mixed. Judgment for the defendant Riskflo Associates Pty Ltd against the first plaintiff Matthew Maddocks; costs for defendant against first plaintiff. Judgment for the second plaintiff ORC Professional...
Key principles
The Employment Contract was a contract between Riskflo Associates Pty Ltd and ORC Professional Services Pte Ltd (ORC), not between Riskflo and Mr Maddocks personally, based on...
The 'deferred component' of salary in cl 7 was a conditional/contingent entitlement payable on receipt of capital investment funds; therefore at the termination date (May 2018)...
The word 'outstanding' in cl 49 must be construed to mean unpaid amounts which are legally owing at the termination date; it does not mean every unpaid entitlement irrespective...
Because ORC (not Mr Maddocks) was the contracting party, ORC was entitled to judgment for unpaid non-deferred salary, unreimbursed expenses, accrued annual leave and...
Issues before the court
Which entity (Mr Maddocks personally or ORC) was the 'Employee' and contracting party under the written Employment Contract?
Was the 'deferred component' of salary payable on termination (ie, was it an 'outstanding portion of the compensation' payable under cl 49 on the...
Plain English Summary
Mr Maddocks negotiated a role with Riskflo but arranged for a Singapore company he controlled (ORC) to be the named 'Employee' so he and his family could keep their Singapore employment pass. The written Employment Contract named ORC as the 'Employee represented by Matthew Maddocks'. ORC invoiced Riskflo into its own bank account. After Riskflo terminated the engagement, ORC claimed unpaid salary, expenses, accrued leave and a deferred salary component that was conditional on Riskflo raising capital. The court found ORC (not Mr Maddocks) was the contractual employee and awarded ORC the unpaid salary, expenses, accrued leave and consequential loss plus interest (total $81,418.25 SGD). The court rejected the deferred salary claim because the condition for payment (receipt of capital investment funds) had not occurred by the termination date, and 'outstanding' in the termination clause meant amounts legally owing at that time.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
1,793 words · generated 16/09/2026
Who is entitled to damages for unpaid salary, expenses, accrued leave and consequential loss?
Cited legislation
No linked legislation citations have been extracted yet.
What happened
Facts and procedural posture
Matthew Maddocks, an experienced risk manager living and working in Singapore, and others incorporated ORC Professional Services Pte Ltd (ORC) in Singapore in August 2017 so Maddocks and his wife could hold employment passes as employees of a Singapore entity (Introduction, paras 1-2).
Riskflo Associates Pty Ltd (Riskflo), an Australian start-up, recruited Maddocks. Drafts of an employment contract were exchanged; a final written Employment Contract was executed 12 December 2017 but expressed to commence retrospectively on 11 September 2017 (Introduction, paras 4-6). The first page of the executed contract named Riskflo as the 'Employer' and ORC 'represented by Matthew Maddocks' as the 'Employee' (Introduction, para 5; Construction of the Employment Contract, paras 3-4).
Prior to and after execution, invoices for services were issued on ORC letterhead, directed to Riskflo, and required payment into an ORC bank account in Singapore (Introduction, paras 9-11). Riskflo gave a termination notice in April 2018 with termination effective in May 2018 (Pleadings, para 3).
Plaintiffs sued: Maddocks in his personal capacity (first plaintiff) and ORC (second plaintiff) claimed unpaid salary, deferred salary, unreimbursed expenses, accrued annual leave and consequential loss. The primary contested legal question at trial was which entity was the contracting 'Employee' under the written Employment Contract (Pleadings, paras 1-2).
Outcome at trial
The District Court (Russell SC DCJ) found the Employment Contract to be between Riskflo and ORC (not Riskflo and Maddocks personally) and entered judgment for ORC against Riskflo for $81,418.25 SGD (unpaid non-deferred salary, unreimbursed expenses, accrued annual leave and consequential loss plus interest) (Damages not in dispute; Interest). The Court entered judgment in favour of Riskflo against Maddocks personally and ordered costs accordingly (Orders).
Why the court decided this way
Applicable legal principles
The court applied orthodox principles of contractual construction: the objective test (what a reasonable person would understand the language to mean) and the need to read the text in light of surrounding circumstances and the commercial purpose of the transaction (citing Australian Broadcasting Commission v Australasian Performing Rights Association Ltd [1973] CLR 99 at 109; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179; and Euphoric Pty Ltd v Ryledar Pty Ltd [2006] NSWSC 2 paras 31-33) (Construction of a Contract, Legal Principles, paras 1-3).
