant's car. According to the applicant, Mr Wasson responded to these concerns saying:

You can either sign the contract or you can go back to MTN. 30 The applicant delayed signing the draft agreement and continued to negotiate a number of amendments. He was unsuccessful in persuading Digicore to meet FBT responsibilities for his motor vehicle. The termination clauses remained in the same terms as did the restraint clauses, although the restraint period was reduced from 6 months to 3 months. Draft Item 4 was amended to provide for a 1% commission on gross sales. The applicant's base salary of $10,000 per month remained unchanged. 31 The applicant signed the agreement on 26 November 1999. At the time he was unaware that DA had not been incorporated. He says when he signed he was, "... fearful that (Mr Wasson) and (Mr Van Kempen) would carry out their threat to send me back to South Africa". 32 On 15 November 1999, the applicant attended a meeting during which Mr Wasson informed those assembled that Digicore's operations would be restructured with DT as the main trading company and DD as a subsidiary of DT. All stock was to be invoiced to DA by DT. 33 Within the Digicore group the applicant was responsible for corporate relations, marketing, sales, administration, business development and operations. All financial decisions made by him were referred to Mr Wasson and Mr Van Kempen, although because Mr Wasson was rarely present, most authorisations (in 1999) came from Mr Van Kempen. The applicant says he worked long hours and often on weekends. He travelled throughout the eastern Australian states. He organised trade shows and presentations. The intention was to appoint distributors and through them sign up clients to the C-Track system. The applicant claims he signed up a number of high profile clients such as Australian Native Landscapes, Bunker Freightlines, IR Cootes Pty Limited, NSW Police and Sydney Waterways. 34 On 24 January 2000, during a meeting with Mr Wasson and Mr Van Kempen, the applicant was told to organise road shows which involved five presentations in state capital cities over a ten-day period. The applicant was given only 30 days to prepare the road shows. In the end, because of tight deadlines and schedules, presentations were only given in Perth, Adelaide and Melbourne. 35 In April 2000, the applicant attended a meeting during which Mr Wasson gave a powerpoint presentation concerning the restructuring of DA's operations. The applicant's position at DD was described during the presentation simply as "Indirect Sales & Marketing". The applicant says that until that time there had been no discussion with him about changing his title which had been general manager of Digicore Australia. At about the same time, Alex and Lorraine Van Niekerk arrived in Australia from South Africa to work for the Digicore Australia group. Mr Van Niekerk was appointed to the position of Direct Sales Manager at DD on the same level as the applicant. 36 On 1 July 2000, Mr Scheffer, who was Mr Wasson's uncle, commenced working at Digicore Australia. According to the applicant, Mr Wasson and Mr Scheffer "strongly encouraged" the sales of Digicore products as rental transactions. Outright cash purchases, said the applicant, were "strongly discouraged". In cross-examination, Mr Scheffer took issue with these statements. Mr Scheffer explained that rental financing was encouraged through T because it was the best way to finance the C-Track product but that cash purchases were not "strongly discouraged". 37 The applicant, in his affidavit, described his relationship with Mr Wasson (and later with Mr Scheffer) as "difficult". According to the applicant, Mr Wasson put personal expenses for motorcross activities through Digicore Australia accounts. Substantial personal expenses relating to motor-cross bikes, road and air travel, fuel, spares, courier fees for parts, tools, vehicle usage all of which were incurred by Mr Wasson were paid by Digicore Australia. In addition, the applicant claims that Mr Wasson employed Digicore Australia staff solely for their motor-cross prowess. One such employee, the senior C-Track installer in 2000 was often not available for installation work because he was occupied with setting up motorcycles for competitions. Travel expenses for members of Mr Wasson's family and friends were also charged by Mr Wasson to Digicore Australia accounts. The applicant says that these and other expenses were originally charged to his Diners Club account and that later he was reimbursed by Digicore Australia. 38 In his evidence Mr Scheffer agreed that Mr Wasson was using Digicore's company finances to fund his own motorcross activities. He said Mr Wasson also used T's funds for this purpose. Mr Scheffer described it as an "understatement" that Mr Wasson had no difficulty using other people's money to meet his own ends. Mr Scheffer said that he became aware that Mr Wasson was using company funds for private use within a few days of arriving in Australia (that is some time within the first week of July 2000). Mr Wasson, says Mr Scheffer, was spending about $20,000 per month on the company credit card for his private motorcross activities and flying friends all over Australia. Eventually, Mr Wasson's credit card was cancelled at Mr Scheffer's instigation although Mr Scheffer was unsuccessful in getting Mr Wasson to repay moneys outstanding in the sum of $150,000. Mr Scheffer said he was seriously concerned about Mr Wasson removing company funds for his private purposes and that he raised those concerns with Mr Van Kempen. 39 The applicant also described difficulties that the he had with Mr Wasson, for example his attempts to obtain a good quality colour printer in order to prepare quality proposals for clients. The applicant also had a personal Diners Club credit card and a second card marked "Digicore Australia" for business expenses. The applicant would submit statements to Digicore Australia for payment together with documents supporting claims. Payments had to be approved by Mr Wasson. Initially, the company made prompt payments. In early to mid 2000 however, according to the applicant when Mr Scheffer took control of finances, he delayed making payments. On 2 August 2000 the applicant received a Diners Club demand for immediate payment in the sum of $5,693. He approached Mr Scheffer who undertook on behalf of Digicore to pay the amount by 24 August 2000. On 28 August 2000 the appellant was contacted by a Diners Club representative who informed him that the account remained unpaid. The applicant again approached Mr Scheffer to authorise payment. He was told that the company had cash flow problems and Mr Scheffer would have to get the funds first. The amount remained unpaid and on 12 September 2000 the applicant was notified by Diners Club that it had cancelled his credit facilities. On the same day the applicant paid the outstanding amount out of his own personal savings. 40 On 18 July 2000 Mr Scheffer called the applicant into his office and said to him: The General Manager's Position has been made redundant due to the new structure of the organisation. I have found ways to take costs out of the business. I can get an Australian to look after the dealers at well under $6,000 per month. I can offer you the position of Business Development Manager which will become available on 1 August 2000 at a somewhat reduced salary.

Mr Scheffer then handed the applicant a document which outlined his current salary package and the proposed reduced salary per month. The two packages are set out below: Gross # $10000.00 $6000.00 Less Salary Sacrifice $2205.13 $2205.13 $7794.87 $3794.87 Tax # $3012.95 $1087.00 Net $4781.92 $2707.87

41 According to the applicant he had had no prior notice that the position of general manager, which was his position, had been made redundant. The following day, 19 July, the applicant arrived at his desk to find an internal telephone list which described him as "Distribution Manager". When he asked Mr Wasson for an explanation Mr Wasson said: "This is all wrong and you'll have to speak to Hans Scheffer about that". 42 Later that day a revised internal telephone list described the applicant's position as "Sales Manager - Regional Development". 43 On 1 August 2000 Ms Van Niekirk, Mr Wasson's secretary left a letter on the applicant's desk. The letter which was dated 20 July 2000 and signed by Mr Scheffer informed the applicant that the position of general manager had become redundant and that his employment with the "organisation" had ceased on 31 July 2000. The letter also advised that a new position of Business Development Manager would become available on 1 August 2000 on a starting salary package of $6000 per month. The applicant was asked to consider accepting the new position. 44 The applicant immediately sought legal advice. 45 On 3 August 2000 the applicant was served with an eviction notice. It emerged that DD had not been paying the applicant's rent for the home in which he and his family had been residing. The applicant personally paid the arrears in rent but was subsequently reimbursed by Mr Scheffer on behalf of Digicore. 46 The applicant continued to work at Digicore undertaking the same duties, and continued at least for a while, to receive a salary. On 22 August 2000 Mr Scheffer called the applicant into his office and said to him:

I've got to take costs out of the business and save wherever I can. Otherwise I can change the business name, put it into liquidation, and the next day reopen under the name of Digicore Technology who hold the rights to Regional Headquarter Status.

The applicant says that he was shocked by Mr Scheffer's comments and concerned for the clients that Digicore had built up over the last 12 months. At the same time the applicant was aware that Digicore owed $20,000 to Vodaphone. On 22 August 2000 after failing to pay the outstanding amount, Vodaphone disconnected all Digicore's simcards. Digicore then signed up with Optus. 47 During the 22 August 2000 meeting the applicant and Mr Scheffer also discussed the issue of FBT. According to the applicant Mr Scheffer wrote out some notes and said:

The tax on your earnings for the Year 2000 financial year should have been $38,097.00. We have deducted $31,569.00. You therefore owe tax of $6,528.00 plus the FBT on your vehicle of another $9,000.00. Therefore your total tax liability is $15,528.00.

