JR's Discount Distribution Pty Ltd and anor v Honan Investments Pty Ltd t/as The Manildra Group of Companies

RESPONDENT/APPLICANT ON MOTION Honan Investments Pty Ltd t/as The Manildra Group of Companies

CATCHWORDS: Unfair contract - Interlocutory proceedings - Notice of Motion seeking dismissal of proceedings - Claim contract of employment exceeded salary cap found in s 108A - Operation of s 108A of the Industrial Relations Act 1996 - Whether contract of employment exists between applicants and respondent - Section 108A directed to contracts of employment - Refusal of relief at threshold will not finally determine that jurisdiction exists - Notice of motion dismissed - Costs

Industrial Relations Act 1996 LEGISLATION CITED: Industrial Relations Amendment (Unfair Contracts) Bill 2002

ASMOF (NSW) v CSAHS [2005] NSWIRComm 339 Aveling v UBS Capital Markets Australia Holdings Ltd (2004) 135 IR 98 Commander Australia Limited v Kerr (2004) 134 IR 160 Great Scott International Pty Ltd v Cosmetic Suppliers Pty Ltd and Anor [2005] NSWIRComm 398 CASES CITED: Metrocall Inc v Electronic Tracking Systems Pty Ltd (No 2) (2000) 102 IR 309 Nagle (t/as WD & LJ Nagle & Sons) v Tilburg (1993) 51 IR 8 Project Blue Sky Inc and others v Australian Broadcasting Authority (1998) 194 CLR 355 Virtue v New South Wales Department of Education and Training (1999) 92 IR 428

FIRST AND SECOND APPLICANT/RESPONDENTS ON MOTION Mr A Metcalfe of counsel Solicitor: Mr J Boghossian Employment Help Lawyers LEGAL REPRESENTATIVES:

RESPONDENT/APPLICANT ON MOTION Mr M P Cleary of counsel Solicitor: Mr S Berry Moray & Agnew

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

JR'S DISCOUNT DISTRIBUTION PTY LTD & ANOR V HONAN INVESTMENTS PTY LTD T/AS THE MANILDRA GROUP OF COMPANIES

Application under s 106 of the Industrial Relations Act 1996

Introduction 1 JR's Discount Distribution Pty Ltd, the first applicant and Jeff Rooney, the second applicant, have filed a summons under s 106 of the Industrial Relations Act 1996 ("the Act"), seeking an order declaring the contract or arrangement between the first applicant and the respondent, whereby the second applicant performed work in an industry ("the contract") was unfair, harsh or unconscionable or contrary to the public interest. The second applicant is a director and the business principal of the first applicant. 2 The respondent, by notice of motion, seeks an order that the proceedings be dismissed. The Summons for Relief 3 The applicants' summons for relief made the following claims: 1. An order declaring that the contract or arrangement between the First Applicant and the Respondent, whereby the Second Applicant performed work in an industry ("the Contract") was unfair, harsh or unconscionable or contrary to the public interest. 2. An order declaring void in whole or in part or varying in whole or in part and either from its commencement or from some other time the said Contract between the First Applicant and the Respondent. 3. Further, or in the alternative, an order varying the Contract from its commencement or some other time to include the following terms: (a) That the Contract shall not be terminated by the Respondent without a period of at least twelve (12) months notice in writing being provided to the First Applicant by the Respondent or alternatively the payment of an equal amount in lieu thereof ($399,691.50). (b) That the Contract shall not be terminated without the payment of severance pay to the First Applicant by the Respondent in the amount equal to twelve (12) months gross remuneration ($399,691.50). (c) That the Respondent pay the First Applicant $110,000.00 - an amount equivalent to the premium or fee ('goodwill') paid by the First Applicant to previous contract carriers for the purchase of trucks with work delivering the Respondent's goods. (d) That the Respondent shall not terminate the Contract for cause without acting in a manner that is at all times fair, just and conscionable, and in this regard the Respondent will afford to the Applicants natural justice and procedural fairness. (e) That the Respondent shall at all times act in a manner that is fair, just and conscionable in respect of any changes proposed to the Contract. 4. An order that the Respondent be liable for the payment of the monies which are payable to the First Applicant as a result of the variation of the Contract pursuant to paragraph 3 above. 5. Further or in the alternative, an order that the Respondent pay to the Applicants such amount of money in connection with the Contract so avoided or varied as may appear to this Honourable Court to be just in the circumstances. 6. An order that the Respondent pay the Applicants interest upon such amount of money as is ordered to be paid to the Applicants in connection with the Contract at such rates and in respect of such period of time as this Honourable Court considers appropriate. 7. An order that the Respondent pay the Applicants' costs of and incidental to these proceedings. 8. Such further or other relief and such further and other orders as appear to this Honourable Court to be fit and just in the circumstances.