The court emphasised that the judge begins with the words of the contract, considers the surrounding factual matrix known to the parties, and identifies which of the possible meanings best reflects the parties' contractual intention (Euphoric extracts relied on at para 3).
Text and commercial context led to ORC
The text of the contract plainly named ORC as the contracting 'Employee' and described Mr Maddocks as its representative; the execution block had ORC's name with 'Per (SEAL) Matthew Maddocks', whereas Riskflo's signatory signed directly above his printed name (Construction of the Employment Contract, paras 3-5). The ordinary meaning of 'per' and the placement in the execution block supported the interpretation that Mr Maddocks was signing on behalf of ORC (Construction of the Employment Contract, paras 4-5).
The parties' conduct reinforced the textual reading: ORC invoiced Riskflo into ORC's bank account both before and after the December contract, Maddocks had asked that ORC be the nominator of employment to preserve immigration status in Singapore, and Maddocks himself admitted he was signing on behalf of ORC (Construction of the Employment Contract, paras 1-9). The court found these surrounding circumstances would lead a reasonable person to understand ORC as the contracting party (Construction of the Employment Contract, para 1).
Deferred salary: condition precedent and meaning of 'outstanding'
Cl 7 expressly made half the monthly salary a 'deferred component' payable 'until receipt of capital investment funds upon which the deferred component will be paid' (Damages in dispute, para 1).
The termination clause (cl 49) required payment on termination of any 'outstanding portion of the compensation', but the court interpreted 'outstanding' to mean an amount that is legally owing (i.e., payable) at the termination date, not every unpaid contingent right (Damages in dispute, paras 4-5).
Because there was no evidence that capital investment funds had been received before termination, the event triggering payment had not occurred and therefore the deferred component was not legally owing on termination. The claim for the deferred component failed (Damages in dispute, paras 3-5).
Other points
The court rejected plaintiffs' reliance on authorities concerning employment status for statutory entitlements (ACE Insurance; Jamsek) as inapposite. Those cases addressed whether workers were employees at common law/statutory law for entitlement purposes; they did not resolve the textual construction question here (Construction of the Employment Contract, paras 3-4).
Before and after state of the law
Before
The legal landscape as cited by the court was the settled Australian approach to contract construction: an objective test that considers wording and the factual matrix (ABC v APRA; Toll; Euphoric). Those authorities already governed how courts approach ambiguous drafting and commercial context.
After
This decision applies those settled principles to a fact pattern where the identity of a contracting 'Employee' was disputed because a corporate nominee was used for immigration reasons. The key doctrinal point reaffirmed is that textual indications (naming, execution block, 'represented by') and consistent commercial conduct (invoicing to the corporate account) can establish that a company, not the natural person performing the work, is the contracting party. It also reiterates the analysis of condition precedent language: contingent/deferred amounts are payable only when their conditions are satisfied and are not 'outstanding' in the sense of being legally due merely because unpaid.
Practical takeaways (doctrinally)
Careful attention to the execution block and 'on behalf of' language is decisive in identifying contracting parties.
Conditional payment mechanisms linked to corporate fundraising will not be converted by a termination clause into immediate liabilities unless the contract expressly provides so.
Key passages with plain-English translation
Quoted passage and translation with paragraph pointers
"The language on the first page of the contract ... makes it plain that the contract was between two parties. Riskflo was the party of the first part and the party of the second part was ORC Professional Services Pte Ltd represented by Matthew Maddocks." (Construction of the Employment Contract, para 3)
Plain English: The front page of the agreement clearly names ORC as the employee and Mr Maddocks only as ORC's representative; that wording strongly suggests ORC, not Maddocks personally, is the party contracted to Riskflo.
"The nomination of Mr Maddocks on the first page ... would mean that ORC was the contracting party, and Mr Maddocks was not a party to the contract, but merely a representative." (Construction of the Employment Contract, para 4)
Plain English: The judge treats 'represented by' in ordinary meaning: representative signs for the corporate entity; the company is the legal party.
"It is an incorrect construction of cl 49 to read the word 'outstanding' as meaning simply 'unpaid' ... there was no legal obligation to pay the 'deferred component' as the event which would trigger the obligation to pay had not arrived." (Damages in dispute, para 4)
Plain English: 'Outstanding' in the termination clause means 'legally due right now', not 'something unpaid but contingent in the future'. Because the deferred half-salary depended on capital being raised and that had not happened, it was not due and payable on termination.