If we're creative, and reduced your taxable earnings for the past year to $65,930.00, you would only have to pay $22,765.00 in tax, plus your FBT of $9,000.00 which brings your total tax bill to $31,569.00, so you'd only be left with a few hundred dollars to pay.

The other possibility is that we could get Poulton (the Company Accountant) to increase the food component of your living away from home allowance. 48 During his evidence Mr Scheffer said he did not recall discussing FBT with the applicant. He does not even know what FBT is. There is no FBT in South Africa. Mr Scheffer nevertheless conceded that the notes the applicant said were taken by him during the discussion were in his handwriting except for some isolated words and figures. The notes contain calculations which take into account FBT, although the implications of those calculations are by no means clear. 49 Mr Scheffer also handed the applicant a document during the meeting which was headed "Statement of FBT Reportable Fringe Benefits Account for Income Year 2000". The document estimated that for the year ending 30 June 2000 the applicant had to pay a reportable FBT amount in the sum of $18,895. On 25 August 2000 Mr Poulton went through the FBT calculations set out in the Statement handed to the applicant by Mr Scheffer on 22 August. He said to the applicant, "Jonathon you need to pay the FBT". 50 On 30 August 2000 Mr Scheffer said to the applicant:

I need you to sign your letter of appointment on Monday (4 September 2000) I'm not happy with the one Lorraine did. 51 The applicant had not seen any letter of appointment and did not know to what Mr Scheffer was referring. Meanwhile the applicant did not receive a salary cheque for August 2000. He telephoned Mr Scheffer on 1 September 2000 who told him:

You'll get your cheque once you sign the letter of appointment.

The applicant explained to Mr Scheffer that he had not seen a letter of appointment and was not aware that it was conditionally limited to his salary payments. 52 On 4 September 2000 the applicant received a letter of appointment appointing him as business development manager. The letter was on DD letterhead. He read it and forwarded it to his solicitor. The terms of the letter required the applicant to report directly to the directors of "the company" and it set out his duties. The applicant was also required as a term of his appointment to work overtime on an ad hoc basis without being paid. The letter also contained a restraint clause which purported to prohibit the applicant for a period of 3 years following his termination from taking part in a number of business activities that may have any association with or connection to the proprietary interests of the Digicore group. Other terms to which the applicant would be subject if he chose to sign the letter were as follows:

You will receive a gross remuneration package of $6000 per month.

Benefits in existence as at 1 July will continue, and will include (a) DigiCore will provide you with health care cover for yourself and your family provided that Digicore determines and designates the appropriate health care insurer. (b) Digicore will provide you with a fully maintained motor vehicle registered in your name or a novated lease free of residual. The motor vehicle will be on par with a new Land Rover Discovery Tdi or equivalent value. (c) All maintenance and fuel records to be maintained by you and be available at all times. After hours fuel will be managed at the discretion of the Directors.

It is a condition of your employment that you have full use of a motor vehicle during all hours of your employment with this Company.

The company will deduct group tax and will pay superannuation based upon your salary.

Fringe benefits tax will be payable by you and the company will deduct from your salary any amounts due.

In the event that you wish to terminate your employment, you are required to give 15 (fifteen) days written notice to yourself. 53 Later on 4 September 2000 the applicant received a cheque in the sum of $2955.37 for reimbursement of Diners Club expenses. 54 Sometime in September 2000 the applicant spoke to Mr Scheffer about the contents of the letter of 20 July 2000 which advised him that the position of general manager had become redundant and that his employment with "the organisation" was terminated effective from 31 July 2000. The applicant explained to Mr Scheffer that he did not accept the termination and that he was still awaiting information on a new commission structure as well as his pay slip and details of other benefits. Mr Scheffer asked the applicant to compose a letter setting out these matters. On 19 September 2000 the applicant sent a letter to Mr Scheffer, marked to the attention of Mr Van Kempen and Mr Wasson. It said:

I refer to your letter of 20 July 2000, received by me on 1 August 2000.

I note that the letter purports to terminate my contract with DigiCore Technology Pty Limited. I also note that there is no issue raised as to my performance of the contract.

As you are aware, Digicore is an international organisation with Australian subsidiaries. I consider that I am employed by the principle international organisation. Whoever pays my salary within that structure is entirely a question for DigiCore and has no bearing upon my employment within the organisation.

I acknowledge that your letter of 20 July 2000 is a termination letter, however, I advise that I do not accept that termination. I have both elected and continue to perform the contract under which I was originally engaged.

I request that I am paid all moneys, hereto withheld, yet owed to me under my employment contract, as I have acted in good faith and continue to represent and promote both the company and Ctrack and generate business to the best of my ability and am thus undeniably entitled to be paid according to the terms agreed upon the commencement of my employment with the company. 55 The applicant then prepared and sent to Mr Scheffer a breakdown of all monies which he believed were owing to him by Digicore. He also sent Mr Scheffer a copy of his letter of appointment dated 14 June 1999 from DT (SA). 56 On 25 September 2000 Mr Scheffer in the presence of Mr Wasson handed the applicant a letter of the same date. The letter on DD letterhead withdrew the latest offer of employment to the applicant to the position of business development manager and summarily dismissed him from employment with Digicore. The letter said:

It is my understanding that you signed an Employment Contract with DigiCore Australia on the 26th November 1999 to be employed as General Manager.

When I met you on the 18th July to advise you of this position becoming redundant and giving you notice that your employment would cease effective 31st July 2000, you gave me no indication that you did not consider this agreement to be the one in force, covering your employment with the company. It comes as a surprise to me that you now allege a contract between yourself and a South African company, DigiCore Technology Pty Ltd.

I acknowledge that you have now supplied me with a copy of this alleged agreement.

We have been trying to engage you in a different capacity since 1st August but you have not accepted our employment offer. This offer is now officially withdrawn.

I suggest you take up the matter of your South African Employment Contract with the alleged Employer.

As you are no longer an employee of DigiCore Australia we require you to immediately vacate your office and return all Company assets and records in your possession. 57 During his evidence Mr Scheffer said that he decided to give the applicant the above letter when the applicant advised him that he did not consider himself employed by Digicore in Australia. Mr Van Kempen in his evidence said that when the applicant produced the letter of appointment from DT (SA) he was "flabbergasted". He said it "...took everybody by storm because we weren't aware of it ...we were paying the salary ...I think that's when everything came to a halt". Mr Van Kempen also said, "I ... never terminated his services. He decided he was employed somewhere else". Despite these sentiments the applicant contends that Mr Van Kempen knew of the existence of this document and that he arranged for Mr Scheffer to send it to the applicant in South Africa. 58 After he was handed the letter and told to leave the premises the applicant went to his office and packed up his personal possessions. He also retained a laptop computer, a Nokia mobile telephone and the C-Track unit which was fitted to his car. All of these items he said were the property of Digicore. 59 On 29 September 2000 the applicant called the Department of Immigration and Multicultural Affairs and informed a representative of his dismissal. On 4 October 2000 he was advised by Medibank Private that no payments had been received on his behalf since July 2000. On 5 October 2000 an invoice from Digicore Australia in the sum of $1,341.22 was received by the applicant's wife. The invoice did not contain a description of the item or items representing the sum charged except for the notation "Sale; Jooste Theresa" which appeared on the invoice. 60 On 10 October 2000 the applicant was telephoned by Mr Van Kempen who asked to meet the applicant. The applicant was again telephoned by Mr Van Kempen on 20 October 2000. At this stage there had been no meeting. Mr Van Kempen told the applicant that he needed to discuss with him FBT payable by the applicant on his vehicle. The applicant reminded Mr Van Kempen of a meeting on 28 May 1000 during which, according to the applicant, it had been decided that Digicore would pay the applicant's FBT on his motor vehicle at 98%. Mr Van Kempen responded:

[Y]es but at that stage we didn't know what it involved and didn't know how the system worked. 61 On 22 October 2000 at 4pm the applicant met with Mr Scheffer and Mr Van Kempen at the Novotel hotel in Wollongong. According to the applicant Mr Scheffer said to him:

There are two ways we can go. Its either our way or nothing. We know what you want. We are here to tell you what you'll get! The overseas contract nullifies your contract with DCA. We're not obliged to give you anything. We have obtained auditors information on the tax collected & tax deducted for you. You should have been taxed at 48%. That would equate to $20k. Your living away from home allowance would equate to $42k. If you sign the living away from home declaration, which you will do before we leave, the FBT cost to the company on the living away from home allowance is $12K. If you don't sign the Declaration the FBT cost is $30K more, some $42,407. You also have company assets valued at $8K in your possession.

You are entitled to $6K per month for two months as agreed.

