Reginald Bruce Harding v Anton's Wire Products Pty Limited & Anor

Background to the Dispute 5From approximately 1995 the plaintiff had developed a number of stainless steel products for barbeque cooking equipment. He was granted patents and registered designs for a number of these products and on 23 January 2002 registered a trade name "Top Notch" for the manufacture and marketing of this equipment. From 2002 the plaintiff was a director of Equipment Tech. Through that corporation he traded the stainless steel products under the "Top Notch" brand, together with another range of products under the brand name "Aero Barbeques". Both product ranges were sold to a number of retailers including "Barbeques Galore", "BBQ Plus" and "Rubens BBQ". The bulk of the income derived by Equipment Tech was generated from the sale of Top Notch products. 6In about 2005 the plaintiff's marriage broke down which led to proceedings in the Family Court of Australia. In June 2008 orders were made by the Family Court whereby the plaintiff was required to pay his former wife monies by way of a property settlement, to be paid in instalments. In July 2008 he sold the Aero Barbeques brand, manufacturing and sales rights, in order to effect the payment of the first instalment. He was required to pay the balance of $67,000 due to his former wife on or before 30 June 2009. 7The plaintiff and the second defendant had known each other since 1987. Mr Carnevale was the principal director of Anton's and for a period of some 15 years, up to 2002, the plaintiff had a business relationship with Mr Carnevale whereby he sold metal products to Anton's which were used in the manufacture of products by Anton's. 8From 2002, the plaintiff operated his corporation, Equipment Tech, from premises at 79 Percival Road, Smithfield, which was near the premises of Anton's. The two men thereafter continued their business relationship, but also developed a social relationship with their wives. 9In 2004, the plaintiff sold his premises at 79 Percival Road to Anton's and leased back the premises, and also leased premises from Anton's at its site. At about the same time, Anton's entered into a sub-contract for processing Equipment Tech hotplates. In 2005, Equipment Tech vacated the premises that it had leased from Anton's. 10The plaintiff had for some years suffered mental health problems and had been hospitalised from time to time. One such admission occurred in March 2009 when he was admitted to Liverpool Mental Hospital following a domestic dispute. Following his discharge, the plaintiff had a conversation with Mr Carnevale at his office at 79 Percival Road (Exhibit A, para 101). The two men discussed his admission to hospital, his divorce settlement, his cash flow problems and a proposed meeting by the plaintiff with Barbeques Galore for the purpose of selling his business to that corporation. The plaintiff had previously given Mr Carnevale some figures to look at in respect of the sale of the business. 11Toward the end of May 2009, the plaintiff met with Mr Carnevale and alleges the following conversation took place, contained in Exhibit A at paragraph 105 of the plaintiff's affidavit: "a) Carnevale: I want to throw you a lifeline and put an end to all your worries. How would you like to earn between $200,000.00 and $300,000.00 per annum over the next three years without all the financial stress of cash flow, just to be able to get out and sell and let me take care of the manufacturing side of the business?" b) Harding: Well it all sounds great. Tell me how this would work. c) Carnevale: I want to buy 100% of your business, not 50/50 as partners. I want to buy Top Notch. I want you to work for me. d) Carnevale: How would you like to earn between $200,000 and $300,000 per year? e) Harding: Okay, please explain how you work everything out? f) Carnevale: I don't want to buy 50% of Equipment Tech any more. I want to buy 100% of the Top Notch product range business including website. I will pay you $150,000.00 + 10% GST for all your stock valued at cost and all your equipment at a written down value. In return you can come and work for me. You will move into my factory at 79 Percival Road Smithfield and get your old office back. I will bring the truck over and we will move all the stock and equipment over to my premises. Once the paperwork is signed for the transfer of the stock you can begin employment with me and I will pay you a base wage of $100,000.00 plus $300.00 per week for your car repayments. In addition I will pay you between $5.00 to $10.00 paid at the end of each year on all hot plates, grills, baking dishes etc sold at the end of the year. For example, 20,000 pieces sold at seven dollars each would bring you in $140,000.00. When the stock is moved over and you're sorted out in setting up the office then you can go out on the road calling on customers. g) Harding: The business turned over in excess of $1 million in the past year. Where is the goodwill payment? h) Carnevale: The goodwill payment would be paid over the next three years being paid in the commission of each product sold, and the more you sell the more you make. What it means is Anton's Wire Products would own the brand name Top Notch and you would be the Sales Manager working for Anton's Wire Products. Let me concentrate on the manufacturing and financing of the product, and you concentrate on the sales and selling because that's where your expertise lies. Equipment Tech could continue to be your company where you develop new products, like your barbecues. i) Harding: All that sounds pretty good. That would enable me to pay off my outstanding bills and get in front again. We will need to print brochures and a new price list and new business cards. j) Carnevale: I will have to organise new brochures, price lists and business cards. k) Harding: Okay, where do we go from here? l) Carnevale: I will organise my solicitor, Wayne Keen, to draw up the paperwork. m) Harding: Do I need a solicitor? n) Carnevale: No we can use the same solicitor." 