"Given the commercial purpose of the contract, and the understanding of both parties about the finances of Riskflo, I find that the word 'outstanding' ... must be understood as a reference to any unpaid amount, which the employer is then legally obliged to pay." (Damages in dispute, para 5)
Plain English: The commercial reality, a struggling start-up with staged funding, supports a construction that avoids creating an immediate unaffordable liability on termination for contingent amounts.
What fact patterns trigger this precedent
This judgment will be relevant where:
A written employment or services contract names a corporate entity as the 'Employee' or 'Contractor' with an individual signing 'per', 'for' or 'represented by' the company, and there is a dispute whether the individual or the company is the contracting party.
The natural person performs the work and is the obvious performer of duties, creating tension between outward performer and contracting party.
The contract contains deferred/conditional remuneration that depends on a future event (capital raising, sale, listing) and the employer terminates before that event: the court will examine whether the condition precedent has occurred and whether 'outstanding' amounts mean legally owing sums.
Parties use downloaded form contracts or non-lawyer drafted documents with drafting infelicities; courts will rely on text and conduct rather than presumed intentions absent documentary support.
How later courts have treated it
This judgment itself cites authoritative High Court and Supreme Court authorities for interpretative principles (ABC v APRA; Toll; Euphoric) and distinguished recent Federal Court decisions on employment status (ACE; Jamsek). The judgment does not contain material about subsequent appellate treatment or later citations. Without additional sources this deep dive cannot summarise later treatment. Users seeking subsequent judicial treatment should search citators or legal databases for post-2020 citations to Maddocks v Riskflo Associates Pty Ltd [2020] NSWDC 543.
Still-open questions
Corporate nominee as 'Employee' and employment protections: Where a company nominally contracts as 'Employee' and the natural person performs the role, issues could arise about statutory entitlements, tax, and immigration consequences. This judgment resolves contractual identity issues but does not explore ancillary regulatory or statutory employment-status consequences.
The scope of 'outstanding' or similar termination language in differently drafted contracts: If a termination clause expressly accelerates contingent liabilities, or if cl 49 had used different wording, a different result could follow. The decision turns on particular phrasing and commercial background.
Evidence of capital receipt after termination: The court noted cl 57(h) preserved the right to payment of the deferred component after termination if capital were later received. The decision leaves open the practical enforcement path if capital is raised post-termination; ORC's right would survive and could be enforced if and when the condition occurs.
Third-party or agency/equity implications: The judgment does not explore whether Mr Maddocks might have beneficial or equitable claims against Riskflo arising from representations or estoppel in other fact patterns.
Final note and disclaimer
This deep dive summarises and analyses the reasoning of Russell SC DCJ in Maddocks v Riskflo Associates Pty Ltd [2020] NSWDC 543 using the text of the judgment. It is legal information only. I am not your lawyer. I can make mistakes. Before you rely on this analysis, or act on it, or use any drafted document based on it, get a qualified Australian lawyer to check it.
The first plaintiff Mr Matthew Maddocks is a Risk Manager with many years of experience in the finance industry. In 2017 he was working for an Australian bank in Singapore. He was made redundant. Mr Maddocks and his wife wished to remain living and working in Singapore. Under the laws of that country a foreign citizen can only continue to reside in Singapore if they hold an employment pass. In August 2017 Mr Maddocks, together with two other people who resided in Singapore (one of whom was a citizen) caused the second plaintiff ORC Professional Services Pte Ltd (ORC) to be incorporated in Singapore. The plan was that ORC would employ Mr Maddocks and his wife to provide professional services in the finance industry. Because they would then have employment with a Singaporean corporation, Mr Maddocks and his wife could obtain an employment pass and remain living in that country.
In August 2017 Mr Maddocks received a telephone call from Mr Martin Kelly, the principal of the defendant Riskflo Associates Pty Ltd (Riskflo). Mr Kelly said that he had seen Mr Maddocks' profile on Linked In and that he was looking for someone with his experience. There were further telephone discussions between the two men and then there was a meeting in Singapore. There were discussions about Mr Maddocks providing his risk management services for Riskflo, which was a start-up company providing risk management software for the financial services industry. Mr Maddocks, at the invitation of Mr Kelly, came to Sydney in late August 2017. There were discussions about entering into a formal written employment agreement.
Mr Maddocks commenced work in Singapore making contact with those he knew in the finance industry, with a view to introducing them to the Riskflo software. In October 2017 Mr Maddocks downloaded a form of employment contract from a website. He entered details in that form and sent it to Mr Kelly for discussion. Those discussions continued and there were versions of the proposed agreement which went back and forth.
