Transport Workers' Union of New South Wales (on behalf of Cruickshank Transport Pty Ltd) v Stegbar Pty Ltd

Application to Contract of Carriage Tribunal - contract of carriage - transport of glass products - contract provided after commencement - advice to applicant - negotiations for new contract arrangement - new contract entered into - notice of termination of contract due to downturn in work - allegations of misconduct - contract terminated prior to expiry of notice - application for compensation for loss of goodwill and other claims - whether goodwill or premiums paid to enter yard - hearsay evidence - whether evidence should be accepted - whether respondent was aware of goodwill payment - whether respondent took steps to advise that goodwill was not a requirement to enter the yard - jurisdiction of the Tribunal - effect of new contract - claims for refit of truck and loss of earnings - whether termination of contract unfair, harsh or unconscionable - assessment of compensation. CATCHWORDS: Held; decision of part time members of the Tribunal - preliminary jurisdictional challenge rejected - premium paid for work - respondent aware of the practice of premiums being paid - respondent took no steps to advise applicant premium not a requirement to enter yard - contract provided after commencement of work - jurisdictional foundation established - notice of termination of contract two working days after signing new contract - bona fides of respondent - misconduct allegations not pursued - no payments made on termination of contract - termination of contract unfair, harsh and unconscionable - loss of goodwill and ongoing work - cost of refit of truck relevant - balance of notice period to be paid - difference in earnings - compensation appropriate - amortisation of goodwill - various heads of claim assessed - compensation ordered.

LEGISLATION CITED: Industrial Relations Act 1996

Beck v Incitec Ltd t/as Chemtrans (1996) 86 IR 38 Grech t/as Grech and Son Transport v Bing Lee Electrics Pty Ltd [2005] NSWIRComm 228 Jones v Dunkel (1959) 101 CLR 298 CASES CITED: Monier Roofing Pty Ltd v Quintrell (1997) 78 IR 38 Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales of a dispute with NSW Fisheries re alleged treatment of employee in restructure [1999] NSWIRComm 135 Transport Industry - Mutual Responsibility for Road Safety (State) Award and Contract Determination (No 2), Re (2006) 158 IR 17 Transport Workers' Union (on behalf of S & M Cincotta Pty Ltd & Ors) and Visy Board [2005] NSWIRComm 178 Truckbug Pty Ltd v Blue Circle Southern Cement Ltd [2001] NSWIRComm 88

APPLICANT Mr A Hatcher of Counsel Assisted by: Mr C Heuston Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Mr A Moses of Counsel Solicitor: Mr A Douglas Douglas Workplace & Litigation Lawyers

Transport Workers' Union of New South Wales (on behalf of Cruickshank Transport Pty Ltd) and Stegbar Pty Ltd

Notification by Transport Workers' Union of New South Wales on behalf of its member Cruickshank Transport Pty Ltd for a claim for compensation pursuant to Pt 7 Ch 6 of the Industrial Relations Act 1996 DECISION OF THE PART TIME MEMBERS OF THE TRIBUNAL [2007] NSWIRComm 244 1 This decision arises from an application to the Contract of Carriage Tribunal made pursuant to Pt 7 Ch 6 of the Industrial Relations Act 1996 ('the Act') by the Transport Workers' Union of New South Wales ('the Union') on behalf of its member, Mr Joe Cruickshank ('the applicant') t/as Cruickshank Transport Pty Ltd. 2 The applicant seeks compensation from Stegbar Pty Ltd ('the respondent') following his termination on 16 February 2006 as an owner driver engaged by the respondent. The applicant claims that the termination of his contract of engagement was unfair, harsh and unconscionable within the meaning of s 349(1) of the Act. He seeks compensation for, inter alia, the loss of the goodwill he had paid for his truck in September 2003 (see s 349(4)). As required by s 348 of the Act, the application was the subject of a conciliation conference chaired by Sams DP on 4 May 2006. The conciliation of the claim failed and it proceeded to arbitration before the Tribunal (see s 349) on 30 July 2007. Background Summary 3 Prior to commencing work for the respondent, the applicant had performed work through his company delivering chickens. In mid 2003 the applicant commenced work as an employed offsider with an owner driver, Mr Frank Fenech, who was engaged by the respondent. The applicant operated out of the respondent's Lansvale site which employed about 150 people. Six owner drivers were engaged by the respondent at the site.