12The plaintiff attended a meeting with Mr Carnevale and his solicitor, Mr Wayne Keen, at Emerton towards the end of June 2009. Before that meeting the plaintiff and Mr Carnevale had a conversation to the following effect, according to the plaintiff (paragraph 108 of Exhibit A): "a) Carnevale: Once we get the contract signed for the sale of the stock you can come and start immediately and your first task will be to complete all the move, setting up your office and being organised like a professional. b) Harding: How long do you think that will take? c) Carnevale: It may take a couple of months because I have other work to do." 13What was said at the meeting with Mr Keen on 26 June 2009 was a matter of some contention. The plaintiff alleges that the following took place (para 110 of Exhibit A): "a) Keen to Carnevale: You should not go ahead with the sale until the floating charge with Bank West has been paid. b) Carnevale: If Bruce cannot re-finance through a bank then I will buy the house at 18 Hawkesbury Street, Fairfield West myself. c) Keen to Carnevale: Do you wish to put a clause in the agreement that Mr Harding will not make a different design to sell in competition to Top Notch? d) Carnevale: No, I can trust Bruce. He is coming to work for me and will be promoting the Top Notch product range." 14On 9 July 2009, the plaintiff and Mr Carnevale attended Mr Keen's office and signed the Equipment Tech agreement, by which Equipment Tech sold to Anton's various items of stock, together with its intellectual property being six patents, registered designs and a trademark listed in the agreement for the sum of $150,000 plus GST. The plaintiff contends that the following conversation took place at the meeting prior to that agreement being signed (para 113 of Exhibit A): "a) Keen to Carnevale: I do not think you should go ahead with the purchase while there is a charge over the business with Bank West. b) Carnevale to Keen: No that's Ok. If the worst comes to worst then I will arrange finance to buy the house and pay out Bank West. (c) Keen: That's your decision. I can only advise you. d) Harding: I will need to get a letter of employment so I can go to another bank to change loans and then pay out Bank West. e) Keen: What if the bank does not approve your loan? f) Carnevale: As I said previously, I will buy the house and arrange finance so we don't have to worry about that. g) Keen: Do you want me to include a clause preventing Bruce from making at a later stage a different hotplate and grill? h) Carnevale: No, that won't be necessary as Bruce will be working with me with good incentives. i) Harding: That's right. I can make more money working for Tony than struggling by myself. j) Keen: Okay, then let's sign the paperwork with a copy to each party. Once you have written confirmation of the withdrawal of the fixed and floating charge in favour of Bank West then a payment will be made in seven days for the sum of $85,564.93. k) Carnevale: I will arrange a letter from Antons stating Bruce's employment. l) Harding: I can start looking for finance once I receive my letter of employment." 15Following the execution of the agreement on 9 July 2009, the plaintiff commenced the process of transferring the stock, the subject of that agreement, from the premises of Equipment Tech at Victoria Street, Smithfield, to Anton's premises at 79 Percival Road. The plaintiff alleges that he commenced work for Anton's by taking orders and securing sales of Top Notch products and provided to Anton's the client list of Equipment Tech. This was provided to Anton's, notwithstanding that it was not subject of the sale agreement dated 9 July 2009. 16On 15 July 2009 Mr Carnevale signed a letter (Exhibit A, p 39) which he gave to the plaintiff. It read as follows: "TO WHOM IT MAY CONCERN This letter is to advise that Reginald Bruce Harding is now employed by Anton's Wire Products P/L. His wage will be $100,000 (one hundred thousand dollars) per annum plus a weekly car allowance of $300.00 (three hundred dollars). Yours faithfully Tony Carnevale Managing Director" 17The plaintiff used that letter to apply for loans to refinance his house at 18 Hawkesbury Street, Fairfield so as to extinguish a floating charge from the assets of Equipment Tech. 18The plaintiff alleges that after 9 July 2009 he worked for Anton's and that pursuant to that employment he removed stock from the premises of Equipment Tech to the premises of Antons and wrote orders for Top Notch products which he passed onto Antons. 19The plaintiff alleges that between 9 July 2009 and the end of October 2009 he was not paid by either Mr Carnevale or Anton's. Further, during that period, despite several requests, he was unable to move into Anton's premises. Eventually a conversation took place between Mr Carnevale and the plaintiff in which the plaintiff said (para 142 of Exhibit A): "a) Harding: What is going on? You have been putting me off now for weeks and weeks, and you still haven't paid me. b) Carnevale: I am having second thoughts. I don't think it is going to work."