4 The applicants' summary of the matters of fact were set out in Part B of the summons as follows: 1. The Respondent was at all material times and is a company capable of being sued in and by its corporate name and style. 2. The Respondent is in the business of flour and related products production and distribution and distributes its products to customers through the services of contract carriers engaged by the Respondent and operating out of the Respondent's Auburn Distribution Centre. 3. The First Applicant was at all material times and is a company capable of suing and being sued in and by its corporate name and style.

The Second Applicant ('Rooney'), is a Director and the business principal of the First Applicant. The other Director and shareholder of the First Applicant is Rooney's partner Ms. Elisha Houghton.

Rooney is a truck driver who at all material times performed work for and on behalf of the Respondent.

In or about February 2003 Rooney noticed an advertisement in the Daily Telegraph Newspaper for the sale of a truck with work. Rooney rang the telephone number listed in the advertisement and spoke to a Mr. Brad Sharp, a contract driver working for the Respondent from the Respondent's Auburn premises. Mr. Sharp advised Rooney that the purchase price for the truck and the work with the Respondent was $150,000.00. The price included a fee or premium in excess of the value of the truck. Particulars of Sale Price

(a) Truck: 1997 Model Mitsubishi FM 657 Cab Chassis with Tautliner Body, 8 tonne carrying capacity; Valued at $80,000.00 (`the Mitsubishi truck');

In the following few weeks Rooney make further enquiries in relation to the prospective purchase of the aforesaid truck with work, including accompanying Mr Sharp on delivery runs.

During the course of accompanying Mr. Sharp (sic) Rooney and being introduced by Mr. Sharp to the Respondent's Warehouse manager, Mr. Tony Vellelonga (`Vellelonga').

During the course of this meeting, Vellelonga pulled Rooney to one side and asked how much he was paying for goodwill. When Rooney told Vellelonga that he was paying $70,000.00 for goodwill Vellelonga told him that the price was "a bit overstated" and that the real figure for goodwill was close to $40,000.00. However, Vellelonga did not place any restriction on the sale price of the truck with goodwill.

Vellelonga approved the sale of the truck with work by Mr. Sharp to the Applicants and the First Applicant purchased the truck with work from Mr. Sharp for the $150.000.00 sale price.

In or about March 2003 the First Applicant commenced providing transport delivery services for the Respondent by use of the aforesaid Mitsubishi truck by Rooney. At about the time of commencing to provide these services Rooney received a document entitled "Conditions of Employment Auburn Flour Delivery Drivers" dated January 2003.

During the course of the Contract the Applicants provided the aforesaid Mitsubishi truck, fully maintained by the Applicants and operated by Rooney to perform the work of delivering the Respondent's goods to its customers (`the work').

The First Applicant was paid on a weight per parcel/piece rate basis for the work on a weekly basis.

In or about August 2003 Rooney was made aware that another of the Respondent's contract drivers, Mr. George Eid intended to sell his Isuzu truck with work (`the Isuzu truck'). As Mr. Eid's truck was of a larger carrying capacity (12 tonnes) Rooney expressed an interest in purchasing the Isuzu truck with work from Mr. Eid.

The Isuzu truck had initially introduced into the Respondent's business as an additional truck during a peak season to cover work that the Respondent's other contract drivers could not perform by Mr. Tom Moran. Mr. Moran did not pay a premium or fee to any other contract driver or the Respondent. Mr. Moran subsequently sold the Isuzu truck with work to Mr. Eid for $210,000.00 and amount that included a premium or fee in excess of the value of the Isuzu truck ("Goodwill").

In or about October 2003 Rooney approached Vellelonga to enquire as to whether Mr. Eid's Isuzu truck would have permanent regular work with the Respondent if Rooney's company purchased it.