4 In September 2003, the applicant entered into a sales agreement to purchase the truck and run of another existing owner driver, Mr Dave Wheeler, who had been engaged since 1984 by the respondent. The contract for the business discloses a price apportionment of $50,000 for goodwill and $100,000 for the truck and equipment. The truck was an Isuzu six tonne flat top with two axles and 10,400 GVM.

5 The applicant sought advice about the sale from his accountant and solicitor. As the applicant was required to be approved by the respondent, he met with the then Transport Manager, Ms Jean Nuttal, in September 2003 to discuss taking over Mr Wheeler's business. On 11 September 2003, the sale of the business was completed having been handled by the applicant's accountant and solicitor. The applicant then commenced work as an owner driver for the respondent. 6 On 3 October 2003, the applicant's solicitor received a copy of a contract which was to be signed by the applicant and the respondent (see par 12). The applicant signed the contract and continued to work, without incident, delivering glass and glass products for the respondent. 7 Throughout 2005 negotiations were conducted between the owner drivers and the respondent for a new contract arrangement. In early November 2005, the applicant received a proposed new contract from the respondent. It was signed by him on 11 November 2005, although he said he did so under duress. 8 On 15 November 2005, the applicant received a letter from Mr Brendan Simpson, NSW General Manager - Windows & Doors, Stegbar terminating the applicant's engagement on 16 February 2006 due to a downturn in work. The terms of the letter were as follows: As you would be aware, over the past year the manufacturing operation at Stegbar Lansvale has been experiencing a significant downturn in production volume. As a consequence of this the flow on effect has impacted the volume of finished product required to be delivered to clients. It has been the practice in the past to retain the services of six (6) full time LOD's to provide a delivery service suited to the manufacturing needs. However, in light of the continued reduction in sales and reduced production volume the organisation has re-evaluated its LOD's base requirements reflecting our operational needs today. We have concluded that the manufacturing volume to delivery ratio can support only 4 vehicles on an ongoing retained basis. In accordance with the Transport Industry - General Carriers Contract Determination clause 10.2 (last on first off) being the manner in which LOD's are selected in the event that the downsizing of a fleet is required, and in accordance with the Deed of Agreement between Stegbar Pty Ltd and Cruickshank Transport Pty Ltd 2005, clause 29, we are providing you with 3 months notice of the fact that effective 16th February 2006 the Deed of Agreement between Cruickshank Transport Pty Ltd and Stegbar Pty Ltd will be terminated. This being the case the terms and conditions as contained in the Agreement will cease to be operational at that point. Thereafter, there may be the possibility of some daily contract work, although this cannot be guaranteed. We will however, be pleased to offer any as it arises to you on an as needs basis only. We regret that we have been placed in a position necessitating this unfortunate decision, however should any changes occur during the notice period we would be only to (sic) happy to discuss these with you. Thank you for your past contributions as a contractor to Stegbar Pty Ltd, and we wish you the very best for the future. 9 In January 2006, the applicant was accused of damaging company property and performed no further work for the respondent from 25 January 2006. Attempts by the Union to discuss the matter with the respondent were unsuccessful. 10 In March 2006, the applicant commenced work with Premium Packaging Pty Ltd. He was required to put a new body on his truck which cost around $10,000. The applicant worked from 12 March to 18 June 2006 as a night filler for Woolworths and since August 2006 he has worked a second job delivering flowers for Mattrans Pty Ltd. 11 The applicant said he received about $15,500 a month while engaged by the respondent. His business recorded a profit of $40,740 in 2005/6, $57,090 in 2004/5 and $61,814 in 2003/4. From 30 June 2005 until 29 September 2005 the applicant received $47,571.70 from the respondent. For the same period in the following year, he received combined earnings of $36,286.59 from Premium and Mattrans. THE EVIDENCE The Contracts 12 There were two contracts between the applicant and the respondent tendered in evidence. The first was an undated contract signed by the applicant in 2003 which he said he received three weeks after commencing work for the respondent. Clause 18 of the contract provided as follows: Either party may terminate this agreement by giving three months' written notice or such other period of notice as may be agreed in writing from time to time. Provided that nothing in this clause prevents either party from terminating this Agreement by immediate notice if the other party goes into liquidation (other than for the purpose of reconstruction), has an administrator or a receiver to its property or assets appointed, is made bankrupt or causes the other material harm.