The Plaintiff's Evidence 20The plaintiff relies on the conversations set out as evidence of an agreement that, from 9 July 2009, for a period of three years, Anton's would employ him as an advisor and sales coordinator. He was to be paid a salary, car allowance and commission on sales pursuant to what was a contract of service, and he was to be paid on a monthly basis by way of payment to his corporation Equipment Tech. 21The plaintiff was challenged in cross-examination as to the conversations he had deposed to and which are set out above. It was put to him that the conversation in which Mr Carnevale was alleged to have said, "How would you like to earn between $200,000 and $300,000 per annum over the next three years?", did not occur. His explanation for that salary was that Mr Carnevale had offered him "A package deal, commission, car, salary between $200,000 and $300,000. So if you take the salary of $100,000, plus the car and then plus commission on products sold, and if I sold 20,000 products a year at $7, that represents $140,000. That's where the $200,000 to $300,000 has come from" (T30.7). 22It was put to the plaintiff that at the coffee shop, before meeting Mr Keen on 26 June 2009, Mr Carnevale never said words to him to the effect that he was going to be employed by Anton's (T32.48), and that he never used the amount of $100,000 (T33.1). 23The plaintiff was challenged as to the conversations that took place in the presence of Mr Keen. It was put to him that at the meeting on 26 June 2009 the words accorded in para 110 of his statement and set out above, were not spoken by Mr Keen or Mr Carnevale (T36.13-37). Similarly, the plaintiff was challenged in respect of the conversation set out in para 113 of his statement as set out above. It was put to him that the conversation in which it was suggested that Mr Carnevale had told Mr Keen that the plaintiff would be working with him with good incentives never occurred (T37.17 - 38.11). 24With respect to the letter dated 15 July 2009, it was put to the plaintiff that Mr Carnevale had provided that letter "to help you out, not as evidence of employment". It was put to him that Mr Carnevale was helping him out so that he could apply to a bank to refinance the loan to Bank West (T38.25). The plaintiff did not accede to any of the above challenges to his evidence. 25After 9 July 2009 the plaintiff agreed that he continued to operate from Equipment Tech's premises, and at no stage did he work from Anton's premises (T38.40). 26The plaintiff's explanation for the letter dated 15 July 2009 was that "it was part of the original agreement" (T42.12). 27It was put to the plaintiff that he did not give the Equipment Tech list of clients to Anton's, that he was not given an office to work in and that after the first few months he did not write any further orders for sales of Top Notch Equipment. His explanation for that was: "Things tapered off because all the sales calls and faxes were directed to Anton's number by that time." (T46.25). 28Exhibit J was a handwritten document relied on by the plaintiff purporting to evidence a contract for services. The plaintiff said that he wrote it on 29 December 2009 (T46.50). The plaintiff said he gave the document to Mr Carnevale in December (T47.25). The first two pages of the document, however, were dated 9 July and the plaintiff conceded that he had in fact approached Mr Carnevale in late July 2009 asking him to sign the document, and Mr Carnevale refused (T48.5). That document was a purported agreement between Equipment Tech and Anton's. The plaintiff's explanation was that: "I was employed with Anton's under my name, and Equipment Tech was to still continue developing barbeques and developing product." (T48.35). 29Exhibit J provided for a salary of $1,000 per week and it was put to the plaintiff that that was not $100,000 a year. His answer was that it was "$1,000 a week net" (T49.4). 30Exhibit J comprised three pages. The final page constituted a claim by the plaintiff against the defendants for commission of $31,920 based on the number of Top Notch products sold by Anton's to Barbeques Galore between July 2009 and December 2009, together with wages of $32,500 for the same period, a total of $64,420. The figure for wages of $32,500 was said by the plaintiff to be "half a year's wages and - which was $25,000 and there was $7,500 for the car" (T49.36). To calculate the commission, the plaintiff had telephoned Tim Kitchener at Barbeques Galore to ascertain the number of stainless steel hotplates sold to that company between July and December 2009 (T51.6). 31It was put to the plaintiff that he was never employed by Antons, with which he disagreed (T50.15). 32The plaintiff's evidence was that he had been asked by Mrs Carnevale on several occasions during the period July 2009 to October 2009, when was he moving into Anton's premises. It was put to him that no such conversation took place, with which he disagreed.