A version of the contract, then still under discussion, was sent by Mr Maddocks to Mr Kelly by an email dated 24 November 2017. The document was headed "EMPLOYMENT CONTRACT". The contract was stated to be between Riskflo, described as the "Employer" of the first part, and Mr Maddocks, described as the "Employee" of the second part (PX 2, p 146).
In an affidavit sworn on 26 March 2020 (PX 1) Mr Maddocks said that sometime between 30 November 2017 and 5 December 2017 he had a discussion with Mr Kelly. Mr Maddocks said that he wanted to continue to live in Singapore so he needed to be employed by a Singapore registered company. He asked whether Riskflo had a related Singaporean company which could employ him. Mr Kelly said that Riskflo did not have such a company. Mr Maddocks said:
"I already have a Singapore company which can be the entity that employs me, so if you don't want to establish a Riskflo subsidiary in Singapore, I can use my Singapore company."
(Underlining added)
Mr Kelly agreed with that suggestion and Mr Maddocks said that he would amend the draft contract accordingly.
The final form of the agreement (PX 2, pp 244-258) was executed on 12 December 2017. It was again headed "EMPLOYMENT CONTRACT". It was stated to be a contract between:
"Riskflo Associates Pty Ltd, Level 5, 44 Miller Street, North Sydney, NSW, 2060
(The 'Employer')
OF THE FIRST PART
AND
ORC Professional Services Pte Ltd
of 297 Ocean Drive, 10-20 The Oceanfront, Singapore 098535
represented by
Matthew Maddocks (the 'Employee')
OF THE SECOND PART."
By cl 1 of that agreement, the Employee "will commence permanent full-time employment with the Employer on the 11th day of September, 2017".
In fact, Mr Maddocks had been doing work for Riskflo during September, October, November and December 2017. While the contract was not executed until 12 December 2017, it was clearly made retrospective to 11 September 2017. Clause 60 of the agreement provided that if there was a pre-existing employment agreement in effect between the parties to the agreement, then the 12 December 2017 agreement superseded all pre-existing agreements, which were no longer enforceable.
Mr Maddocks sent invoices seeking payment for his services, and seeking reimbursement for expenses incurred, prior to the December agreement. The first invoice in evidence (PX 2, p 72) is on the letterhead of ORC. It is dated 6 October 2017 and is directed to Riskflo. It seeks payment for risk consulting services provided in the period 1 October to 13 October 2017. It also seeks reimbursement for flights, hotel expenses, taxis and parking. The invoice requires Riskflo to make payment of the invoiced amount to the ORC bank account at a Singaporean bank in Singapore. The invoice is signed by Mr Maddocks, who is described as "Principal Consultant".
Both before and after the December agreement, invoices were sent in exactly the same format. The last invoice is dated 18 April 2018 (PX 3, p 613) and again requires payment of monies into the ORC bank account in Singapore. It is clearly an invoice from ORC to Riskflo.
The above matters are uncontroversial. They appear from the evidence of Mr Maddocks, including his documentary evidence. The matters recited above were not in dispute or challenged in any way.
[3]
The Pleadings
By a Statement of Claim filed on 24 June 2019 Mr Maddocks sued as first plaintiff and ORC sued as second plaintiff. The Statement of Claim alleged that on about 12 December 2017 Riskflo, as the employer, entered into a written agreement entitled "Employment Contract" with Mr Maddocks as the employee, or in the alternative with ORC.
Counsel for the plaintiffs submitted that Mr Maddocks was the employee under this contract and that he was the contracting party. Counsel for the defendant submitted that ORC was the contracting party. This is the primary issue to be determined in the case.
The Statement of Claim alleges that on 16 April 2018 Riskflo gave notice of termination of employment in accordance with cl 44 of the Employment Contract. By such notice, the employment terminated on 16 May 2018. While Riskflo denied these matters in its Defence filed on 23 July 2019, they were not put in dispute at the hearing.
The Statement of Claim alleges that pursuant to the employment contract, either Mr Maddocks or ORC was entitled to four different types of payment for the work done by Mr Maddocks. All of the monetary amounts in the contract were expressed in Singapore dollars, and when I refer to monetary amounts below in this judgment I am referring to Singapore dollars not Australian dollars.
The Statement of Claim alleged that either Mr Maddocks, or in the alternative ORC, were entitled to the following monies under the Employment Contract:
1. One half of a calendar monthly salary amount of $30,000 (Non-Deferred Salary Payment);
2. One half of the calendar monthly salary payment upon receipt by Riskflo of capital investment funds (Deferred Salary Payment).
3. Reimbursement for all reasonable expenses within a reasonable time after submission of acceptable supporting documentation.