It is necessary to also outline the terms of cl 20 of this contract: It is expressly acknowledged by the Carrier that: 20.1 The Principal does not require or request that the Carrier pay to any other party a premium or fee for goodwill or for any other consideration in connection with the entry by the Carrier into the contract, and has advised the Carrier to this effect; 20.2 The Principal does not encourage or condone the Carrier making a payment to any other party of any premium or fee for goodwill or for any other consideration in connection with the entry by the Carrier into the contract, and has advised the Carrier to this effect; and 20.3 The Principal has in no way induced the Carrier into making any payment of a premium or fee in connection with the entry by the Carrier into the contract, for goodwill or for any other consideration. 20.4 The Principal has no obligation to compensate the Carrier for loss of the benefit of this Agreement including compensation for goodwill or for any other consideration save and except for the payment by the Principal to the Carrier for services rendered up to and including the date of termination, being those payments referred to in clauses 12, 13 and 17 of this Agreement, and has advised the Carrier to this effect. 20.5 The Carrier warrants that independent legal and financial advice regarding this clause has been obtained. 13 The second Contract was undated and unsigned, although the applicant acknowledged he signed it on 11 November 2005. Clause 29 also provides a three months' notice of termination and cl 32 provides a similar provision in respect to goodwill as referred to above.

Rulings on the evidence 14 The Union provided statements of evidence from the applicant and Mr Terry McQuillan, an Organiser of the Union. The respondent filed no affidavit evidence and called no oral evidence in the proceedings. A letter to the Transport Workers' Union dated 30 March 2007 from the solicitors for the respondent explained: The Respondent's position is that it is content for the trial to be conducted upon the evidence you have filed and served.

We shall return to this matter shortly. 15 During the course of preliminary argument there was considerable debate between Counsel as to the admissibility of hearsay evidence in proceedings before the Tribunal, particularly in respect to the evidence of the applicant. We do not recount the debate in full, but note that it included references to a number of authorities on the subject, including Grech t/as Grech and Son Transport v Bing Lee Electrics Pty Ltd [2005] NSWIRComm 228 ('Grech') and Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales of a dispute with NSW Fisheries re alleged treatment of employee in restructure [1999] NSWIRComm 135.

16 After adjourning to consider Counsels' submissions, the Tribunal ruled as follows: We do not consider, having regard to the particular circumstances of this case, that there would be a denial of natural justice to the respondent if evidence of this type is admitted. This is particularly so within the context of no evidence being brought by the respondent to challenge the applicant's evidence, and the statement by the respondent in correspondence to the Union in March 2007 that it was content for the trial to be conducted upon the evidence it had filed and served.

In any event, the strict rules of evidence and the provisions of the Evidence Act do not apply to proceedings of the Tribunal. 17 We would wish to add the following observations in these reasons for decision. The Tribunal considers the following passage from Grech to be particularly apposite to the admissibility of the evidence of the applicant: 13 As will be observed from the provisions of ss 162 and 163, this Tribunal does not operate in the same way as a Court. In simplistic terms, a Court is required to determine a matter on the basis only of such evidence as is properly receivable according to the laws of evidence. There is no attempt to search for or consider what is the truth of any particular situation other than can be gleaned from the evidence properly before the Court. A Tribunal bound by s 163 operates under different conditions. This is especially so by reason of the compulsion created by s 163(1)(c). There is a positive requirement to act in the manner described. We understand the provisions of s 163(1)(c) as dictating an attempt to search for the truth of a particular matter and imposing a requirement to eschew technicalities and legal forms in order to assist this process. There is a positive obligation to apply concepts of equity and good conscience by reference to the substantial merits of a case. Of course, the rules of natural justice pervade everything that is done by the Tribunal.