Our offer is, we work together. We minimise tax payable. You keep all company assets. We pay you $10K. The company will take care of the FBT on either $42K or $12K and the FBT on $15K. The Company will provide an indemnity against the ATO seeking to recover tax from you. The Company would apply for a Sect 805 permanent visa for you. 62 The applicant then asked about his superannuation and private medical insurance. According to him Mr Scheffer said:

Don't worry about the small details this is what the deal is. 63 On 27 October 2000 the applicant sent by email to Mr Scheffer and Mr Van Kempen a response to the offer of 22 October. The email set out a proposed settlement and itemised a number of claims in the following terms: 1. Payments due under the contract of employment for August and September 2000 at the rate of $10,000 per month. $20,000 2. Notice pay. I note that the period of notice was actually backdated, but I would be willing to accept one month in this respect. $10,000 3. Severance pay; I would be willing to accept one moth in this respect, although I would certainly be entitled to a greater period in respect of notice and severance at law, in the context of my position with the organisation. $10,000 4. Leave pay; 17 days $7,800 5. Medical fund contributions Jul to Sep $1,260 6. Vehicle Fringe Benefits Tax $9,000 7. Expenses, in accordance with out agreement (May, Jun & Sept expenses) $3,700 Total $52,760

Indeed as the deduction and remission of tax is a matter for the employer, the payment of the correct figure to the ATO is an issue for you only. I note that the ATO appears willing to backdate any income tax concessions applicable upon the obtaining of a TFN, and this would no doubt assist your taxation liability. In this respect I would require a group certificate and tax indemnity for the ATO, as well as proof of any payment of my superannuation into an approved superannuation fund.

I will provide a signed living away from home allowance declaration.

I will return all 'company property' currently in safe keeping, as I have no use for it.

I will also waive any claim for future damages, calculated in accordance with my contract of employment, should you be willing to settle on the aforementioned basis. In this context, we note that both parties will inevitably incur substantial legal costs should this matter proceed on a litigated basis. However, certainly the onerous circumstances surrounding my summary dismissal, the fact that basic contractual provisions have been blatantly breached, and the failure to pay my contracted salary for over two months, as well the lack of reasonable notice, severance and leave pay involved in my termination, and my clean service record, would be viewed as harsh action. This will weigh heavily on the court's mind. Historically, in the face of similar circumstances substantial awards have to date been made in the NSW courts. These awards were well in excess of the easily justifiable amount claimed here. 64 On 14 November 2000 Mr Scheffer sent a response to the applicant's email. The response addressed to "Dear Jonathon" was in the following terms:

I have noted with interest the various implied threats which you have made about commencing litigation against us, but before you embark on that course I think you should carefully consider your position as it stands. We believe that it is quite clear, based upon your actions, that you never regarded yourself as being employed by us under the terms of any contract. I note that you apparently started to work for us under a contract signed in November 1999, (seemingly purporting to regularise a situation which had been in place since July 1999), and that, in fact, you appeared to work for a number of months generally in accordance with that contract. You will recall that in July of this year following a series of discussions, we met and you were advised that this company did not see the continuation of your role in your previous position as being viable and that we wanted you to assume a new role. Thereafter for about two months you apparently performed the new role as requested although you declined to sign any new contract. Finally, when these issues were raised with you in September you indicated in quite forceful terms that, in fact, you had never regarded yourself as being employed by this company and that, in fact, you regarded yourself as being employed by a South African company Digicore Technology (Pty) Limited. Your actions since that time have been consistent with your expressed belief in that regard as, I note, you have engaged in extensive correspondence with the South African company.

As I said earlier, I think you need to consider carefully whether you wish to go to court when it seems that you have made it very clear that you never regarded any contract of employment with us as really existing. I have seen all the claims you have made and it seems you're headed towards seeking assistance in terms of the Industrial Relations Act but it seems to me that you would be trying to say on one hand that you wanted your employment contract re-written for you but on the other hand you never regarded any contract as really being in existence.

I agree that there is a lot of sense in avoiding expensive litigation. So after you have considered the matters that I have raised in this letter you might want to contact me again so we can talk further and see if there is something we can do to obtain reasonable satisfaction for both parties.

I will unfortunately be away until 27th November but please call me on my mobile so that we can schedule a time convenient to both of us. Contract under which work performed by the applicant

65 Before embarking on an analysis of the relevant contract under which the applicant performed work, the preliminary step required by s106 is to identify the work the applicant performed. The necessity to decide this threshold jurisdictional issue was confirmed in the recent High Court decision of Fish v Solution 6 Holdings Limited [2006] HCA 22. At [18], Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ said:

The Act is concerned with matters industrial. The power given to the Commission by s106(1) to declare wholly or partly void or to vary certain contracts should be understood as hinged about the reference to performance of work in any industry. The first inquiry required by s106(1) is whether a person "performs work in any industry". What may be declared wholly or partly void or varied is any "contract" whereby a person performs that work. 66 In the decision of Batterham v QSR Limited [2006] HCA 23, delivered the same day as Fish v Solution 6 Holdings Limited, Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ re-affirmed the approach taken in the latter case to an inquiry under s 106:

The relevant provisions of the Act, and their history, are set out in the reasons given in Fish v Solution 6 Holdings Ltd . Those matters need not be repeated here. As explained in Fish v Solution 6 Holdings Ltd [6], to decide whether the Commission had jurisdiction to make the orders which the appellants seek, it is necessary first to identify whether Mr Batterham performs (or in this case, did perform) work in any industry. (It was not argued that anything turns on the fact that Mr Batterham was no longer performing the relevant work when he applied to the Commission.) Having identified the work that Mr Batterham performed, the next inquiry is what was the contract or arrangement (and any related condition or collateral arrangement) according to which (or in fulfilment of which, or in consequence of which) that work was performed? It is only that contract or arrangement which the Commission may declare void or vary. 67 The facts here disclose that the applicant commenced employment in Australia after signing an agreement with DT dated 24 May 1999. Under the terms of that agreement, the applicant was offered employment as a business development manager - Asia Pacific. According to the applicant's affidavit, after he signed the agreement he returned twice to South Africa, organised his affairs there and returned to Australia where he commenced his employment with DT. Shortly after his arrival in Australia, however, he was appointed to the position of general manager. He was told to use this title by Mr Wasson and Mr Van Kempen and was provided with business cards which described him as general manager. His responsibilities as general manager included sales development and distribution development, financial control resource management and general office requirements. Up until about January 2000, the applicant had a role monitoring the financial activities of the Digicore Group in Australia. Those duties were taken away from him by Mr Wasson after that date. Although the agreement dated 24 May 1999 was expressed to be made between the applicant and DT, it was common ground during the proceedings that DD at all times paid the applicant's salary and other entitlements. 68 While in South Africa, and prior to the applicant commencing his employment in Australia, he signed, on 14 June 1999, the letter of appointment with DT(SA). The document purported to engage the applicant's services in South Africa as a business development manager effective from 16 July 1999. Under the letter of appointment, the applicant's salary was expressed to be payable in South African currency (rand) and he was subject to a restraint clause which applied to the carrying on of business within the Republic of South Africa. 69 The letter of appointment in its terms never contemplated the performance of work by the applicant in Australia. The evidence led during the course of the proceedings also disclosed that the applicant never performed any work in accordance with the terms of the letter of appointment, or that there was any genuine intention held by either party to the agreement to that effect. 70 Under s 106 of the Act, the threshold requirement that an applicant perform work in any industry necessarily refers to the work being performed within New South Wales. There can be no doubt that the applicant, in accordance with the agreement dated 24 May 1999, performed work in New South Wales and was employed by DT, a corporation registered in New South Wales. In Old UGC, Inc v Industrial Relations Commission of New South Wales in Court Session [2006] HCA 24, the High Court considered whether an agreement referred to as the C&R Agreement was one whereby work was performed in any industry. The C&R Agreement, which was governed by the laws of Colorado in the United States of America, was held not to be for work performed in any industry. In the judgment, the majority addressed an issue as to whether contracts under which work may be performed in any industry in New South Wales but which were governed by foreign laws nevertheless fell within s 106 of the Act. At [22] and [23] of the judgment, Gummow, Hayne, Callinan and Crennan JJ observed:

22. In the appeal to this Court the Old UGC parties made submissions about the territorial reach of the unfair contract provisions of the Act and about the consequences of the parties to the C & R Agreement stipulating that the agreement was governed by the law of Colorado. But those were submissions that treated the relevant agreement as the hinge about which the operation of s 106 of the Act turned. For the reasons given in Fish v Solution 6 Holdings Ltd , that is not the preferable construction of the section. Rather, the section hinges upon the performance of work in any industry and where, as here, the work said to be in question was work in an industry in New South Wales, no question arises of extraterritorial reach of the legislation.