4. Six weeks of paid vacation during each year of the term of the Employment Contract.
The Statement of Claim pleaded that in those four categories Riskflo owed the following amounts:
1. $55,741.94 on account of unpaid Non-Deferred Salary Payments.
2. $112,741.94 on account of unpaid Deferred Salary Payments.
3. $3,195.45 on account of unreimbursed expenses.
4. $9,218.12 on account of accrued annual leave not taken by the employee before termination.
In the Defence filed by the defendant on 23 July 2019, liability to pay each and every one of these amounts was denied. However, when the trial commenced a defendant's Statement of Issues (MFI 3) was handed up. It said that Riskflo had "never disputed" that Riskflo had an obligation to pay to ORC the Non-Deferred Salary Payment of $55,741.94 and the unreimbursed expenses of $3,195.45 claimed, plus interest on those amounts.
[4]
Construction of a Contract - Legal Principles
In ascertaining the meaning of the terms of a contract the court is primarily concerned with determining the intention of the parties - Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109.
In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 the High Court said:
"It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction."
Justice Palmer explained the process by which a court objectively determines the meaning of the words used in Euphoric Pty Ltd v Ryledar Pty Ltd [2006] NSWSC 2 at [31]-[33] as follows:
"31 However, that does not mean that when the Court begins the task of construction it puts the words of the document aside and endeavours first to ascertain the commonly known factual context and purpose of the transaction, often only by resolving a strenuous contest between the parties. The Court does not, once it has found the commonly known factual context and purpose, then look at the words of the contract and, if they do not readily accommodate the context and purpose so found, force them to do so by a process of interpretation.
32 When the Court is construing a commercial contract, it begins with the words of the document: there it often finds expressed the factual context known to both parties and the common purpose and object of the transaction. But the Court is alive to the possibility that what seems clear by reference only to the words on the printed page may not be so clear when one takes into account as well what was known to both parties but does not appear in the document. When that is taken into account, the words in the contract may legitimately have one or more of a number of possible meanings. It is then the Court's task to identify which of the possible meanings represents the parties' contractual intention.
33 However, when a party to a contract argues that the known context and common purpose of the transaction gives the words of the contract a meaning which, by no stretch of language or syntax they will bear then, in truth, one has a rectification suit, not a construction suit."
[5]
Construction of the Employment Contract
Mr Kelly, in cross-examination, was keen at every turn to assert that Riskflo was contracting with ORC. He was very much an advocate in his own case.
Mr Maddocks was cross-examined concerning the execution of the Employment Agreement. He agreed that the proposition that he was signing the contract on behalf of ORC. He also agreed with the proposition that ORC was represented by him, as an employee of ORC. He agreed with the suggestion that he understood that ORC was a party to the contract.
The language on the first page of the contract (PX 2, p 244) makes it plain that the contract was between two parties. Riskflo was the party of the first part and the party of the second part was ORC Professional Services Pte Ltd represented by Matthew Maddocks. It was acknowledged in submissions by counsel for the plaintiffs that this employment contract was only between Riskflo and ORC, or between Riskflo and Mr Maddocks. There was no construction by which it could be found to be a contract between Riskflo and both ORC and Mr Maddocks.
The nomination of Mr Maddocks on the first page of the Employment Contract speaks of him being a representative of ORC. As a matter of plain English, that would mean that ORC was the contracting party, and Mr Maddocks was not a party to the contract, but merely a representative of ORC who could speak for ORC.
The execution page of the contract (PX 2, p 257) is set out in a form which suggests that ORC was the contracting party and that ORC was the employee. ORC was required to execute the contract in the following terms:
"EMPLOYEE:
ORC Professional Services Pte Ltd
Per
(SEAL)
Matthew Maddocks"
The Employment Contract was signed electronically through a piece of software which resulted in a signature certificate (PX 2, p 258). Mr Maddocks' signature was affixed on the line which read "Per (Seal)". He did not sign immediately above his printed name.
By contrast, Riskflo executed the contract by Mr Kelly affixing his signature immediately above his name. This left the line which referred to a seal completely blank.
While in days gone by natural persons could affix their own seal to a contract, the present day notion of a seal usually applies only to a company.
The placement of the name of ORC immediately below the designation as "EMPLOYEE", is a clear indication that ORC was the employee. The Latin meaning of the word "Per" is "through, by means of". The use of the word "Per", meaning "by" is an indication that whoever was signing the contract was executing not on their own behalf, but on behalf of the company for which they spoke. There is no suggestion that Mr Kelly became a party to the contract, even though he signed it. It is quite clear from the execution page of the contract that Mr Kelly was signing to bind Riskflo to the contract and Mr Maddocks was signing to bind ORC to the contract.