18 As we earlier noted, the respondent deliberately chose not to call any evidence in response to the applicant's case. This somewhat unusual and curious approach poses obvious risks for the respondent's case; not least of which is the Jones v Dunkel ((1959) 101 CLR 298) inferences which may be said to be available in such circumstances. While we accept that the onus rests with the applicant to satisfy the Tribunal of the jurisdictional tests required in s 346(1) of the Act and, ultimately, of the merits of his claim, the failure of the respondent to call any evidence at all, leads at least, in our opinion, to a finding that the applicant's evidence is not seriously disputed and ought be accepted by the Tribunal. We would further add that we consider the approach adopted by the respondent, that is, calling no evidence at all in the proceedings, as most unsatisfactory. It was unhelpful to our deliberations on the matter. It is a practice which we would plainly discourage.

Applicant's Evidence 19 The applicant said that in 2002 he had been told by his wife's cousin (Mr Sam Fenech), who was an owner driver at Stegbar, that he was looking to sell out of Stegbar for $170,000 for his truck and goodwill. He believed the truck was worth around $70,000. When the applicant and Mr Wheeler were discussing the sale of Mr Wheeler's business, Mr Wheeler told him he had paid goodwill when he started at the yard. The applicant said that other owner drivers, namely Mr Bob Wheeler, Mr Charlie Vassallo and a Mr Paul had all paid goodwill when they entered the yard. In cross-examination, the applicant claimed that around April 2005, another owner driver, Mr Jeff Irvine sold his business to Mr Stephen Carr. Mr Carr had told him that he had paid $170,000 for the business, of which $100,000 was for goodwill. It was on the basis of these conversations that the applicant believed it was custom and practice in the yard that a payment to an outgoing driver was paid in addition to the value of the truck in order to take over a contract for work at Stegbar. 20 The applicant deposed that when he had met Ms Jean Nuttal to discuss taking over Mr Wheeler's business, he had told her that he was "paying Dave $150,000 for the truck and goodwill". She had only replied that someone in Head Office would draw up a new contract for him to sign. He maintained that, at no time, did Ms Nuttal, or anyone else from Stegbar, tell him that the payment of goodwill was not a requirement of being an owner driver for Stegbar, or that the payment of goodwill or a premium was prohibited by Stegbar. The applicant further deposed that he had never signed any contract or any other document prior to commencing work for Stegbar. He said that when he received the contract a few weeks later, there had been no negotiations about its terms. 21 In cross-examination, the applicant agreed that before purchasing Mr Wheeler's business he had spoken to his solicitor about the sale. He had provided a copy of Mr Wheeler's agreement to his solicitor. However, his solicitor had not told him that Stegbar didn't recognise goodwill. When he received the new contract three weeks after commencing work, and it was pointed out to him what cl 20 provided, there was nothing that could be done, because he already paid for the business. He conceded that had he known earlier of cl 20, he probably would not have paid the $50,000 for goodwill. By the time he had signed the new contract, he had already paid the full amount to Mr Wheeler. 22 The applicant gave evidence of the 2005 negotiations between the owner drivers and the respondent concerning a new contract. He said that management had told the drivers that the new contract would reduce the rates paid to them. When the new contract was received in November 2005, the Transport Manager at the time, Mr Gavin Higgins had said words to the effect that "if you don't sign the new contracts we're going to terminate your engagement". The applicant deposed that he had signed the contract under this threat and without knowing the differences in the terms of the current and proposed contracts. 23 A few days later the applicant said he had received a letter terminating his contract in three months (see par 8). In December 2005, the applicant was told that if work picked up he would be given an opportunity to continue as a contractor. 24 The applicant gave evidence of the circumstances surrounding the actual termination of his contract. In January 2006, he had been accused by management of damaging company property. He was required to attend a meeting with management, but couldn't attend at the specified time. He was told if he didn't come in for the meeting he would be given no more work, because management considered him to have been guilty of gross misconduct. He then contacted the Union. Despite representation from the Union, the Company refused to meet to discuss the allegations. The applicant did not perform any further work for Stegbar from 25 January 2006.