The Defendants' Evidence 33The defendants called Mr Carnevale, Mr Keen, solicitor, and Mrs Carola Carnevale to give evidence. 34Mr Carnevale's statement was Exhibit 1. In respect of the relevant conversations set out in Mr Harding's statement and reproduced above, Mr Carnevale denied the conversations in paragraphs 101 (g) and (h). By May 2009 Mr Carnevale knew that Barbeques Galore were not interested in buying his business. Mr Harding had provided him with some figures (Exhibit 1, p 13). 35Mr Carnevale stated that at no stage was Anton's ever interested in acquiring 50% of the plaintiff's business. As to the conversation set out in paragraph 105 of the plaintiff's statement, he denied paragraphs (a), (b), (c), (d), (e), (f), (g) and (h) thereof. At paragraph 30 of his statement he said: "I say that around the end of May or early June 2009 I had the following conversation with Mr Harding, 'I've had a look at the figures you gave me (vis Annexure A hereto) and Antons is prepared to pay $150,000 plus GST Top Notch patents, stock, website, machinery and equipment required to produce Top Notch products.'" (sic) 36Mr Carnevale denied any conversation alleged by Mr Harding whereby he was to work for either Anton's or Mr Carnevale. In fact, Mr Carnevale alleged that Mr Harding had said to him: "I'm going to run my own business and work as a contractor. I've started up my own company, Sondog, out of Victoria Street." 37The plaintiff denied saying that or setting up a company known as "Sondog". 38Mr Carnevale denied the conversation set out in paragraph 105 (m) and (n) and denied the allegations contained in paragraph 106-110 of Mr Harding's statement, (Exhibit A). 39In respect of the conversation that took place at the coffee shop prior to the meeting with Mr Keen on 26 June 2009, Mr Carnevale alleged that the plaintiff said words to the following effect: "Once this is completed I'll be able to get moving with the new company and start selling products." 40Mr Carnevale said: "Once you get organised and if these figures are okay you might be able to start selling some plates for us." 41At paragraph 36 of his statement (Exhibit 1), Mr Carnevale set out the conversation that took place at the meeting with Mr Keen on 26 June 2009. Prior to the second meeting with Mr Keen, when the agreement dated 9 July 2009 was signed by the plaintiff and Mr Carnevale, Mr Carnevale had advanced to the plaintiff the sum of $67,435.07 for the purpose of the plaintiff paying that sum to his former wife. 42Following the agreement dated 9 July 2009, Mr Carnevale stated that he moved the overwhelming bulk of stock from Equipment Tech's premises to those of Anton's. After that date, Anton's wrote all the orders for Top Notch products and there was no record of the plaintiff ever writing any order for the sale of Top Notch products by Anton's. 43Mr Carnevale said that he signed the letter dated 15 July 2009 to help out the plaintiff. At first he said he would give him a letter "for $50,000", to which the plaintiff replied: "No, I need it for $100,000 and anyway, when I start contracting, the commission will be more than $50,000 and it will add up anyway." (Exhibit 1, p 10, para 51). 44Mr Carnevale was shown the document, Exhibit J, two to three weeks after 9 July 2009. He refused to sign it and told the plaintiff: "I'm not signing this. We never had an agreement about employment." 45In cross-examination Mr Carnevale denied ever suggesting to the plaintiff that he was interested in buying 50% of his business (T83.45). All of the relevant conversations that the plaintiff relied on were put to Mr Carnevale in cross-examination. Whilst he agreed he recognised a business opportunity in the plaintiff, he denied that he was pursuing the plaintiff's assets and liabilities (T95.45). 46Mr Carnevale denied the relevant conversations in paragraph 105 (f) and following of the plaintiff's statement (T99.48 - 100.38). 47It was put to Mr Carnevale that his conduct was motivated to keep the plaintiff "on side" up until the delivery to his factory of the stock that was the subject of the agreement on 9 July 2009. He denied that proposition (T110.45 - 111.6). 48Mr Carnevale denied saying in the meeting with Mr Keen that "I will arrange a letter from Antons stating Bruce's employment" (T114.45). 49The reason the letter dated 15 July 2009 was provided was given at T115.1 as follows: "I arranged the letter because Bruce approached me on a personal basis, and I did it because, as I indicated before, he was desperate, he needed money, he needed a hand, it was on that basis that it was given." 50It was put to Mr Carnevale that he deceived the plaintiff in relation to the proposed employment when he made a proposal to him in late May 2009 (T122.18), to which he replied "absolutely not true". 51Mr Carnevale denied purchasing any goodwill in respect of Top Notch products (T125.12).