23. Nor is there any basis for concluding, as the Old UGC parties contended, that an agreement whose proper law is not the law of New South Wales but is an agreement whereby work is performed in an industry in New South Wales is not, on the true construction of s 106, within its reach. As Dixon J pointed out in Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society , there is a presumption that, unless a contrary intention appears, statutory provisions are understood as having no application to matters governed by foreign law. But that is a presumption about statutory construction and where, as here, the central conception upon which the relevant provisions fasten is the performance of work in an industry and the work in question was performed within the jurisdiction, no question of reading down the operation of the section according to territorial limitations arises. 71 The letter of appointment, in contrast, was made in South Africa and governed by the laws of South Africa. It was not an agreement whereby the applicant was to perform work in any industry in New South Wales. It therefore falls outside the Court's jurisdiction under s 106. 72 In final submissions, Mr Van Kempen and Mr Scheffer, through their counsel, Mr Perry, opposed a proposed amendment to the Summons. The proposed amendment sought to amend the original declaration in Claim No. 2 so that the agreement dated 24 May 1999 and the letter of appointment dated 16 June 1999, could be considered both conjunctively, and as separate and distinct contracts. Mr Perry contended that the addition of the word "or" constituted a different order which sought to introduce on the part of the applicant, "a potential ability ... to argue that the 14 June 1999 letter of appointment is not relevant to the contract with the first respondent. This would not be the same contract as that alleged originally". Reliance for this contention was based on the Court of Appeal decision of BEA Systems Pty Ltd v Industrial Relations Commission of New South Wales in Court Session & Anor (2005) 63 NSWLR 347. In that decision, Handle JA, with whom Mason P and Giles JA agreed, held that an application seeking to join an additional respondent to the summons for relief under s 106 could not succeed because the effect of the amendment would amount to an application for an order in respect of a different contract with the consequence that s 108B of the Act operated as a bar to the application. 73 In my view, BEA Systems Pty Ltd is distinguishable from the present circumstances. The contract under s 106 whereby work was performed by the applicant in New South Wales was the agreement dated 24 May 1999 and not the letter of appointment dated 16 June 1999. This means that the amendment sought could have no effect on the summons as originally framed. A consideration of the letter of appointment either conjoined or expressed in the alternative to the agreement achieves the same result. The letter of appointment is not relevant to this Court's jurisdiction under s 106 on either construction. 74 The contract under which the application performed the work was substantially varied on more than one occasion including the variations set out in the agreement signed by the applicant on 26 November 1999. That document purported to formalise the applicant's terms of employment as amended with a new employer, DA, which was at that time a non-existent legal entity. The agreement therefore was not legally enforceable as a contract. 75 The applicant contends that the 26 November 1999 agreement was both invalid and irrelevant. According to the applicant the only contract in existence throughout the period of the applicant's employment was the agreement dated 24 May 1999 between the applicant and DT. DD was also a party to an "arrangement" since it had assumed the obligation to pay the applicant's salary. 76 In my opinion the 26 November 1999 agreement represented an attempt to formalise in writing, and secure the applicant's agreement to, the variations which were made to the applicant's employment terms contained in the agreement dated 24 May 1999. It also constituted a continuation, subject to the variations, of the original terms of employment contained in the 24 May 1999 agreement. So characterised, the 24 May 1999 document and, the variations set out in the 26 November 1999 document formed the contract under which the applicant performed work. This contract continued and was the subject of further variations up to the time of the applicant's termination on 25 September 2000. Was the contract unfair ?

77 I turn now to consider whether the contract as defined was in all the circumstances unfair. 78 The agreement dated 24 May 1999 was in fact drafted by the applicant. The original terms and conditions in that document I do not understand to be the subject of any allegations of unfairness by the applicant. As the evidence has revealed, however, the terms of that agreement were unilaterally varied over a short period of time by some of the respondents and Mr Wasson. Moreover, the first of these variations was made at the time or very soon after the applicant commenced employment in New South Wales, sometime in July - August 1999. 79 The applicant returned to South Africa in early August 1999 and shortly after travelled back to Australia with his family. Upon his arrival in Australia in August 1999 he was told by both Mr Wasson and Mr Van Kempen to use the title of general manager. Business cards provided to him reflect this. Whether the change in title from business development manager (the position he was originally engaged to fill) to general manager resulted in additional duties was not explored in the evidence. Nevertheless it was a change made without consultation with the applicant and imposed upon him. I accept on the evidence that the applicant worked extremely hard in that position. He worked long hours during the week and often on weekends. He travelled extensively throughout the eastern Australian states and organised trade shows and presentations. His duties, as general manager, outlined earlier in this judgment encompassed a broad range of responsibilities including marketing, sales, administration, business development and, at least until sometime in either October 1999 or January 2000 some financial duties. At the same time the Digicore group employed only two full time operational staff, Julie Kidd and Steve Corna. The business of selling the C-Track product was in the very early stages of development. The evidence suggests that when the applicant commenced work, Mr Van Kempen had sold a small number of units (about 20) on an ad hoc basis from his garage. Negotiations had commenced but had not been finalised with Vodafone with a view to Vodafone acting as a distribution channel for the C-Track product. As at October and November 1999 a litany of outstanding faults in relation to the installation and utilisation of the product were itemised by Mr Van Kempen and Mr Corna. 80 It is against this background that the applicant commenced his employment as general manager with the Digicore group. In mid to late August 1999 shortly after the applicant commenced work, Mr Wasson announced that he intended to limit the terms of the applicant's agreement relating to commission on sales, to sales through a new company, DA. When the applicant protested, he was given the option of returning to South Africa. This variation reduced the applicant's ability to earn commission since it deprived him of earning any commission on sales of C-Track products made in the Asia-Pacific region. Apart from the fact that DA was never incorporated during the period of the applicant's employment, the scope of the intended operation of DA was restricted to Australia. This variation was sought to be formalised in the document signed by the applicant on 26 November 1999. A draft of that document had been handed to the applicant on 16 September by Mr Van Kempen. The draft sought to further reduce the applicant's capacity to earn commissions by limiting the commission payable to 1% on net profit of sales made by DA. 81 Towards the end of August 1999 the applicant was handed two documents by Mr Poulton. These documents both set out further unilateral changes to the applicant's terms of employment. The applicant raised his concerns with Mr Wasson. He was especially concerned that his proposed new employer was to be DA. This proposal had been discussed at a meeting held on 10 August 1999 attended by Mr Wasson, Mr Van Kempen and Mr Poulton, the minutes of which were recorded in a copy of the first document handed to the applicant by Mr Poulton. The applicant believed that the effect of the proposed change of employer would be detrimental to him. His present employer, DT owned the intellectual property rights to C-Track in Australia and had "regional headquarter status". 82 The significance of DT's "regional headquarter status" was not dealt with by either party in submissions. Regulation 1.16A of the Migration Regulations 1994 however, deals with regional headquarters agreements. The Regulation is expressed as follows:

If an organisation that has its head office outside Australia wishes to establish a regional headquarters in Australia, the Minister and the Industry Minister may enter into an agreement with the organisation to provide for the entry to, and stay in, Australia of staff members of the organisation for the purposes of the regional headquarters.