25 In further cross-examination, the applicant was questioned about his financial records which were annexed to his statement. He said that there were loans outstanding to his parents who were both beneficiaries of the Cruickshank Family Trust. The applicant said he was unsure of the details in the accounts relating to goodwill as they had been prepared by his accountant. His accountant had set an amount of $1,400 a fortnight for him as an employee of the Trust. 26 Mr McQuillan was not required for cross-examination. In his statement, he described what was discussed in a number of meetings in 2005 with Mr Steve Bisshopp (Industrial Relations Advisor - Frontline Human Resources) and other Stegbar management about the terms of a new contract for owner drivers. He said that at one meeting he had raised the issue of goodwill and Mr Brendon Simpson, from the Company, had acknowledged goodwill existed when he had said that "its for Frank, Paul, Joe and Charlie, but not for the others". 27 The remainder of Mr McQuillan's statement dealt with his conversation with the applicant about the damaged windows and his approach to Mr Bisshopp for a meeting. Mr Bisshopp had declined to hold a meeting. When Mr McQuillan had said that goodwill was involved, Mr Bisshopp had replied "we'll see you in court".

SUBMISSIONS For the applicant 28 Mr A Hatcher of Counsel submitted that each of the five jurisdictional requirements in s 346(1) of the Act had been made out. As to subpar (a) there could be no doubt that the applicant's company, Cruickshank Transport Pty Ltd, had taken over the business of D & K Wheeler Pty Ltd in so far as its work for the respondent was concerned. As to subpar (b) of s 346(1), similarly, there could be no doubt, from a perusal of the sale documents and the applicant's cross-examination, that an amount of $50,000 was paid as goodwill in the sale process. That is the amount of the claim in respect to the premium paid and other claims are also sought. 29 Mr Hatcher relied on the applicant's evidence about conversations he had with five other drivers concerning the custom and practice at the yard of trucks being sold with work. In the absence of any contrary evidence, the Tribunal was entitled to conclude that the other drivers were telling the truth. In addition, Mr McQuillan recounted a conversation with a Stegbar Manager, Mr Simpson, in which Mr Simpson acknowledged that goodwill applied to at least four of the owner drivers in the yard. Mr McQuillan was not called for cross-examination and Mr Simpson was not produced to contradict what it was said he had told Mr McQuillan. Mr Hatcher cited Truckbug Pty Ltd v Blue Circle Southern Cement Ltd [2001] NSWIRComm 88 at paras 18-26 as to the approach the Tribunal would adopt as to the question of whether a custom and practice of the payment of goodwill had existed. 30 As to the fourth requirement - that the principal contractor knew of the practice of goodwill - Mr Hatcher again relied on the uncontradicted evidence of the applicant, in that at the time of the sale of Mr Wheeler's business, he had told Ms Nuttal he was paying goodwill for Mr Wheeler's business. Accordingly, it was obvious that the respondent knew of the transaction and had done nothing to discourage the applicant from paying goodwill (subpar (e) of s 346(1)). Moreover, a contract which was provided to the applicant well after he had commenced work, and which referred to the prohibition of goodwill, could not possibly be used to support a proposition that the respondent had taken the necessary steps required in subpar (e) of s 346(1). 31 Mr Hatcher referred to three elements of unfairness in the termination of the applicant's contract, by again relying on the uncontradicted evidence of the applicant. Firstly, the respondent produced no evidence of the stated reason for the termination; namely, a downturn in work. Moreover, it was demonstrably unfair for notice of termination to be given only two working days after the signing of a new contract. 32 Secondly, Mr Hatcher said that a number of authorities have found unfairness where an owner driver had been terminated due to a downturn in work, without being paid compensation for the loss of goodwill: See Beck v Incitec Ltd t/as Chemtrans (1996) 86 IR 38 and Monier Roofing Pty Ltd v Quintrell (1997) 78 IR 38. 33 Thirdly, Mr Hatcher put, to make matters worse, there was another reason given by the respondent for terminating the applicant's contract - misconduct. The applicant's evidence surrounding this matter was uncontradicted and demonstrated a complete denial of procedural fairness. The applicant was never given any opportunity to answer the allegations of damaging product. The Tribunal would therefore, conclude that the allegations were entirely unfounded. 34 Mr Hatcher then dealt with the issue of compensation. He said it was plain that the applicant had completely lost the goodwill payment of $50,000. He had suffered a period of unemployment of around four weeks, equating to $14,636. He was required to refit his truck for $10,000. These claims totalled $74,636. In addition, the applicant would be entitled, for a reasonable period, to the difference between his earnings at Stegbar with his earnings at Premier and Mattrans. As total compensation, an amount of $100,000 was not unreasonable. For the respondent 35 Mr A Moses of Counsel raised a fundamental threshold issue which he claimed was fatal to the applicant's claim being accepted by the Tribunal. Mr Moses submitted that the applicant's contract had been terminated under the contract he had signed in November 2006. Therefore, the relevant contract for the purposes of these proceedings must be the second contract which replaced the contract he signed in 2003. It followed that as the second contract had no premium or goodwill associated with it, none of the jurisdictional prerequisites to permit the claim proceeding were available. Mr Moses relied on Grech to support this proposition. 36 As an alternative submission, Mr Moses firstly, conceded that subpar (a) of 346(1) had been established, and while subpar (b) might be said to have been established, there was no specific evidence of how the $50,000 for goodwill had been determined. 37 As to subpar (c), Mr Moses submitted that the applicant's hearsay evidence, as to the custom and practice of paying premiums at the yard, was not probative evidence and a Jones v Dunkel inference could apply because the applicant had failed to call any of the other owner drivers to give evidence. He said it required more than a mere assertion by the applicant of what was said to him by others. The evidence of a custom and practice is a question of fact which must be determined by reference to the facts of a particular case. 38 In respect to subpar (d), Mr Moses conceded that, on the state of the evidence, it was open for the Tribunal to conclude that the respondent ought reasonably to have known that the premium or fee had been paid by the applicant to the previous carrier, Mr Wheeler. 39 As to subpar (e), Mr Moses submitted that the respondent had taken reasonable steps to advise the applicant that it was not a requirement for a fee or premium to be paid. Notwithstanding the evidence that the applicant received the contract after commencing work, he and his solicitor knew full well of its terms and, in particular, the prohibition of goodwill in cl 20. 40 Mr Moses put that there had been no suggestion that the reason for the respondent terminating the applicant's contract was a sham; it was a reconstruction of its business due to a downturn in work. The respondent gave the appropriate contractual notice. Nevertheless, Mr Moses accepted that there might be some potential for a finding that payment between 25 January 2006 and 16 February 2006 should be made. 41 As to any further compensation, Mr Moses submitted that the Tribunal would acknowledge that for a period of two and a half years the applicant earned considerable amounts of money; sums in excess of $170,000 a year. Whatever be his taxation arrangements, these were irrelevant to the significant amounts he had earned. Mr Moses said that there was no attempt to amortise the value of the goodwill: See Transport Workers' Union (on behalf of S & M Cincotta Pty Ltd & Ors) and Visy Board [2005] NSWIRComm 178 ('Visy'). Further, the claim of $10,000 for modifying his truck merely added value for any future resale. Mr Moses questioned why there should be a claim against the respondent for such a modification. Mr Moses added that there was no basis for a claim of the difference in the applicant's earnings after the termination of the contract where three months notice had been given; albeit if three weeks unpaid fell short of the total notice.