Vellelonga verbally approved of the purchase of Mr. Eid's Isuzu truck with work by the Applicants.

Vellelonga verbally assured Rooney that the Isuzu truck would continue to receive regular work and would be treated equally with respect to other contractor's trucks in the distribution of the workload. Vellelonga told Rooney verbally that because the Isuzu truck had been sold by Mr. Moran to Mr. Eid with company approval and goodwill that the goodwill that Rooney paid to Mr. Eid would be recognised by the Respondent also.

Vellelonga asked Rooney verbally whether he intended to run both trucks in the yard. Rooney informed Vellelonga that he intended to sell the smaller Mitsubishi truck with work to another contract driver and run the larger Isuzu truck as it had a better income potential. Vellelonga verbally told Rooney not to introduce any prospective buyer to Vellelonga until Rooney had to take potential buyers out on the road with him to be trained.

On or about 6 December 2003 the First Applicant purchased the aforesaid Isuzu truck from Mr. Eid for $175,000.00. Particulars of Purchase (a) Truck: 2001 Isuzu FVM 1400 Cab Chassis with Tautliner Body, 12 tonne carrying capacity, registration number YAK 255; Valued at $135,000.00. Purchased from GNE Transport Pty Ltd (Mr. Eid's company). Truck purchased entirely by a loan with CBFC Limited obtained with the assistance of Motor & General Financial Services.

Thereafter the First Applicant provided the 2 aforesaid vehicles, fully maintained, to perform the work. Rooney operated the larger vehicle and a driver employed by the Applicants was engaged to operate the smaller Mitsubishi truck.

It was always the Applicant's intention to sell the smaller truck with work and only operate the larger truck. Rooney verbally informed Vellelonga of this intention at or about the time he purchased it from Mr. Eid. During the next few months Rooney advertised the smaller Mitsubishi truck for sale with work. Rooney had a number of queries from prospective buyers in relation to the larger Isuzu truck, but no interest in the smaller truck. Eventually Rooney decided to put the larger Isuzu truck on the market and revert back to operating only the smaller Mitsubishi truck.

On or about 2 April 2004 Rooney received a formal warning letter in relation to the delivery of the Respondent's products to a customer, "Freda Coffee Lounge" at Auburn. The circumstances surrounding this delivery were as follows. The customer was a `cash on delivery' (COD) customer and had ordered two types of product to be delivered. Rooney performed the delivery in question. When he arrived at the customer's premises he discovered that one of the products that had been loaded onto his truck was not the product that the customer had ordered. Rooney rang the Respondent's office and spoke to an Order/Salesperson, first named "Rola" and arranged for the proper product to be delivered by another driver. He advised Rola that he would leave the correct portion of the order with the customer but he would not collect any money - COD, rather that the driver who delivered the replacement product should collect all COD monies in relation to the order from the customer once the balance of the order was delivered.

In or about April 2004 Mr. John Hall (`Hall') contacted Rooney in relation to the sale of the larger Isuzu truck with work. Hall accompanied Rooney on some of his runs and assisted him with the work. Rooney agreed to sell the Isuzu truck with work to Hall subject to Hall obtaining finance for the purchase and the Respondent agreeing to the sale. Particulars of Prospective Sale (a) Hall pay out the Applicants loan with CBFC Limited; and

(b) Hall would pay the Applicants a further sum of $50,000.00 as a goodwill premium. 25. From about the beginning of May, Hall was employed as an employee driver of the Applicants on the Isuzu truck on the basis that he would continue to be an employee until such time as Hall had obtained finance for the purchase of the Isuzu truck with work and the Respondent agreed to the sale. During the course of Hall's employment, because the long hours involved in the work, Rooney permitted Hall to take the Isuzu truck home each evening instead of returning it to the Respondent's depot.

On or about 11 May 2004 Mr. Hall advised Rooney that his loan application should be finalised on or about 21 May 2004. Rooney then arranged for a meeting for Mr. Hall and Rooney with Vellelonga on 21 May 2004.

On Monday, 17 May 2004 Rooney was called to a meeting in Vellelonga's office. He attended this meeting. Also in attendance were Vellelonga, Mr. Bill Allport (the Respondent's National Manager, Transport and Logistics) and Mr. Mark Owens (the Respondent's Transport Manager).