Evidence of Mr Keen 52The statement of Mr Wayne Keen, solicitor, is Exhibit 4 in the proceedings. Mr Keen kept a two-page file note of his meeting with Mr Harding and Mr Carnevale on 26 June 2009 That is Annexure A to Exhibit 4. In paragraph 3 of his statement Mr Keen set out some of the conversation he had with Mr Harding on that day. He was not challenged as to that conversation. 53On 1 July 2009 Mr Keen wrote to Mr and Mrs Carnevale (Annexure B to Exhibit 4). In that letter he advised his clients that the plaintiff had informed him of three matters, namely, that his wife no longer had an interest in the company, that there was a registered trading name for Top Notch, and that there were no monies owing by the company. Mr Keen's enquiries revealed that each of those three matters was incorrect. The letter set out certain advice for his client, concluding with advice that Mr and Mrs Carnevale should not acquire the company assets until such time as the floating charge had been removed. 54In paragraph 13 of his statement, Mr Keen referred to conversations set out in paragraph 110 of the plaintiff's statement, as outlined above, and in particular, two statements, namely, that Mr Carnevale indicated that if there was a problem with a refinance he would purchase the house at Hawkesbury Street, Fairfield, and also that Mr Carnevale said that the plaintiff was going to work for him. Mr Keen stated that neither of those conversations occurred at that time, nor did they occur as set out in paragraph 113 of the plaintiff's statement at the meeting on 9 July 2009. 55At paragraph 14 Mr Keen states that at both meetings there was never any discussion in his presence concerning Mr Carnevale purchasing the property at Hawkesbury Street, Fairfield West, or the plaintiff going to work for Mr Carnevale. He concluded by saying, the first time he became aware of the suggestion that the plaintiff was to work for the defendant was when he was contacted by Mr Carnevale after receiving the statement of claim in these proceedings (paragraph 16). 56The extent of the challenge to that evidence appears at T128.14 as follows: "Q: Is it possible that such a conversation did take place at the meeting and you don't have an accurate recollection at the time you made this statement? A: No, those issues weren't discussed." 57Mr Keen prepared the Equipment Tech agreement which is Annexure C to Exhibit 4, as signed by Mr Carnevale and the plaintiff on 9 July 2009.

Evidence of Mrs Carnevale 58Mrs Carnevale's statement was Exhibit 5 in the proceedings. She was a director with her husband of Anton's. She was not present at any meeting with the plaintiff involving the purchase of the Top Notch range of products. She denied at any stage saying to the plaintiff, "When are you moving in?" 59In cross-examination Mrs Carnevale denied saying words attributed to her by the plaintiff, namely: "How could we possibly employ a person who is mentally ill because no one else would?" 60Mrs Carnevale also denied trying to sell the stock the subject of the 9 July 2009 agreement with Equipment Tech, as quickly as possible, trying to make as much profit as possible on those items (T132.26). She denied any intent on the part of Antons to employ the plaintiff to assist Antons in the sale of barbeque plates, grills and baking dishes.