In reply 42 Mr Hatcher replied that the respondent's 'big' jurisdictional point falls flat when considered in the context of the jurisdiction of the Tribunal under the Act. The provisions of s 345 define a head contract of carriage in a very broad way and it is not confined to a particular contract in force at a particular time. The Tribunal would look at the overall arrangement and ongoing practice between the parties. The Tribunal is not constrained in a narrow way by looking at particular written contracts. He said that Grech was not on point, as it related to a fundamental new practice or arrangement than had applied before the termination of the contract. Even if Mr Moses' construction was right, there would need to be a properly executed contract in place. Here the evidence disclosed that the second contract had not been properly executed. 43 Mr Hatcher rejected Mr Moses' suggestion as to a Jones v Dunkel inference because no other owner driver had been called to give evidence. He said that, if anything, a Jones v Dunkel inference applied the other way, where no contrary evidence was called at all by the respondent. 44 As to the amount of goodwill, Mr Hatcher said that the Tribunal was entitled to rely on the contract of sale as to the apportionment of goodwill. Indeed, it might be said in a transaction where a truck is assessed at $100,000, but valued at $30,000 a few years later, that $50,000 for goodwill was an underestimate. CONSIDERATION The Legislative Background 45 The constitution and functions of the Contract of Carriage Tribunal are detailed in Pt 7 Ch 6 of the Act and we need not repeat the provisions: See Visy at paras 9-14. Nevertheless, we reiterate that the Tribunal's jurisdiction to firstly, find that the termination of a contract of carriage was unfair, harsh and unconscionable and secondly, whether compensation should be ordered under s 349, arises only if five jurisdictional requirements are established. These are detailed at s 346(1) of the Act which are as follows: (a) the carrier entered into the head contract of carriage by arrangement with a previous carrier whose provision of services to the principal contractor under contracts of carriage was replaced by the carrier, and (b) under the terms of the arrangement between the previous carrier and the carrier, a sum of money was paid by the carrier to the previous carrier as a premium or fee in connection with the entry into the head contract of carriage by the carrier, and (c) it is a custom and practice in the relevant section of the industry or business of the principal contractor that such a premium or fee be paid, and (d) the principal contractor knew or ought reasonably to have known that such a premium or fee had been paid to the previous carrier, and (e) the principal contractor failed to take reasonable steps to advise the carrier that it was not a requirement of the principal contractor that such a payment be made or requested.