During the course of the meeting on Monday, 17 May 2004 the Respondent's officers alleged that Second Applicant had purported to sell his Isuzu truck with work, without approval from the Respondent and contrary to the Respondent's procedures. Mr. Allport stated that only he or Mr. Owens retain the ability to hire new drivers on behalf of the Respondent. Allport requested that Rooney provide Vellelonga with a copy of the Registration papers for the Isuzu truck by close of business.

Rooney denied that he had finalised the transaction to sell the Isuzu truck with work. He did not agree to provide Vellelonga with the registration papers that day, as he did not have them at work. He told Allport that copies of the Registration papers did not prove ownership of the vehicle and that if Allport wanted to be satisfied as to who owned the vehicle he should perform a REVS check. He pointed out that he had arranged a meeting with Vellelonga for the purpose of obtaining approval to sell the Isuzu truck with work on 21 May 2004 and that Vellelonga was the manager that had approved all previous truck with work sales. He further stated that he was only acting in accordance with Vellelonga's instructions (see paragraph 19 herein).

During the course of the meeting Allport raised the issue that Hall's girlfriend worked for a competitor of the Respondent. Rooney confirmed that he understood that she was employed by `Allied Mills' as a telemarketer.

During the course of the meeting on Monday, 17 May 2004 Vellelonga said to Rooney words to the following effect "if you don't want to operate 2 trucks in the yard you can take the second truck and fuck off". However, at the conclusion of the meeting Vellelonga told Rooney that he could continue to work both trucks in the yard but not "sell them in the yard".

After this meeting, the Respondent's officers met separately with Hall.

Later in the day (Monday, 17 May 2004) Rooney made enquiries as to whether the Isuzu truck would receive any work the next day. Vellelonga verbally informed Rooney that there was no work available for it. Rooney did however perform work in the other truck for the Respondent during the course of the following week.

Rooney did not give Vellelonga a copy of the Isuzu registration papers, either on 17 May 2004 or subsequently.

On Friday, 21 May 2004 Vellelonga called Rooney into Vellelonga's office and handed him a letter. This letter was dated 21 May 2004 and was signed by Mr. Allport. By this letter the Respondent terminated the services of the Applicant without notice, pay in lieu of notice or the payment of compensation ('the Termination'). At or about the time he handed Rooney the letter he said words to the following effect "You seem to be running your own show. You are no longer required. There are two new trucks coming in on Monday to replace you. Get your trucks and leave ".

The 21 May 2004 letter alleged: 34.1 (sic) That by the time of the meeting on 17 May 2004 Rooney had sold the Isuzu vehicle to Hall, contrary to Rooney's statements to the contrary;

34.2 (sic) Rooney had purported to sell his Isuzu truck with work, without approval from the Respondent and contrary to the Respondent's procedures; and

34.3 (sic) Hall was personally linked to a competitor of the Respondent. 37. The 21 May 2004 letter stated that the reason for termination was "this incident" and "past matters of discipline (Letter of warning dated 2nd April 2004)".

38. Following the termination Hall indicated that he was still interested in acquiring the Isuzu truck and Rooney allowed Hall to retain possession of it until Hall arranged for the Applicants CBFC loan to be paid out.

39. Shortly following the termination Rooney was advised by Motor & General Financial Services that the CBFC loan had been paid out. Rooney then gave Hall the Registration papers to arrange for the change in Registration of the Isuzu truck.

40. After the termination Rooney discovered the following: 37.1 (sic) Hall paid out the CBFC loan on or about 19 April 2004, having arranged his own finance by that date following the sale of his house in early April, contrary to his representations to Rooney that he would not obtain finance until about 21 May 2004; and

37.2 (sic) In or about June 2004 Hall attended the NSW RTA to complete the transfer of the Isuzu truck. The RTA's records indicate that the change of ownership occurred on 17 May 2004. 39. Following the termination Rooney was unable to find alternative work for approximately three (3) weeks until he commenced working as a contract driver for P & N Beverages Australia, using the Mitsubishi truck to deliver P & N's products. The gross remuneration the Applicants receive for this work is approximately $2,000.00 per week on average. Contract Unfair, Harsh and Unconscionable, Contract Against the Public Interest Contract Avoids the Provisions of an Industrial Instrument