Consideration 61The onus is on the plaintiff to establish that an agreement was entered into between the plaintiff and the second defendant, that the plaintiff would be employed by Anton's for a period of three years from 9 July 2009. The plaintiff submitted that the agreement contained the following express terms: (1)That he would be employed as advisor and sales coordinator. (2)That he would commence on 9 July 2009 for a period of three years. (3)That he would work at the defendants' premises at 79 Percival Street. (4)That he would be paid a salary of $100,000 net per annum. (5)In addition, he would be paid a car allowance of $300 per week. (6)He would also be paid a commission on sales of $7 per item sold, payable at the end of the year. 62The agreement, and the terms set out above, are said to arise from the conversations that took place between the plaintiff and the second defendant towards the end of May 2009, on 26 June 2009 and on 9 July 2009, as set out in paragraphs 11-14 above. 63The plaintiff relies on the letter signed by Mr Carnevale on 15 July 2009 set out in paragraph 16 above, as clear evidence that as at that date the plaintiff was employed by Antons. That letter, followed the conversation between the plaintiff and Mr Carnevale, set out in Exhibit 1, p 10, para 51 as follows: "Can you give me a letter to say that I'm earning money to give to the bank while I am sorting out the sale of the house and the rest of the money that you owe me." 64Mr Carnevale said: "To help you out I'll give you a letter for $50,000." 65Mr Harding said: "No. I need it for $100,000 and anyway when I start contracting the commission will be more than $50,000 and it will add up anyway." 66The plaintiff submitted that Mr Carnevale's evidence that the plaintiff said those words was strong evidence in support of the plaintiff's case, and led to an irresistible inference that he had been offered employment by Mr Carnevale and had accepted it. 67The plaintiff further submitted that the fact of the agreement dated 9 July 2009 being entered into between Equipment Tech and Antons for sale of the Top Notch range of products and intellectual property for $150,000, also provides support for the plaintiff's contentions. The plaintiff was selling his main income stream, and had to replace his means of earning income by selling the Top Notch products. An inference therefore arose that he would not have done so without entering into the alleged agreement for employment. 68The plaintiff submitted that Exhibit J also supported the plaintiff's claim, notwithstanding that his evidence that he prepared it on 29 December 2009 and backdated the first two pages to 9 July 2009, was incorrect. The handwritten document was said to set out terms consistent with those the plaintiff alleged were agreed between himself and Mr Carnevale, namely, employment for a period of three years at 79 Percival Road, Smithfield, as advisor and sales coordinator, on the basis of a payment of $1,000 per week with a car payment of $300 per week, together with commission paid in December of each of the three years of the term. 69It was further submitted by the plaintiff that Mr Carnevale's attitude in relation to the floating charge over the business assets, by refusing to accept his solicitor's advice not to proceed with the floating charge over the assets, was evidence that tended to support the intended employment of the plaintiff by Mr Carnevale or Anton's. 70It was submitted on behalf of the plaintiff that Mr Carnevale saw a business opportunity to profit, based on his knowledge that the plaintiff had problems with his mental health and was involved in a family law dispute with his former wife. It was submitted that Mr Carnevale held an ambition to orchestrate the release of the Top Notch stock on the basis of the oral promise made by him in May 2009 to employ the plaintiff. The representations contained in the conversations set out above therefore were made to induce the plaintiff into entering into the agreement dated 9 July 2009 for the sale by Equipment Tech of the Top Notch products range and the letter dated 15 July 2009 was provided by Mr Carnevale as he wanted to make sure that he kept the substance of their agreement under his control. It was only when delivery of the stock had been completed that Mr Carnevale terminated the agreement. 71The plaintiff's schedule of damages may be summarised as follows: Loss of Income for 3 years at $100,000 per annum plus 9% statutory superannuation $327,052.00 Loss of Car Allowance of $300 per week for 3 years $46,800.00 Commission loss at $7 per item of stock based on 10,000 items per annum over 3 years $210,000.00 Total $583,800.00 Plus Interest

72The plaintiff submitted that the High Court's decision in Stevens v Brodribb Sawmilling Company Pty Limited (1986) 160 CLR 16 informed the determination whether a relationship of employment existed by reference to indicia such as the degree of control which a person exercises over the performance of the work, supervision of that work, together with other matters such as "mode of remuneration, the provision of maintenance of equipment, the obligation to work, the hours of work and the provision for holidays, the deduction of income tax and the delegation of work by the putative employee' (per Mason J pp 23-24). That case, however, concerned a question of whether the injured person was an employee or an independent contractor which gave rise to different obligations and liabilities. The question of employment here must be determined on the basis of whether there was an agreement established, on the balance of probabilities, on the whole of the evidence, as claimed by the plaintiff. 73In Lym International Pty Limited v Marcolongo [2011] NSWCA 303 the Court of Appeal discussed the legitimacy of the use of evidence of postcontractual conduct of parties for the purpose of determining first, whether a contract has been entered into, and secondly, as an aide to the construction of a contract that was either wholly or partly oral. Campbell JA, with whom Basten JA and Sackar J agreed, discussed the question which arises of whether evidence of postcontractual conduct that was not objected to can legitimately be used either to find the terms of, or to construe, a contract, as was the case here. His Honour referred to the judgment of McColl JA in County Securities Pty Limited v Challenger Group Holdings Pty Limited [2008] NSWCA 193. At [161] to [162] McColl JA said: "The present state of the law throughout Australia on whether, and if so when, it is possible to use postcontractual conduct as an aide to construction of the contract is not yet settled, the view, favoured in this court, being that subsequent communications cannot be looked to as an aide to construction of a contract, but can be looked to as an aide in deciding whether a contract has been entered into. However, it is permissible to have regard to the conduct of parties, even subsequent conduct, as constituting an admission of the state of the parties' rights; although care must be taken about identifying the facts said to have been admitted," (authorities and citations omitted). 74Campbell JA concluded at [121] that the majority reasons in County Securities do not have as their ratio "any proposition about the availability of post-contractual conduct for the purpose of finding the terms of an agreement that is wholly or partly oral". His Honour went on to consider two other bases for legitimate use of evidence of postcontractual conduct, namely, as admissions or as facts basing an inference. 75The question here therefore is whether, given all the surrounding circumstances, including conversations, documents (ie the Equipment Tech agreement) and conduct, whether there was an agreement, that is, whether there was an offer and acceptance and if so what did the parties agree - see Campbell JA, [137] - [140]. I have borne in mind these principles in determining the factual matters herein.