46 When determining whether any compensation should be paid, and if so, the amount of such compensation, s 349(4) requires the Tribunal to have regard to the following matters : (a) the amount of the premium or fee paid by the carrier as referred to in section 346, (b) any amount paid to the carrier by the principal contractor (including but not limited to redundancy payments) in respect of the termination of the head contract of carriage, whether or not such payment was made expressly on account of the payment of that premium or fee, (c) the duration of the head contract of carriage, (d) the likelihood of the carrier being able to use the motor vehicle required by the head contract of carriage for other types of work, and the availability of any such work, (e) the re-sale value of the motor vehicle, (f) the preparedness of the principal contractor to guarantee a flow of work to the carrier for a specified period in the future.

Preliminary Jurisdictional Challenge 47 Mr Moses submitted that not only did the applicant fail to establish all of the jurisdictional requirements in s 346(1) of the Act, but a preliminary and fundamental jurisdictional hurdle was fatal to his claim succeeding. We think it necessary to consider this issue at the outset. 48 Shortly put, Mr Moses submitted that the applicant signed a second contract with the respondent on 11 November 2005 which effectively rescinded the 2003 contract. It was said that at the point of termination of the contract (16 February 2006) the only contract in force was the second contract. It followed that as this contract had no fee or premium attached to it, the applicant's claim must fail at the first jurisdictional hurdle. 49 Despite Mr Moses' novel and valiant submissions, we consider that the proposition he advanced must fail. In our view, the provisions of Pt 7 Ch 6 of the Act must not only be read beneficially: See Re Transport Industry - Mutual Responsibility for Road Safety (State) Award and Contract Determination (No 2) (2006) 158 IR 17, but when viewed by reference to the definition of head contract of carriage at s 345, cannot possibly be read in the manner contended. That definition is expressed as follows: head contract of carriage means an agreement, arrangement or practice under which a principal contractor and carrier agree that the carrier is to provide services exclusively and on an agreed regular basis for the principal contractor. 50 It seems plain enough from the language used, that a head contract of carriage is not restricted to a contract - be it an oral or expressed contract. If it was otherwise, the term contract would have been used exclusively. Here it is not even used at all. The use of the words 'agreement', 'arrangement' or 'practice' obviously provides the basis for a broad definition of the nature of the relationship between the principal contractor and the carrier. We do not understand how there could be any doubt about the legislature's intent when using these descriptors. By using these general words there can be no doubt at all as to the broad meaning and effect of the provisions. 51 In any event, two other considerations arise. Firstly, we agree with Mr Hatcher that even if such a narrow interpretation was to be accepted, it would require a properly executed contract to form the basis of a new and different relationship. There was no evidence that such a contract was properly executed. Indeed, the evidence was to the contrary. We observe that this evidence demonstrates that the definition of head contract of carriage is very wide and comprehends an industry practice of a variety of loose and less rigid arrangements than formally executed contracts. Secondly, the definition of head contract of carriage refers to an agreement between the principal contractor and the carrier. The uncontradicted evidence here disclosed that the second contract was signed by the applicant under duress, in circumstances which could hardly be characterised as an agreement. In noting this, we have serious doubts of the bona fides of a company which demands the signing of a new contract and only two working days later gives notice of the termination of the contract due to a downturn in work. Does the respondent really expect the Tribunal to accept that it was not considering terminating at least two contract drivers when it required the signing of the contracts two days earlier? 52 For the above reasons, we reject the respondent's preliminary jurisdictional challenge to the claim. Other jurisdictional prerequisites 53 As an alternative submission, Mr Moses accepted that subparas (a) and (b) of s 346(1) of the Act had been established. He further conceded, properly in our view, that subpar (d) may also have been established. However, the respondent did not accept that a custom and practice of paying a fee or premium had been established on the hearsay evidence of the applicant. We reject this submission. In light of the respondent calling no evidence at all in this case - let alone any contrary evidence - or effectively challenging the applicant's evidence in cross-examination, it is open for the Tribunal to find that what the other owner drivers had told the applicant about the custom and practice in the yard, was truthful. 54 As to the respondent taking reasonable steps to advise that it was not a requirement for a fee or premium to be paid, we accept the applicant's evidence that he was not told of this requirement at the time of interview with Ms Nuttal, or any relevant time subsequently. As it was open for the respondent to call Ms Nuttal or such other management persons to deny the practice, we believe a plain Jones v Dunkel inference is available. We also consider that reliance on the words of a contract, which was provided three weeks after the applicant commenced work, does not absolve the respondent's obligations under s 346(1)(e) of the Act. In short, it was too late. 55 Accordingly, we find that all of the jurisdictional prerequisites under s 346(1) of the Act have been satisfied.