[6]
Damages not in dispute
Counsel for the defendant accepted in final submissions that ORC was entitled to a judgment covering the following four heads of damage:
(1) Non-Deferred Salary Payment $55,741.94
(2) Unreimbursed expenses $ 3,195.45
(3) Accrued annual leave $9,218.12
(4) Consequential loss (credit card interest) $5,877.38
TOTAL $74,032.89
[7]
Damages in dispute
The component of damages in dispute between the parties is the Deferred Salary pleaded in par 8(b) of the Statement of Claim in the amount of $112,741.94. The entitlement to such an amount is said by the plaintiffs to arise under cl 7 of the Employment Contract which provides:
"Compensation paid to the Employee for the services rendered by the Employee as required by this Agreement (the 'Compensation') will include a salary
● of $360,000 (Singapore dollars) per year, circa $300K AUD subject to currency fluctuations, payable twice per month @ $15,000 SGD for the period from the commencement of this Agreement until 30 June 2018. From the period 1 October 2017 a deferred component of $15,000 SGD will accumulate until receipt of capital investment funds upon which the deferred component will be paid."
As previously recited, Riskflo gave notice of termination in April which resulted in the termination of the agreement in May 2018. The plaintiffs rely upon cl 49 of the Employment Contract which provides:
"The Termination date specified by either the Employee or the Employer may expire on any day of the month and upon the Termination Date the Employer will forthwith pay to the Employee any outstanding portion of the compensation including any accrued vacation and banked time (if any) calculated to the Termination Date."
The submission for the plaintiffs is that when the termination date in May 2018 arrived, an outstanding portion of the compensation was the unpaid amount calculated at $15,000 per month. This was described in cl 7 of the Employment Contract as "a deferred component" and in the Statement of Claim as "Deferred Salary Payments".
The submission of counsel for the plaintiffs was that at the termination date this "deferred component" was outstanding as it had not been paid. The submission for the defendant was that it was not outstanding at the termination date, as the event upon which the money would be payable had not yet occurred.
It is plain beyond argument that while the contract was on foot, there was no obligation to pay the "deferred component" until Riskflo received "capital investment funds". There was no evidence that such funds were received before the termination date, and indeed no evidence that funds had been received even up to the date of the trial. Thus on the evidence the event which would lead to an obligation to pay the "deferred component" had still not occurred.
[8]
Interest
The last payment by credit card occurred on 6 October 2018.
Interest calculated at court rates is set out in the following table:
Start Date End Date Days Rate Amount Per Day Total
06/Oct/2018 31/Dec/2018 87 5.5% $11.1555 $970.53
01/Jan/2019 30/Jun/2019 181 5.5% $11.1555 $2019.14
01/Jul/2019 31/Dec/2019 184 5.25% $10.6484 $1959.31
01/Jan/2020 30/Jun/2020 182 4.75% $9.6080 $1748.65
01/Jul/2020 18/Sep/2020 80 4.25% $8.5966 $687.73
Total 714 $7385.36
[9]
ORC is entitled to a judgment for $74,032.89 + $7,385.36 = $81,418.25 SGD.
[10]
Orders
The orders of the court are:
1. Judgment for the defendant Riskflo Associates Pty Ltd against the first plaintiff Matthew Maddocks.
2. Order the first plaintiff Matthew Maddocks to pay the costs of the defendant Riskflo Associates Pty Ltd.
3. Judgment for the second plaintiff ORC Professional Services Pte Ltd against the defendant Riskflo Associates Pty Ltd for $81,418.25 SGD.
4. Order the defendant Riskflo Associates Pty Ltd to pay the costs of the second plaintiff ORC Professional Services Pte Ltd.
[11]
Amendments
24 September 2020 - Typographical error par 40 (7)
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 24 September 2020
Judgment for the defendant Riskflo Associates Pty Ltd against the first plaintiff Matthew Maddocks; costs for defendant against first plaintiff. Judgment for the second plaintiff ORC Professional Services Pte Ltd against Riskflo Associates Pty Ltd for $81,418.25 SGD with costs to ORC.
During the course of the opening address by counsel for the defendant, I enquired whether there was any dispute about the unpaid vacation leave. I was informed from the Bar table that the defendant did not dispute that amount either, save that the amount was owing to ORC and not to Mr Maddocks personally.