Findings 76I make the following findings: (1)I find that Mr Keen was a witness of truth and I accept his evidence in relation to the conversations that took place on 26 June 2009 and 9 July 2009 in his presence. His evidence was supported by his contemporaneous file note and I therefore find that there was no discussion between the plaintiff and Mr Carnevale in Mr Keen's presence on either 26 June 2009 or 9 July 2009 as alleged by the plaintiff, to the effect that there was an agreement that Mr Carnevale was to employ the plaintiff following the execution of their agreement dated 9 July 2009. (2)I accept Mrs Carnevale as a witness of truth whose evidence was not successfully impugned and I find that she did not say the words attributed to her by the plaintiff as set out in para 59 above. I accept her evidence that there was no intent on the part of Antons to employ the plaintiff to assist in the sale by Antons of the Top Notch products. (3)I find that the plaintiff and Mr Carnevale negotiated the sale of Top Notch products and intellectual property owned by Equipment Tech. I find that the plaintiff was motivated to sell that line of his business to enable him to comply with the orders made by the Family Court in respect of the property settlement with his former wife. The plaintiff had acted similarly previously when he sold the Aero Barbecues brand and rights to enable him to make the first payment to his wife. Mr Carnevale assisted Mr Harding in that endeavour to the extent that he paid, prior to the execution of the Equipment Tech agreement, the plaintiff the sum of $67,000.00 to enable that sum to be paid to his former wife. (4)I find that the plaintiff and Mr Carnevale reached an agreement, the whole of which was embodied in the agreement between Equipment Tech and Antons dated 9 July 2009. At no time was it discussed with Mr Keen that there be any further agreement between the parties. (5)From 9 July 2009 the plaintiff did nothing consistent with employment by Anton's. I accept Mr Carnevale's evidence that he attended to moving most of the stock. (6)I do not accept the plaintiff's evidence that from 9 July 2009 he attended to transfer of the stock from the premises of Equipment Tech to the premises of Antons and also that he attended to the taking of many orders for the sale of Top Notch products on behalf of Antons (paragraph 118 of Exhibit A). The evidence established that he received two orders in the three months period which he passed on to Antons to progress to sales. At no time did the plaintiff commence work as a salesman on behalf of Anton's. (7)When he presented the handwritten document Exhibit J to Mr Carnevale in July 2009, suggesting that there was an employment agreement, Mr Carnevale refused to sign it. In any event, that agreement was written between Equipment Tech Pty Limited and Anton's Wire Products Pty Limited. (8)The terms set out in that document did not accord with the alleged terms of the contract of services that the plaintiff advocated at trial. The plaintiff's explanation was that $1,000 per week was a net amount for a salary of $100,000.00 per annum. That is not correct. Further, the document on its face claimed a commission of $7 per item sold as being the result of "agreed between $5 - $10 per piece". (9)The third page of the handwritten document, Exhibit J, also does not support the plaintiff's claim. First, the claim for commission is based on items sold by Antons to Barbeques Galore for the period July 2009 to December 2009. These items were not sold by the plaintiff and therefore he had no entitlement to commission on those sales. More importantly, his claim for salary was based on wages of $25,000, plus car allowance of $7,500.00, a total of $32,500.00. Neither figure accords with the agreement contended by him. The wages of $25,000.00 would be for a period less than 3 months. (10)Nor does the letter dated 15 July 2009 accord with the alleged terms of the agreement. Whilst that letter supports a contention that the plaintiff was then employed by Antons, I accept the explanation given by Mr Carnevale that it was provided to the plaintiff to assist him obtain bank finance. The terms of the alleged employment set out in that letter do not accord with the terms of the contract of services contended for by the plaintiff, (i.e. there is no reference to a 3 year term or commission on sales). In the context of the dealings between the two men, Mr Carnevale's explanation for the provision of that letter is inherently more probable than the plaintiff's. Mr Carnevale had an interest in the plaintiff obtaining bank finance so that the floating charge over the plaintiff's business assets could be extinguished. (11)I do not accept the plaintiff's submission that he was induced into the agreement dated 9 July 2009 by the offer of employment on the terms set out, in order for him to replace his income stream. Notwithstanding the evidence that sales of the various Top Notch items had been substantial throughout 2006 to 2008 (see Exhibit B plaintiff's TB p 41), his income for the years leading up to July 2009 was modest according to his tax returns. His explanation that the income disclosed was supplemented by loan repayments from Equipment Tech does not affect that finding. (12)I further find that the plaintiff was not dismissed at any time by Mr Carnevale and certainly not in September 2009 as pleaded by the plaintiff. Accepting the plaintiff's evidence as to events which occurred in October 2009 as set out in paragraph 141 and 142 of his statement (Exhibit A, pp 29-30), the plaintiff's conduct was inconsistent with an employment contract being in place.