The applicant and his family relocated to Australia following representations that he would be assisted in obtaining a permanent residence visa after completion of two years sponsored employment with DT. Failure to successfully complete the two years by reason of termination of employment could result in the cancellation of a person's visa: s 137Q Migration Act 1958. For these reasons it was important that the applicant remain in the employ of DT for at least two years. 83 Another concern that the applicant had at the time was the suggestion in the letter that he was to pay FBT on his motor vehicle. According to the applicant, Mr Sauerbier had also prepared a draft budget for the Digicore group's operations in Australia. Item 29 of that draft headed "Fringe Benefits Tax" said: "98% of Item 24 car leases". The draft budget is handwritten and badly photo copied. It is not possible to properly read the contents of Item 24. It appears to mention a motor vehicle and associated costs including fuel costs. In any event, in my opinion the evidence is not sufficient to enable me to conclude that one or more of the respondents represented to the applicant that one of the conditions of his employment would be payment by the group of FBT payable on his motor vehicle. Mr Van Kempen denied being involved in any conversations with the applicant about FBT costs being met by Digicore. Mr Sauerbier on the evidence had no direct connection with the Digicore group's activities in Australia. Nor is the notation in the draft budget concerning FBT, apparently made by Mr Sauerbier, clear as to its precise meaning. The employment contract dated 24 May 1999 is silent on the issue of FBT. There is only a general reference to DT meeting "all costs" relating to "the purchase and registering in your name" of a motor vehicle. The applicant drafted the 24 May 1999 agreement. The opportunity therefore for certain specific conditions to be included in the document relating to FBT was available but not acted upon. 84 On 16 September 1999 Mr Van Kempen handed to the applicant the draft agreement purportedly made between DA which the applicant eventually signed on November 1999. This contained further variations to the applicant's terms of employment which had been discussed and arranged in the absence of the applicant. These variations have been referred to in some detail earlier in this judgment. The applicant vigorously negotiated with Mr Van Kempen and Mr Wasson in a bid to prevent the implementation of the variations, none of which were favourable to him. He was largely unsuccessful except for amendments to the document which provided for a 1% commission on gross sales and the restraint period which was reduced from 6 months to 3 months. The applicant was not aware when he signed the document that DA had not been incorporated. Certainly Mr Van Kempen and Mr Wasson were aware. In my opinion the applicant signed the document against his will and in the belief that he had little choice. Mr Wasson in the presence of Mr Van Kempen responded to the applicant's concerns about the document by telling the applicant he could either sign the document or go back to MTN (which was the applicant's former employer in South Africa). The applicant said that he signed the document because he was fearful that if he did not Mr Wasson and Mr Van Kempen would carry out their threat to send him back to South Africa. The applicant was dependant in no small measure on the good graces of both Mr Van Kempen and Mr Wasson for his continued employment in Australia at least for a period of 2 years to facilitate his obtaining a permanent residence visa. These circumstances effectively placed the applicant in an unequal bargaining position with the respondents. Because of the requirement that he remain employed for some 2 years the applicant was in no position to dictate any favourable employment terms. Mr Van Kempen and Mr Wasson at least were aware of the applicant's predicament and in a position to take advantage of it. 85 On 1 July 2000 Mr Scheffer commenced working for the Digicore Group's operations in Australia. He was Mr Wasson's uncle. The applicant from the time of Mr Scheffer's arrival was required to report to him and Mr Wasson. Mr Scheffer gave evidence that he became involved in the business in Australia after discussions with Mr Wasson. He did not see any historical documents nor did he see any trading accounts for the business. He placed his absolute trust in Mr Wasson. Upon his introduction to the business as a finance director he became aware that the minute books were not up to date. He sought to make things run on a stricter and more formal basis. He discovered the business was performing poorly. He also became aware that Mr Wasson was accessing company funds for his own personal benefit. Despite these matters and the fact that Mr Scheffer had no knowledge of Digicore's customer base Mr Scheffer decided that the applicant's performance was "woefully inadequate". 86 In his affidavit Mr Scheffer said that it was apparent to him at the outset that the Australian operations of Digicore were in a "parlous state". The profit and loss statement for the financial year ended 30 June 2000 showed that the total income for the previous 12 months was $377,000 and that DD had suffered a net loss of about $650,000. He sought to blame the applicant principally for this loss. He informed the applicant that the position of general manager was superfluous but that he could offer the applicant a position looking after sales and distribution for $6,000 a month. On 1 August 2000 the applicant received a letter dated 20 July 2000 which was signed by Mr Scheffer and informed the applicant that his employment with the organisation had ceased on 31 July 2000 but that a new position of business development manager would become available on 1 August 2000, on a starting salary package of $6,000 per month. The applicant who had earlier told Mr Scheffer he could not survive on this salary sought legal advice. He continued meanwhile to work at Digicore undertaking the same duties. During this period and up to the time of his termination he was beset by work related problems. First he was served with an eviction notice. It emerged that DD had not been paying the rent on the applicant's home. The applicant received no salary cheque for August 2000. When he contacted Mr Scheffer about this the applicant said he was informed that he would not receive a salary cheque until he signed a letter of appointment accepting the position of business development manager at $6,000 per month. At that stage the applicant had not seen a letter of appointment. The applicant had also not been reimbursed for Diners Club business expenses. 87 In my opinion Mr Scheffer's description of the applicant's performance as "woefully inadequate" had little if any basis on the evidence. This view in fact was expressly contradicted by a number of the Digicore group's Australian clients and associates who dealt directly with the applicant during the period of his employment. Mr Kelly for example, a director of Nu-Tech communications, a company which acted as an agent in Australia selling the C-Track product, appeared to have a good working relationship with the applicant. He was surprised that the applicant's employment had been terminated. Shortly after the applicant's dismissal Mr Kelly decided not to buy the C-Track product from Digicore anymore. A customer, Val Gomez of Bunker Freight Lines sent an email to a senior representative of the Digicore group in South Africa expressing his concern upon hearing that the applicant was no longer in the employ of the Digicore group in Australia. He described the applicant as "...one of the people in Australia behind the (C-Track) product that instilled the faith I needed to make the final decision to purchase C-Track and suddenly he is gone... I hope Mr Jooste's replacement can deliver the same care and customer service I have had the pleasure of enjoying in the past". 88 Following discussions with Mr Scheffer concerning the decision to make the position of general manager redundant and to terminate his employment the applicant, at Mr Scheffer's request, drafted the letter informing Messrs Scheffer, Wasson and Van Kempen that he did not accept the termination and enclosing a copy of the South African letter of appointment. Mr Scheffer decided on the basis of the South African document to summarily dismiss the applicant. According to Mr Scheffer this was because the applicant did not consider himself employed by Digicore in Australia. Mr Van Kempen who professed to be "flabbergasted" when the letter of appointment was produced, simply said "I... never terminated his services. He decided he was employed somewhere else". 89 The reaction of Mr Scheffer and Mr Van Kempen to the existence of the letter of appointment is puzzling. It must have been clear to both that the applicant was working full-time for the Digicore group in Australia. There is no suggestion on the evidence that the applicant was receiving a salary from the group in South Africa or that Mr Scheffer and Mr Van Kempen thought as much. It is difficult to see how the existence of the letter of appointment could have provided a justification for the applicant's termination. Mr Scheffer in evidence conceded that Digicore in Australia could not afford to pay the applicant his salary for August 2000. In any event the applicant was afforded no opportunity to apply for other employment pending his termination or indeed any opportunity to make alternative suitable arrangements with the immigration authorities as to his capacity to remain and work in Australia. Instead the applicant was directed to vacate his office and leave the premises immediately without receipt of any termination payment. 90 In my opinion the circumstances of the applicant's termination described above on 25 September 2000 were without any reasonable justification and were unfair under the Act. 91 I find that the applicant's contract with regard to his employment with the Digicore group in Australia was unfair for the reasons outlined above. First, the unilateral variations made to the applicant's employment conditions which were unsuccessfully resisted by the applicant and unfavourable to him, and, which were imposed throughout the period of his employment were unfair. Secondly, the re-location of the applicant and his family from South Africa in anticipation that he would be gainfully employed in long-term employment by the Digicore group was unfair since the applicant was encouraged to do so by the Digicore Group in Australia, principally at that stage by Mr Van Kempen. Thirdly, the inability of the applicant to bargain from a position of strength against the various unilateral and unfavourable changes which were made was unfair because of his dependency on the continuation of his employment with DT for at least 2 years. Fourthly, the actions of the respondents in imposing on the applicant a requirement that he sign a document purporting to be a contract of employment containing less favourable conditions of employment with a non-existent legal entity thereby substantially reducing his employment benefits as well as placing his immigration status in Australia in a state of uncertainty was unfair. Fifthly, the circumstances of his termination and the attempted reliance on the South African letter of appointment as a justification to summarily dismiss the applicant thereby avoiding the making of any termination payments was, for the reasons I have earlier given, also unfair. 92 One further factor which should be disposed of at this juncture concerns the issue of the credibility of Mr Scheffer's and Mr Van Kempen's evidence given during the proceedings. The issue was raised by the applicant in final submissions. In my opinion where Mr Van Kempen's evidence has expressly contradicted the applicant's evidence I would prefer the evidence of the applicant. Mr Van Kempen in evidence failed to recall what I would consider to be key conversations. The context in which this failed recollection occurred was that Mr Van Kempen was at all relevant times a director and company secretary of several of the respondent companies as well as a major shareholder. He did not recall, for example, Mr Wasson's response to the applicant that he either sign the draft agreement with DA (which was eventually signed on 26 November 1999) or return to South Africa and resume employment with MTN. Such an extraordinary and callous response given the circumstances in which it took place, (the applicant was raising concerns about reduced entitlements sought to be unilaterally imposed upon him) would not be easily forgotten. In addition, despite extensive cross-examination, Mr Van Kempen professed to know nothing of Mr Wasson's unauthorised removal and use of company funds in order to finance his motorcross activities. Mr Scheffer in evidence on the other hand said that he had discussed the issue with Mr Van Kempen. It would be surprising in my view if Mr Scheffer had not discussed the issue with Mr Van Kempen. It was a matter of significance to the Digicore group's operations particularly as the evidence suggests, the group was performing poorly financially. At that time Mr Scheffer was aware that the Digicore group was performing badly. Adding to the financial concerns was his discovery that Mr Wasson was removing substantial amounts of company monies without authorisation and not repaying them. It is reasonable to assume that Mr Van Kempen as a director, company secretary and majority shareholder of those companies would be notified. Again such information is unlikely to have been imparted and then forgotten. 93 The applicant also submits that Mr Scheffer's evidence on some issues, "should generally not be accepted". The apparent basis for this submission is that in several respects Mr Scheffer's evidence changed during the course of his cross-examination. In my view however Mr Scheffer's evidence where it diverged on matters as to dates and times or with respect to amounts of money, without more, would not justify the conclusion that that evidence was unreliable or otherwise lacked credibility. One aspect of Mr Scheffer's evidence which is sought to be impugned concerns whether or not he sought to negotiate a higher commission structure for the applicant following his advice to the applicant that the position of general manager had been made redundant. Mr Scheffer's evidence was that "we" offered the applicant 2% of profits on gross sales (as commission). According to Mr Scheffer the rationale for this was to get the applicant to perform in terms of sales and thereby increase his income. Having made this proposal to the applicant Mr Scheffer said he did not have further discussions on the point because he was waiting for the applicant to get back to him. According to the applicant Mr Scheffer on 18 July 2000 after advising him the position of general manager had been made redundant said to him:

There will be some commission and benefits similar to what you've been enjoying historically. This will be a phase commission. I'll get back to you about another meeting where we'll sort it all out. The applicant said:

I need full details on what you're offering. I need a pro forma payslip and details about what you mean about "some commission" so I can understand what it is you are proposing.