There was also no dispute at trial concerning the quantum of the Deferred Salary Payments. The argument of the defendant, set out in MFI 3, was that the time had not arrived for those amounts to become due and payable as per cl 7 of the agreement.
Paragraph 10 of the Statement of Claim pleaded consequential loss. It was alleged that Mr Maddocks communicated to Mr Kelly that Mr Maddocks would have to use his credit card facilities to pay his family's living expenses as a result of Riskflo not being able to pay the Non-Deferred Salary Payments. The plaintiffs claimed consequential damages of $5,877.38 for the interest charged on credit cards which Mr Maddocks held in his own name, which he used to support his family when payments were not made to him by Riskflo.
There was no challenge to the quantum of the amount claimed. Mr Kelly acknowledged in cross-examination that he was aware that Mr Maddocks was incurring credit card interest due to non-payment by Riskflo. Counsel for the defendant accepted in final submissions that consequential loss could be awarded in the amount claimed, although only ORC would be entitled to such damages, not Mr Maddocks.
Further, cl 53 of the contract, concerning the giving of notices, clearly stated that the employer was Riskflo and the employee was "ORC Professional Services Pte Ltd represented by Matthew Maddocks".
Counsel for the plaintiffs pointed out that many of the terms in the contract were ones applicable in usual circumstances to employment of a natural person rather than a corporation. For example, cl 1 spoke of the employee commencing "permanent full-time employment". Clause 2 spoke of the job title of the employee as "Chief Risk Officer". In fact, Mr Maddocks himself was provided with documentation by Riskflo in which he was described as the Chief Risk Officer.
Clause 7 of the contract spoke of compensation to be paid to the employee as a "salary". This is a term usually used for natural persons. Clause 19 spoke of six weeks of paid vacation, which again is something awarded to a natural person rather than a company. Clause 23 spoke of the employee agreeing to devote full-time efforts to the employment duties.
I accept the submission that some of the language used within the operative clauses of the Employment Contract does not sit easily with the notion that a company was the employee rather than a natural person. However, a corporation is in law a person. There is no reason in law why a corporation cannot be engaged as an employee to provide the services of a Chief Risk Officer. It was clearly within the contemplation of the parties that it was going to be Mr Maddocks who was to meet people with a view to promoting Riskflo's software. ORC, being a corporation, could not carry out such tasks except by its servants or agents. It was always within the contemplation of the parties that Mr Maddocks would be carrying out the tasks envisaged by the Employment Contract.
However, the following factors weigh in favour of a finding that ORC was the contracting party to the Employment Contract and not Mr Maddocks:
1. Even before the contract was executed, Mr Maddocks was invoicing for his time by sending an ORC invoice and requiring monies to be paid into an ORC bank account;
2. As recited above, Mr Maddocks told Mr Kelly in initial discussions that he was employed by ORC;
3. While there were initial discussions and earlier drafts of the Employment Contract, which describe Mr Maddocks personally as the employee, it was Mr Maddocks who requested that ORC become the contracting party;
4. It was Mr Maddocks who re-drafted the contract to change the name of the employee from his own name, to that of ORC;
5. After the contract was executed in December 2017, the work Mr Maddocks did was invoiced not by himself but by ORC;
6. It did not matter to Mr Kelly who the employee was, but it mattered very much to Mr Maddocks, as he and his wife could not remain living in Singapore unless he was employed by a Singapore registered corporation;
7. If Mr Maddocks was the employee under this contract, then he could not have obtained, and should not have obtained a government document which gave him a right to remain in Singapore. No doubt that was why he insisted that the nominated employee be changed to ORC instead of himself. Employment by Riskflo, an Australian company, would not have entitled the family to live in Singapore;
8. Mr Maddocks admitted in cross-examination that he was signing the contract on behalf of ORC, and yet in these proceedings his case is that ORC was not a party to the contract;
9. The contract was not drafted by a lawyer, but was a document downloaded from a website, which was then adjusted by Mr Maddocks and Mr Kelly, neither of whom are lawyers. There are various infelicities in the contract, such as the reference in pars 45 and 47 back to a termination pursuant to cl 42. Clause 42 which has nothing to do with termination. Further, there are references to phrases in the contract which are not defined terms and which are essentially meaningless, for example the phrase "banked time" in cl 49.
I find that the intention of the parties was that this agreement was to be a contract between Riskflo and ORC and not a contract between Riskflo and Mr Maddocks. Both parties by words and conduct would have led a reasonable person in the position of the other party to believe that ORC was the contracting party with Riskflo. A reasonable person would have understood the contract to have been one between Riskflo and ORC. This arises not only from a consideration of the text, but also from the surrounding circumstances known to the parties, and the purpose and object of the transaction.