Conclusion 77On the basis of the above findings, I find that there was no relevant offer and acceptance, and no agreement between the plaintiff and Mr Carnevale as alleged by the plaintiff for him to be employed by the first defendant. 78I do not accept the plaintiff's submissions set out in paragraphs 69 and 70 above, that, on an inferential basis, the evidence supports the contract of service, and that Mr Carnevale orchestrated the oral agreement alleged so as to induce the plaintiff to enter into the Equipment Tech agreement. 79I therefore find that the plaintiff has not made out his claim.

80For the reasons set out above, I find that the plaintiff was not induced into an agreement by representations made by the second defendant in or about the end of May 2009 and July 2009. To the extent that those representations, as set out in paragraphs 11-14 above, are relied on by the plaintiff, I prefer the evidence of Mr Carnevale, Mr Keen and Mrs Carnevale. I therefore find that there were no representations made by Mr Carnevale that were false which induced the plaintiff to enter into an agreement. The words spoken by Mr Carnevale in paragraph 40 above did not constitute either an offer or an inducement to the plaintiff. 81For the same reasons, I find that none of the conduct of Mr Carnevale was such as to be characterised as misleading or deceptive conduct, or conduct likely to mislead or deceive in contravention of s 52 of the TPA or s 42 of the FTA. 82By additional written submissions filed after the conclusion of the hearing, the plaintiff submitted that if it was determined that the alleged representations by the second defendant were not found to constitute terms of an agreement as alleged, nevertheless, the plaintiff was entitled to damages on the basis of those representations in that they amounted to a promissory estoppel relying on the High Court's decision in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 per Brennan J at 428. 83The defendants submitted that this claim had not been pleaded and was being raised for the first time and therefore should not be permitted (relying on Part 14, Rule 14 UCPR and Laws Holdings Pty Limited v Short (1972) 46 ALJR 563). It is unnecessary for me to determine that issue, as on the basis of the findings that I have made, the defendants did not induce the plaintiff to enter into the Equipment Tech agreement on the basis of any offer of employment that was accepted by the plaintiff, nor did the parties continue to act on that assumed basis. Therefore, any claim made by the plaintiff based on an equitable estoppel could not be made out. 84I therefore find that the plaintiff has failed to make out either of his alternative claims for relief and there must be a verdict for the defendants.

85By cross-claim filed on 18 January 2011, the cross-claimants being Antons and Mr Carnevale, claimed two amounts said to be owing to the crossclaimants by the cross-defendant, Mr Harding, namely: (1) The sum of $4,800.00 in relation to a motor vehicle (2) The sum of $7,000.00 in relation to a bending machine. 86The defence filed on behalf of the cross-defendant admits the claim in respect of $4,800.00 but denies the claim in respect of the bending machine. That was a machine that Mr Carnevale purchased from Mr Harding which he claimed was included in the Equipment Tech agreement dated 9 July 2009. In fact, that purchase is described in Exhibit 3 (Defendants' tender bundle pgs 42-43). I find that it was a purchase not included in the Equipment Tech agreement and therefore the cross-claim is not made out in relation to that item. 87There will therefore be a Verdict and Judgment in favour of the crossclaimant in the sum of $4,800.00.

Orders 88I make the following orders: (1) Verdict for the First and Second Defendants on the Plaintiff's Claim. (2) Plaintiff to pay the First and Second Defendants costs of the proceedings. (3) Verdict and Judgment for the Cross-Claimants on the Cross-Claim in the sum of $4,800.00. (4) Each party to pay his or its own costs of the Cross-Claim. (5) Liberty to Apply on seven days notice in respect of the costs orders made herein. (6) Exhibits to be returned. 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: 20 July 2012