Both versions clearly concede some discussion concerning the anticipated payments by way of commission. The differences in the two versions are not in my view readily explicable on the basis that one is lacking credibility. It may be simply that with the passage of time recollections are not as precise. In the absence of other material which might facilitate an adverse factual finding being made I am unable to make such a finding against Mr Scheffer. 94 One further matter upon which the applicant relies in relation to credibility findings which are sought to be made against Mr Scheffer concerns Mr Scheffer's denial in cross-examination that he threatened the applicant that unless he signed the new offer of employment outlined in the letter of 4 September 2000, he would not be paid his salary for August 2000. The applicant submits that the basis upon which the Court may prefer the applicant's evidence on this point is that Mr Scheffer's affidavit is silent on the matter although various other allegations raised by the applicant have been met in Mr Scheffer's affidavit. 95 It does not follow however that an adverse finding may be open because one of a number of allegations made in an affidavit of an opposing party, has not been met in an affidavit in reply. There is no issue that the applicant was not paid his salary for August 2000 or indeed for September 2000. One explanation given for this was that the Digicore group had insufficient funds. Given the companies' poor financial state at that time this may well have been the correct explanation. In any event whether Mr Scheffer threatened the applicant with the words suggested by the applicant is not a matter which in my view is central to his application. I therefore decline to make any adverse finding against Mr Scheffer on this aspect of the evidence. 96 Before turning to consider what, if any, monetary relief may be available to the applicant there is one final issue raised by Messrs Van Kempen and Scheffer in submissions which should be addressed. This issue concerns the agreement dated 24 May 1999. Messrs Van Kempen and Scheffer contend that there was nothing unfair in the terms of this agreement and that the claims put forward by the applicant which relate to allegations of unfair conduct really amount to a claim for the breach of contract, therefore placing the agreement outside the jurisdictional reach of s 106: see Sydney Water Corporation v NSW Industrial Relations Commission & Anor (2004) 61 NSWLR 661. 97 The applicant's case in relation to the contract dated 24 May 1999 has been framed as one which became unfair in its terms by reason of certain conduct engaged in by the respondents in varying those terms and in failing to provide other terms. That conduct was directly referable to what the contract in its terms then permitted, (for example, the reduction of the applicant's salary to $6,000 per month). Relief against this kind of conduct is specifically provided for in the Act: s 106(2). The applicant's case was also put on the basis of what the contract failed to provide (for example, fair termination procedures). Moreover, the applicant's application by way of further amended summons for relief under s 106 has not been pleaded as being based on a breach of contract. But even if it had been so framed, at least in part, it would not necessarily have precluded the applicant from seeking relief: Sydney Water Corporation and Anor at [40]. The unfairness upon which the applicant placed reliance arises from a number of circumstances which have already been dealt with in this judgment. These include the unilateral variations to the applicant's terms of employment which were unfavourable to him; and, the unfair procedures invoked against the applicant at the time of his termination. All of these matters in my opinion fall within the jurisdictional scope of s 106 of the Act. 98 Having given careful consideration to all the matters raised by the parties which are relevant to an assessment as to whether the contract was unfair under the provisions of s 106 of the Act I find on balance that the impugned contract was unfair in its terms as alleged by the applicant, except for those matters pertaining to the issue of whether it was a term or condition of the contract that the respondent would pay the applicant's FBT. In relation to the issue of FBT I have found that the evidence is not sufficient to enable me to conclude on balance in the applicant's favour that there was an agreement between the parties that the respondents would pay the applicant's FBT on his motor vehicle. Orders sought

99 The applicant seeks the following monetary orders: Claim Amount 12 months termination pay (including any redundancy) $120,000 (12 x $10,000) 12 months car lease benefits $12,681.72 (12 x $1,056.81) 12 months car registration/CTP insurance $934.10 12 months health fund $3,600 (12 x $300) Unpaid wages $20,000 Approved Business expenses $1,850.34 (Diners Club for May 2000) Approved Business expenses $1,096.23 (Diners Club for June 2000) Annual leave (22 days accrued in 403 days less 7 taken) $7,541.10 Unpaid Superannuation (at 7% for 403 days) $8,227.52 ($9,274.52 less $1047.15 paid) Interest Total $175,931.01

100 The first claim seeks twelve months termination "including any redundancy". The circumstances of the applicant's termination in my view can not be accurately described as a redundancy. The applicant was summarily dismissed from his employment. Although at the meeting of 18 July 2000 during which Mr Scheffer informed the applicant that the position of general manager had been made redundant, the applicant continued to work undertaking the same duties up to his dismissal on 25 September 2000. Although the applicant had been offered the alternative position of business development manager on a reduced salary the applicant never took the position. He continued to perform the same duties as before. In relation to the reduced salary the evidence suggests that for the last two months of the applicant's employment he received no salary at all. It is also noteworthy on the issue of redundancy that the applicant's case concerning the circumstances of his termination relied to a large extent upon the perceived animosity of Mr Wasson towards the applicant and his efforts to systematically remove the applicant from employment within the Digicore group in Australia. The applicant did not present a case on the basis for example that the real cause of the applicant's termination was an attempt by the respondents to stabilise the financial position of the group: cf Bates v Finance Australia Pty Ltd [2002] NSWIRComm 42 at [69]. 101 The contract dated 24 May 1999 contained no provisions in relation to termination. The document signed by the applicant on 26 November 1999 contained a term which purported to reserve to "Digicore" the right to terminate "the contract" at any time, "...based on the circumstances and with the approval of the directors and in the normal legal terms". It is not at all clear to me what was intended to be meant by the phrase "...in the normal legal terms" but in my view the contract may be approached on the basis that it failed to provide for any payment on the termination of the applicant's employment. This is in accordance with the order sought in the summons. 102 Messrs Van Kempen and Scheffer contend that the applicant was on notice from either 20 July 2000 or 1 August 2000 that his position as general manager was being made redundant. Therefore any payment in lieu of notice ordered by the Court should be for three months commencing from either of those two dates but such order should not be made against them. The respondent's alternative position in the event a payment in lieu of notice is ordered is to limit any payment for which an order may be made to 10 November 2000. The significance of this date is that on that day an executive of the South African Digicore group Nick Volk offered the applicant a position as a support manager in a mining town in South Africa called Witbank. 103 The applicant submits that he is entitled to twelve months payment as compensation for the circumstances of his termination. 104 The applicant was employed or worked for the Digicore group in Australia from sometime in July 1999 until 25 September 2000, that is, a period of about fifteen months. Although this was not a particularly lengthy period of employment a combination of other relevant factors in my view justify a payment being made to the applicant in lieu of notice (as opposed to compensation for the loss of entitlements more relevant to a severance payment) of four months at $10,000 per month. In addition the applicant should be paid his outstanding salary entitlements for August and September 2000 at $10,000 a month, a total of $60,000. The factors which in my view justify these payments may be conveniently set out in point form below: · the applicant occupied a relatively senior position while employed by the Digicore group. His duties and responsibilities were extensive, he worked long hours and had the support only of two full-time operational staff: Ross v GN Comtext (Australia) Pty Limited (2000) 107 IR 1 at [36]. · he was enticed to relocate from Australia from South Africa by Mr Van Kempen and others. In doing so the applicant gave up secure employment and sold his family home. His wife also left secure employment and his daughter's enrolment in a private school was cancelled. The applicant was told that if he moved to Australia and worked for the Digicore group he would be offered a directorship as well as shares. He was also given to understand that the C-Track product had good prospects for success on the Australian market and that the business would correspondingly flourish: Ross v GN Comtext at [35]. · the applicant was permitted to form the expectation that his employment would be long term. He leased a rental property in Wollongong and sold his material possessions including the family home in South Africa with a view to permanently relocating to Australia: Ross v GN Comtext at [35]. · because of the requirement that the applicant remain employed with a sponsor for a continuous period of two years in order to qualify for a permanent residence visa, the applicant was dependant upon DT as his sponsorship employer to maintain him in continuous employment throughout that period. In addition the applicant's capacity to obtain other employment in the event of termination prior to the two years period was severely restricted by the requirement to obtain sponsorship for a specified period: Ross v GN Comtext at [36]. 105 The payment to the applicant in lieu of notice also takes into account the applicant's efforts to mitigate his loss under s 106(6) of the Act. Messrs Van Kempen and Scheffer contended that the applicant was offered the position of support manager in Witbank, South Africa, on about 10 November 2000. The applicant declined the offer and accordingly the principle of mitigation should apply. 106 As a preliminary proposition the principle, although it must be taken into account as required by the sub-section need not be applied strictly in all cases. The application of the principle has been qualified, for example, in a number of cases by considerations as to whether an applicant has behaved unreasonably in seeking alternative employment: see Ross v GN Comtext at [57]. The applicant's circumstances in this regard are not dissimilar to the circumstances which confronted the applicant in Ross v GN Comtext. In that decision the applicant had relocated from the United Kingdom in order to work in Australia for a related corporation. Following his termination on the ground of redundancy after only several months employment in Australia the applicant was apparently given the opportunity of returning to the United Kingdom to resume his earlier employment there. He declined to do so. Walton J, Vice-President found that the applicant, who had concentrated his efforts on obtaining other employment in Australia, had not acted unreasonably. He was residing in Australia with his family and had entered into a lease on a rental property. He had sought employment through a range of sources in Australia. Taking into account these considerations his Honour concluded that it was not appropriate to reduce any payment order made on the basis of the principle of mitigation. 107 The applicant in the present matter also relocated his family from a foreign country in order to take up employment in Australia. During the period of his employment here, for fifteen months, he applied for a permanent residence visa relying on his employer, DT, to maintain him in continuous employment for the required period of two years. The offer of employment made by the South African group for the position of support manager in Witbank may not have eventuated as a realistic proposition in any event. The suggestion on the evidence, advanced by Messrs Van Kempen and Scheffer was that in about November 2000 the sales office in Witbank closed down leaving only technical staff to continue operations there. In all of these circumstances I find that the applicant made all reasonable efforts to secure other employment in Australia following his dismissal. The applicant in fact obtained full-time employment with Nu-Tech Communications in about March or April 2001. Other entitlements