As a result, I find that the second plaintiff ORC is entitled to judgment against Riskflo. I also find that Riskflo is entitled to a judgment against the first plaintiff Mr Maddocks.
Counsel for the plaintiffs referred the court to decisions such as ACE Insurance Ltd v Trifunovski [2013] FCAFC 3 and Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119. These cases concerned whether persons performing work were employees or independent contractors. In both cases persons were engaged to perform work under contracts which stated that they were not employees but were independent contracts. In ACE Insurance Ltd the plaintiffs claimed for annual leave and long service leave, to which they were entitled under an award. In Jamsek, the plaintiffs claimed that they were employees within the meaning of statutes which would have entitled them to superannuation and long service leave, if they were in fact employees.
Counsel for the plaintiffs took the court to those decisions to demonstrate that Mr Maddocks was performing work as if he were an employee of Riskflo. The submission ran that the Employment Contract should somehow be interpreted as though it were a contract by which Riskflo employed him personally. My findings above are to the contrary. The cases cited have nothing to do with the present dispute, which involves construction of an employment contract. In those cases, what was at issue was whether or not, for the purpose of statutory entitlements, workers were at common law employees rather than independent contractors. There is no suggestion in the present case that Mr Maddocks is an independent contractor to Riskflo. He is either an employee or he is not, and I have found that he is not. I have reached that finding because of my construction of the Employment Contract. Some of the surrounding circumstances, and some of the expressions in the Employment Contract, would support an arguable contention that Mr Maddocks was the employee under the contract. However, I have found to the contrary and I have not obtained any assistance from the authorities cited by counsel for the plaintiff.
Counsel for the defendant pointed to cl 44 of the Employment Contract which gave the employer the right to terminate the agreement without cause before 30 June 2018 on four weeks notice. Clause 44 commences with the sentence:
"The Employee recognizes that the Employer is a start-up company."
The evidence of Mr Maddocks as to how the "deferred component" was inserted into the contract appears in par 29 of PX 1. Mr Kelly had said that Riskflo was a start-up and was reliant upon progressive capital raisings. Mr Kelly said that other staff had agreed to one half of their salary being conditional upon Riskflo listing on the stock exchange. He asked Mr Maddocks to agree to that arrangement.
The evidence of Mr Maddocks was that he said:
"I am not willing to agree to that, but I will agree to payment of one-half of my salary being deferred until Riskflo next raises capital. As you are aware, I am relying upon my salary to be able to meet the costs of my family residing in Singapore."
It was after this conversation that the "deferred component" aspect of cl 7 was added to the Employment Contract.
It is plain from the evidence of both Mr Maddocks and Mr Kelly that Riskflo was a new company which was attempting to build a business. It had significant expenses and little or no income in the early phase of the company. The agreement concerning the "deferred component" was reached against that background. Counsel for the defendant submitted that it would make no commercial sense for the parties to agree that the "deferred component" would be paid if the employer exercised its rights to terminate the employee without cause pursuant to cl 44 of the Employment Contract, as this would trigger a substantial financial liability which could not be afforded at that time.
Against that background can it be said that the "deferred component" of the salary was an "outstanding portion of the compensation" when the termination date arrived in May 2018?
In my view it is an incorrect construction of cl 49 to read the word "outstanding" as meaning simply "unpaid". From the day the contract was entered into, the "deferred component" was outstanding in the sense of being unpaid. However, there was no legal obligation to pay the "deferred component" as the event which would trigger the obligation to pay had not arrived.
Given the commercial purpose of the contract, and the understanding of both parties about the finances of Riskflo, I find that the word "outstanding" in cl 49 of the Employment Contract must be understood as a reference to any unpaid amount, which the employer is then legally obliged to pay. At the termination date (and even today) Riskflo was not legally obliged to pay the "deferred component" of the compensation and thus the plaintiff's claim for this head of damage fails.
It is clear from cl 57(h) of the Employment Contract that the obligation to pay the "deferred component" survived the termination of the agreement. If the plaintiffs had been able to show by evidence that Riskflo had received capital investment funds, then ORC would have succeeded on this head of damages for a figure of $112,741.94. This is another reason for the conclusion I have reached. ORC did not lose its right to be paid then "deferred component" just because the contract was terminated. There was no reason for the parties to expect that termination without cause would accelerate and make payable a substantial liability which was otherwise not payable at that time. For the reasons set out above, that part of the claim for breach of contract fails.