40. The Contract was or became unfair, harsh and unconscionable, and contrary to the public interest in that: (a) It failed to provide for the giving of a fair, reasonable and appropriate period of notice in the circumstances or for payment in lieu of such notice;

(b) It failed to provide for the giving fair, reasonable and appropriate severance pay in relation to the termination of the contract by the Respondent for any reason other than termination for cause;

(c) The Applicants commenced to operate both trucks in the Respondent's business by arrangement with previous contract drivers whose provision of services to the Respondent was replaced by the Applicants. Under the terms of this arrangement a sum of money was paid by the Applicants to the previous contract drivers as a premium or fee in connection with the entry into the Work, (`Goodwill'). It was a custom and practice in the Respondent's business that such a premium or fee be paid. The Respondent knew or ought reasonably have known that such a premium or fee had been paid to the previous contract drivers. The Respondent failed to take reasonable steps to advise the Applicant's (sic) that it was not a requirement of the Respondent that such a payment be made or requested.

(d) The contract was terminated by the Respondent: (i) Without notice,

(iv) Without compensation in relation to the amounts of money paid by the Applicants to other contract drivers as a fee or premium ('goodwill') for entry into the work,

(v) without proper grounds being established for the termination, and

(vi) Without the Applicants being afforded procedural fairness; (e) The contracts invested the Respondent with significant discretionary powers which may and have been used to the Applicants' substantial disadvantage, including extinguishing the rights the Applicants' enjoyed to introduce a new contract driver into the work to replace an (sic) Applicants upon the payment of a sum of money by the new contract driver to the Applicants as a premium or fee ("Goodwill') in connection with the entry into the work;

(f) The contract was terminated by the Respondent without regard to the period that Rooney had provided services to the Respondent;

(g) The termination of the Contract for cause is disproportionate to any alleged conduct of Rooney;

(h) The Applicants were at all relevant times in a position of unequal and inferior bargaining power in respect of their dealings with the Respondent and was specifically so at the time of the formation of the Contract and also at the time of the termination of the Contract;

(i) It was otherwise unfair, harsh and unconscionable and contrary to the public interest, upon such grounds and for such reasons as this Honourable Court may find. 41. Further, or in the alternative, the conduct of the Respondents caused the contract or arrangement to become unfair in the terms of s.106 of the Act. 5 The particulars of the manner in which any amount claimed is calculated was set out in Part D of the summons as follows: (a) Order 3(a) - Pay in lieu of Notice. Calculated by multiplying the gross remuneration received by the First Applicant from the Respondent for the four weeks preceding the week of the termination by thirteen, as follows: Week ending 25 April 2004

(b) Order 3(b) - Severance pay. Calculated by multiplying the gross remuneration received by the First Applicant from the Respondent for the four weeks preceding the week of the termination by thirteen ($399,691.50).

(c) Order 3(c) - Goodwill. Amount paid to Mr. Sharp ($70,000.00) plus the goodwill amount paid to Mr. Eid's company ($40,000.00) = $110.000.00.

(e) Interest at the rates prescribed pursuant to the Supreme Court Act 1970. 6 The respondent relied on an affidavit of Simon Berry, solicitor for the respondent. Mr Berry was not required for cross-examination. The respondent submitted that the applicants sought an order at par 3 of the summons, inter alia, of 12 months payment in lieu of notice which amounted to $399,691.50 and that for the period from 29 October 2003 to 21 May 2004 (just prior to the termination of the agreement) it paid the applicants $246,023.59. It follows, so it was submitted by the respondent, that the applicants are not entitled to seek an order pursuant to s 106 of the Act by virtue of s 108A of the Act. 7 Section 108A is in the following terms:

108A Employment contracts in respect of which applications cannot be made.