108 The applicant also seeks his accrued entitlements to annual leave and superannuation as well as costs associated with the use of his motor vehicle during the period of his employment, unpaid health fund payments during the same period and unpaid approved business expenses in relation to the use of his Diner's Club card for the months of May and June 2000. The actual amounts claimed in relation to each item have been set out earlier in this judgment. Messrs Van Kempen and Scheffer have not addressed the Court on whether such entitlements are payable, and, if so by whom. In the absence of any submissions or contrary evidence led on this issue by any of the respondents I am satisfied that appropriate orders should be made in order to recompense the applicant for the outstanding amounts. Interest

109 Interest should also be payable from the date of the application, that is, from 27 April 2001 until the date of judgment: Abboud v NSW (Department of School Education) (No 2) (2000) 99 IR 299. Respondents' liability to pay monetary amounts

110 It remains to consider if any of the respondents against whom the applicant is proceeding may be found liable either jointly or severally, for moneys payable to the applicant consequent upon the findings of unfairness which I have made. 111 The applicant seeks orders against DT, DA, Mr Van Kempen, Mr Scheffer and TH. I propose to separately consider whether each or any of these respondents should be liable to pay monetary orders to the applicant under s 106(5) of the Act. 112 Before doing so it may be appropriate to briefly visit the principles applicable to circumstances where parties as well as non-parties to a contract found to be unfair may be found liable to pay monetary orders. The authority most closely associated with the expression of those principles is the High Court judgment of Brown and Others v Rezitis and Others (1970) 127 CLR 157. In that judgment the High Court considered whether a number of parties including two shareholders of the employer corporation, who held shares in trust for the manager of the corporation, were liable for monetary orders made against them at first instance under s 106(5). In holding that the orders made against the two shareholders constituted an excess of jurisdiction the High Court considered the terms of s 88F (a predecessor section to s 106(5)) which provides that money orders may be made "in connection with any contract declared wholly or partly void, or varied...". Barwick CJ at 164 - 166 said:

In some cases, as I have said, there will be persons who are not the parties to the contract but who have in fact participated in its making and there may be persons who have received money indirectly from one of the parties to the contract or who may be holding money derived therefrom for one of the parties. Consequently, I am of opinion that the power to order the payment of money is not limited to the making of an order for the payment of money by one of the parties to the contract or arrangement varied or avoided.

But though there is a generality in the language employed in the sub-section the power to make an order for the payment of money is not, in my opinion, unlimited particularly as to the persons against whom such an order may be made. The problem is to ascertain the limitation by construction of the section. It seems to me that the expression "in connection with" the contract or arrangement varied or avoided provides the necessary limitation as to the nature of the orders for payment of money which can be made and as to the person against whom they may be made. The draftsmanship of the section is inadequate: but I think the expressed intention as to this limitation can be derived from the sub-section read as a whole. Whilst it can be said that the expression "in connection with" is of wide import, it does emphasize the need for a close connexion between the order made and the contract or arrangement varied or avoided. In my opinion, the power to make an order for the payment of money is at best no more than a power to make such an order as can reasonably be thought to have a real connexion with the making, variation or avoidance of the contract or arrangement which has been varied or avoided. It may in truth be limited to a power to make an order for payment of money which has in fact a real connexion with the making, variation or avoidance of the contract or arrangement. However, in either case it will, of course, include power to make an order for payment of money which has been paid or which was payable under the contract arrangements themselves. But, in my opinion, the power will not be limited to the making of such orders. It will extend to ordering the payment of money where the order on the larger view of the jurisdiction given by the sub-section could be considered to be appropriate to effect wholly or partially the restitution of the parties to their former position upon the variation or avoidance of the contract or arrangement. In my opinion, the limitation of the power to order the payment of money to such orders either as are or as may be considered in the circumstances to be connected with the making, performance, variation or avoidance of the contract or arrangement sufficiently limits the power and leaves room for supervision of the Commission by a Court having power to issue prerogative writs so as to confine the Commission within the granted power. Consequently I am unable to accept the submission made by the appellants that an order made by the Commission for the payment of money by any person other than a party to the contract or arrangement varied or avoided is necessarily beyond the power of the Commission. Whether or not it is so depends upon all the circumstances and the terms of the order itself. 113 In relation to the two shareholders Barwick CJ at 167 - 168 said:

Assuming that the Commission was entitled to go behind the incorporation of the company and to include its managers and shareholders in the orders for payment of money made in the case - and, as at present advised, I see no reason why under a section such as s. 88F the Commission should not do so - it seems to me that persons who were not beneficial shareholders could not be included in an order for the payment of money made in connexion with the varied or avoided contract or arrangement merely because they held shares in the company on trust for some known person, even if that person had been connected with the making or operation of the contract or arrangement.

The only other basis for an order for payment of money against these appellants in this case could be that they had received the proceeds of the contract or arrangement or were in some way culpably associated with its making or operation. But, though one of them received money from the company apparently without giving any consideration therefor, I can see no evidence of any connexion between that payment and the formation or execution of the contract. Further, in any case, in my opinion, an order for the payment by these appellants of a sum of money which was not limited in amount to represent their association with the making or execution of the contract could not be thought in the circumstances of the case to be an order for the payment of money in connexion with the contract or arrangement. 114 In the same judgment Menzies J also considered the jurisdictional reach of what is now s 106(5). At 170 his Honour said:

It seems to me, without exhausting the meaning of the phrase, that a payment of money in respect of (1) work done, or (2) money spent, or (3) obligations incurred, under the avoided contract or arrangement, is properly to be regarded as a payment in connexion therewith so long as the person who is ordered to make the payment is a person who was connected in some way with the making of the contract, or the work done, or the expenditure made, or the obligation incurred thereunder. 115 The principles formulated in Brown v Rezitis were recently revisited in this jurisdiction by the Full Bench in AFMEPKIU, New South Wales Branch v David & Ors [2006] NSWIRComm 206. In that decision the Full Bench held that an order made at first instance refusing an applicant leave to join Digital Graphics Communications Pty Ltd as a respondent to an application under s 106 was an error. The Full Bench found that there was a, "real and close connection" between that corporation and another respondent corporation because of the transfer of business which had the potential effect of operating as a subterfuge aimed at defeating the applicant's claims. As a result of the transfer, Digital Graphics Communications may have received the benefit of the transferee corporation's business, namely its goodwill, which had been built up as a consequence of contractual arrangements said to be unfair. The transfer of the business according to the Full Bench was effected, arguably to defeat the applicant's claim, thereby establishing a "sufficient connection" to warrant the joinder of Digital Graphics Communications. Whether DT liable for monetary orders