(1) An application cannot be made for an order under this Division if the application relates to a contract of employment under which: (a) a remuneration package that exceeds the remuneration cap is paid or received (or is payable or receivable) during the period of 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination), or (b) a remuneration package is paid or received (or is payable or receivable) during a period of less than 12 months immediately before the application is made (or, if the application concerned relates to a contract that has been terminated, immediately before the termination) that would, if the remuneration package had been paid or received (or been payable or receivable) for a period of 12 months, have exceeded the remuneration cap. (2) An application cannot be made for an order under this Division by a person who is a partner carrying on a business if: (a) the application relates to a contract between that partner and the other persons carrying on that business in partnership, and (b) the share of the net profits, or payments contingent on the net profits, of the business that are paid to or received by (or payable to or receivable by) the applicant during the period of 12 months immediately before the application is made (or, if the application relates to a contract that has been terminated, immediately before the termination) exceed:

(i) $200,000, or (ii) if an amount is prescribed for the purposes of paragraph (b) of the definition of "remuneration cap" in subsection (3) - that amount. (3) In this section: "contract of employment" means any contract or arrangement under which work is done by a person in the capacity of an employee, and includes a related condition or collateral arrangement with respect to such a contract. "employment benefit" means a benefit provided to an employee at the cost of his or her employer (being a benefit of a private nature) and, without limitation, includes: (a) contributions payable to a superannuation scheme by an employer in respect of the employee, including any liability of that employer to make any such contributions or to pay costs associated with that scheme, or (b) the provision by an employer of a motor vehicle for private use by the employee, or (c) any other benefit prescribed by the regulations for the purposes of this definition. "monetary remuneration" includes any performance-related bonus or incentive payment. "remuneration cap" means: (a) $200,000, except as provided by paragraph (b), or (b) any greater amount prescribed by the regulations (being a regulation that increases the amount by reference to increases in the amount referred to in section 83 (1) (b)). "remuneration package" means the total value of monetary remuneration and employment benefits payable or receivable under a contract of employment.

Submissions 8 Mr M P Cleary, counsel for the respondent submitted that s 108A(3) provides a remuneration cap of $200,000. It was acknowledged that the claim was that a contract or arrangement existed between the first applicant and the respondent, or, in the alternative, the second applicant was employed by the first applicant. Counsel observed that under the summary of matters of fact and law at par 5 of the applicant's summons for relief, it was contended that the second applicant was a truck driver who at all material times performed work for and on behalf of the respondent and that at par 11, it is stated that the "first applicant commenced providing transport delivery services for the respondent by use of the aforesaid Mitsubishi truck by Rooney." 9 At about the time of commencing to provide these services, the second applicant received a document entitled "Conditions of Employment Auburn Flour Delivery Drivers" dated January 2003. Under Pt C of the summons, it was contended that the Transport Industry - General Carriers Contract Determination applied to the contract. Counsel for the respondent contended that the second applicant was making a claim as an employee of the respondent and that in those circumstances the Act was clear. 10 My attention was also drawn to a decision of the High Court in Project Blue Sky Inc and others v Australian Broadcasting Authority (1998) 194 CLR 355 which considered the meaning of the words "relating to". The Court observed at 387 that these words were "extremely wide". 11 Mr A Metcalfe of counsel who appeared for the applicants submitted that s 108A relates to contracts of employment, contending that the contract which is the subject of the summons is not a contract of employment, but rather a contract that was between two corporations. For s 108A to have any operation, it must relate "to a contract of employment". 12 Mr Metcalfe referred to the Second Reading of the Industrial Relations Amendment (Unfair Contracts) Bill 2002 submitting that there was no intention either on the face of the Statute or the purpose behind the amendment to affect anything in the Transport Industry that relates to contractors. Counsel acknowledged that there were some novel features to the application including a claim by the first applicant for severance pay. 13 Counsel for the applicants contended that the notice of motion was incompetent and should be dismissed. Consideration 14 The question requiring answer therefore is: to what is s 108A directed? This section refers only to contracts of employment. As was recently observed by the majority (Wright J President and O'Neill C; Staunton J dissenting) in ASMOF (NSW) v CSAHS [2005] NSWIRComm 339 at [61]: … the operation of statutory provisions is a question which, as with any issue of construction, may often be resolved by ascertaining the intention of the legislature from the express words of the instrument viewed in their context. … 15 See also Commander Australia Limited v Kerr (2004) 134 IR 160 and Aveling v UBS Capital Markets Australia Holdings Ltd (2004) 135 IR 98. 16 If there was any doubt that s 108A is directed to contracts of employment, it is removed by the use of those specific words by the legislature in s 108A, as compared with the language used in s 106 which is not limited to contracts of employment. Similarly, s 105, is in very wide terms and defines a contract as meaning "any contract or arrangement". 17 The contract, which is the subject of this summons is not a contract of employment. It is defined as "the contract or arrangement between the first applicant and the respondent, whereby the second applicant performed work in an industry ("the contract")". It is pleaded that the second applicant "is a director and business principal of the first applicant. The other director and shareholder of the first applicant is Rooney's partner…". 18 As I read the summons, it is not pleaded that the second applicant is an employee of anyone, but rather a truck driver who at all material times performed work for and on behalf of the respondent. The definition of the contract, as found in the summons, clearly defines the parties as being two corporations. The evidence of Mr Berry is that the first applicant forwarded invoices to the respondent which were paid by the respondent without any withholding tax being deducted. In these circumstances, whatever the contract or arrangement between the corporations, it is not that of a contract of employment. 19 Turning to s 108A itself, an application is required to "relate to" a contract of employment which is defined to mean "any contract or arrangement under which work is done by a person in the capacity of an employee". At the stage that the proceedings have reached, there is no evidence before me and I cannot find anything in the pleadings that suggest, conclusively, that the second applicant did perform any work for the respondent in the capacity of an employee either for his own company, the first applicant, if that be relevant, or, more importantly, as an employee of the respondent. The pleadings disclosed that the second applicant performed driving duties himself and at some later stage, also arranged for another person to drive a second truck which was obtained by the first applicant and used contractually with the respondent. The first applicant, on the material before me, has provided specialist transport equipment of significant value to the respondent. Such a contract or an arrangement cannot be said to be an employment contract. In my view, as a matter of both fact and law, the application does not relate to a contract of employment. 20 In the event that I am wrong about the absence of a contract of employment, if the second applicant was an employee of anybody, he could only have been an employee of the first applicant. However, there is no evidence to that effect. Furthermore, the definition of contract of employment in s 108A(3) refers to any contract or arrangement under which work is done in the capacity of an employee. Such a contract, of course, on this analysis, would not involve the respondent. Furthermore, if the second applicant received any remuneration, such remuneration must have been received from the first applicant because the respondent paid the first applicant. In this regard, there is no evidence before the Commission at this stage of the proceedings which indicates what, if any, remuneration the second applicant received from the first applicant and, if he did, whether or not such remuneration exceeded the salary cap as defined in s 108A(2)(b)(i). 21 As was shown in Great Scott International Pty Ltd v Cosmetic Suppliers Pty Ltd and Anor [2005] NSWIRComm 398 and Metrocall Inc v Electronic Tracking Systems Pty Ltd (No 2) (2000) 102 IR 309, cases which considered the joinder of a party, the question as to whether or not the necessary facts could be established to make out a claim was a matter that was left to be determined on the evidence at the hearing. 22 A further matter that tells against the dismissal of the proceedings at this stage is that there is an industrial instrument that applies to the terms of engagement between the first applicant and the respondent, that being, the Transport Industry-General Carriers Contract Determination. It was submitted by Mr Metcalfe that there are various provisions contained in the Determination that regulate the engagement of persons who fall within the scope of that Determination. By virtue of s 309 of the Act, that Determination applies to unincorporated lorry owner drivers, incorporated lorry owner drivers and lorry owner drivers who act in partnership with other persons. Another matter that may arise in the substantive hearing is that the second applicant is both a shareholder and director of the first applicant. The holder of such an office is, of course, entitled to be paid director's fees and receive remuneration by payment of dividends. It does not automatically follow that the holder of such an office would also receive remuneration in the form of a salary. 23 Although I have made a specific finding, as both Nagle (t/as WD & LJ Nagle & Sons) v Tilburg (1993) 51 IR 8 and Virtue v New South Wales Department of Education and Training (1999) 92 IR 428 make clear the refusal of relief at the threshold will not finally determine that jurisdiction exists for any order which the Court might make between the parties and a party is not precluded from again raising the issue at the hearing. 24 On the state of the notice of motion, a case has not been made out for the dismissal of the application. ORDER The Court makes the following orders:

1. The notice of motion is dismissed.
2. Costs are reserved.
3. In accordance with s 109 of the Act, this matter is listed for conciliation at 11.30 am on Wednesday 15 February 2006.

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