116 It has been established on the evidence that DT was the applicant's nominated employer in the agreement dated 24 May 1999. This document although not alleged to contain any unfair terms or conditions when first created and signed was later varied as to those terms and conditions with the result that the contract became unfair. It may be inferred in my opinion that DT was involved in the imposition of those variations to the applicant's original terms of employment by reason of its continued status as his employer. This is so because the later agreement dated 26 November 1999 purporting to be between the applicant and DA was no agreement at all. DA at the time had not been incorporated. Moreover, the applicant continued to work after 26 November 1999 for the Digicore group in Australia until he was dismissed. During that period he performed the same duties and responsibilities except for some financial duties which had been taken from him sometime in either October 1999 or January 2000. In the absence of any evidence to the contrary the inference is therefore available and I so find that DT was the applicant's employer up until 25 September 2000. This provides sufficient foundation for the requirement under s 106(5) that a monetary order contemplated against a party must be "in connection with" a contract or arrangement etc to be voided or varied. Whether DA is liable to pay monetary orders

117 The next consideration is whether s 106(5) has any application to DA. The issue may be disposed of shortly. DA simply did not exist at any time throughout the applicant's period of employment. It was not incorporated until 4 October 2000. Nor has there been any evidence that following the applicant's termination and after DA was incorporated it benefitted either directly or indirectly from the receipt of monies from either the applicant, or from holding monies derived from a party to the contract on behalf of one of those parties, or participated in, or, was in some other way culpably associated with the making or operation of the contract. The evidence therefore does not establish that DA had any real or sufficient connection with the contract sought to be voided or varied. The Court therefore has no jurisdiction to apply s 106(5) to DA. Whether Mr Van Kempen and/or Mr Scheffer are liable to pay monetary orders

118 By contrast, in my opinion both Mr Van Kempen and Mr Scheffer were instrumental in imposing on the applicant the variations made to the contract and in the circumstances of the applicant's termination. Mr Van Kempen played a central role in the making of the contract. The evidence which establishes these findings has already been canvassed in detail. 119 In relation to the making of the contract Mr Van Kempen approached the applicant in South Africa with an offer to work in Australia for the Digicore group. He promised the applicant shares in the profits of the business once that business was established. Mr Van Kempen's representations were influential in encouraging the applicant to re-locate with his family to Australia. He was otherwise involved in pre-contractual negotiations leading up to the agreement signed on 24 May 1999. Mr Van Kempen was also a party to the numerous variations made to the applicant's initial terms of employment none of which were favourable to the applicant and many of which I have found operated unfairly against the applicant's interests. These variations included the reduction of the applicant's commission to DA sales only thereby limiting the applicant's ability to earn commission on sales of the C-Track product made in the Asia-Pacific region. The attempted change of employer from DT to DA created uncertainty for the applicant in regard to his immigration status. It also placed the applicant in a position of inferior bargaining status when it came to signing the 26 November 1999 agreement. Mr Van Kempen handed the applicant a draft of that agreement in September 1999. It contained substantial variations to the terms of the applicant's employment which were sought to be unilaterally imposed on him without consultation by Mr Van Kempen and Mr Wasson. As director, company secretary and shareholder of most of the Digicore group companies in Australia at that time, Mr Van Kempen was aware of the applicant's predicament and in a position to take advantage of it. 120 Mr Scheffer who became actively involved in the Digicore group in Australia some time in mid 2000 took on the role of finance manager. He formed the view that the applicant's work performance was "woefully inadequate" notwithstanding the absence of any basis for such a view. He cited no historical records or trading accounts of the group and knew nothing of the group's customer base. Soon after, he became aware that Mr Wasson was removing company funds for personal use without authorisation. At the same time Mr Scheffer discovered the extent of the group's financial position which he described as being in a "parlous state". He was instrumental in imposing further variations on the applicant's terms of employment which reduced his salary to $6,000 per month. He sought to make the applicant's position as general manager redundant. All of those variations were sought to be made without any consultation with the applicant and without the applicant's knowledge. At about the same time the applicant received an eviction notice because his rent had not been paid by DD; his Diner's Club business expenses were not paid and he received no salary for the months of August and September 2000. Both Mr Scheffer and Mr Van Kempen must have been aware of these matters given their respective positions as directors of the various corporations within the local Digicore group. The decision to terminate the applicant's employment was one made by Mr Scheffer, Mr Van Kempen and Mr Wasson. Mr Van Kempen was necessarily aware of the circumstances of the termination, as his reaction to the South African letter of appointment attests. 121 These matters provide a sufficient foundation for establishing the liability of Mr Van Kempen and Mr Scheffer under s 106(5) by reason of their participation in and their culpable association with the making, variation and termination of the contract. In my opinion Mr Van Kempen and Mr Scheffer must jointly with DT bear responsibility for the unfairness of the contract. Mr Van Kempen and Mr Scheffer were both directors of DT and DD with the authority to take appropriate action to prevent any unfairness to the terms of the contract. Instead they were primarily responsible for it. 122 Mr Van Kempen and Mr Scheffer have submitted through their counsel, Mr Perry, that Mr Wasson, DI(SA), DT(SA) and Mr Sauerbier were all culpably associated with the failure of the Australian operations and that Mr Wasson and Mr Sauerbier should also take responsibility for any unfairness found in the applicant's terms of employment. According to Mr Van Kempen and Mr Scheffer, Mr Sauerbier, the managing director and founder of the "South African organisation" was closely involved in the pre-contractual negotiations leading up to the applicant's employment in Australia. This may be so but, in my view, there is little or no evidence of any further involvement by Mr Sauerbier at the time the agreement of 24 May 1999 was signed or at any subsequent time. Mr Sauerbier is not a party to the application and at no stage during these proceedings was any application made by any of the parties to join him as a respondent. In these circumstances I am unable to conclude whether Mr Sauerbier benefitted, participated or was in any way culpably associated with the making of or variations to the contract or in the circumstances of the applicants termination. The same may be said of DI(SA) and DT(SA). The evidence is not sufficient to enable the Court to conclude that those respondents benefitted, participated or were otherwise culpably associated with the contract or with the applicant's termination. No submissions have been advanced beyond the assertion that the "South African organisation" was in some way culpably associated with the failure of the Australian operations. 123 Mr Wasson on the other hand was, on the evidence earlier referred to in this judgment, involved in the variations to the contract and in the circumstances of the applicant's termination. Like Mr Sauerbier, however, no application has been made at any stage of the proceedings to join Mr Wasson as a party to the application. Notably, none of the respondents made such an application. Mr Wasson's involvement therefore does not affect my assessment that DT, Mr Van Kempen and Mr Scheffer should be jointly liable for monetary orders which may be made under s 106(5). Whether TH is liable to pay monetary orders

124 It remains to consider whether TH may be liable for monetary orders under s 106 (5). 125 The applicant submits that TH's liability to pay monetary orders arises from its status as a principal shareholder of DT and its, "100% ownership of DD". It was also submitted that TH was "the beneficiary" of Mr Wasson's and Mr Scheffer's actions in respect of, "DT, DD and the applicant". No submissions were advanced as to how TH was said to have benefitted from those actions. On the available evidence TH acquired 50% of the shares in DT as a beneficial shareholder in May 2000 and provided a loan to DT in the sum of $500,000 in about April 2000. These matters alone would not provide the necessary real, close or sufficient connection to the impugned contract in order to facilitate the making of orders under s 106(5): Brown v Rezitis at 167, 168. There is no evidence apart from the evidence in relation to TH's beneficial shareholding status in DT that TH in any way benefitted from participated in or was otherwise culpably associated with the actions of either Mr Wasson or Mr Scheffer in respect of the contract between the applicant and DT. In these circumstances the Court has no jurisdiction to make monetary orders under s 106(5) against TH. 126 The applicant seeks in the first instance that the contract is voided. Bearing in mind that the contract has come to an end this seems the appropriate course except to the extent of any monies paid to the applicant. Orders 127 I make the following orders consequent upon the findings of unfairness which I have made:

(1) The agreement between the applicant and the third respondent dated 26 November 1999 is declared wholly void;

(2) The contract between the applicant and the second respondent dated 24 May 1999 is declared wholly void from its inception except to the extent of any monies paid to the applicant;

(3) The first, sixth and seventh respondents shall jointly and severally pay to the applicant the sum of $115,930.01, in connection with the contract dated 24 May 1999 which has been declared wholly void;

(4) The first, sixth and seventh respondents shall pay to the applicant interest from 27 April 2001 until 13 July 2006 on the sum directed to be paid in Order (3) above in accordance with the provisions of s 100 of the Civil Procedure Act 2005;

(5) The first, sixth and seventh respondents shall pay the applicant's reasonable costs of the proceedings, as agreed or assessed.

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