56 The Tribunal is satisfied that the termination of the head contract of carriage between the applicant and respondent was unfair, harsh and unconscionable within the meaning of s 349(1) of the Act. We accept Mr Hatcher's submissions as to the unfairness visited upon the applicant in this regard. In addition to the loss of goodwill, he suffered a loss of an ongoing expectation of work, he experienced a period of unemployment (albeit short), he was required to modify his truck and he suffered a difference in income between his engagement by the respondent and later engagements. We also consider that he was completely denied any procedural fairness as to the allegations of misconduct which brought his notice period prematurely to an end. We note and appreciate that Mr Moses prudently did not seek to elaborate on this matter and did not seek to put it in issue in the proceedings.

Calculation of Compensation 57 In determining the quantum of compensation to be ordered in this case, the Tribunal has had regard for the matters outlined in s 349(4) of the Act. 58 As we earlier stated, we are satisfied that the evidence has shown that a premium was paid by the applicant at the time of him entering the yard at Stegbar. The applicant claimed this premium payment was $50,000 and this amount is reflected in the sale document. The premium payment ensured the applicant the possibility of earning a reasonable income for the term of the contract. In fact, in our view, an income of $170,000 per annum for a period of over two years, was a substantial income for a six tonne truck. 59 The Tribunal is of the opinion that this premium figure should be amortised over a reasonable period of time; with the amortised amount taken up annually as an expense against the business, thereby gaining the subsequent taxation concessions available for the business. In this way, the premium paid gradually decreases over the years of expected engagement, and would ideally be zero when the contract ends. This, however, would be the case in an ideal world; but it does mean that at the end of the contract there should be no premium warranted or sought, as the ongoing value would be zero. In this case, the applicant was afforded a reasonable income for over two years. Accordingly, we have decided to order $40,000 compensation under this head of claim. 60 The letter of 15 November 2005, terminating the contract, clearly advised that the three month notice period ended on 16 February 2006 as did the contract itself. We accept the evidence that the last payment to the applicant was up to 25 January 2006. The reason given for this was that the applicant had committed gross misconduct by allegedly damaging company property. In our view, and as Mr Moses properly conceded, the applicant was short-paid his notice entitlement by three weeks. We therefore order the sum of $11,000 (three weeks at $3,666) to be paid as compensation under this head of claim. 61 In order that the applicant might obtain work following termination of the contract, the truck body required modifications costing $10,000. This was only made necessary as a result of the termination, and the fact that a special body or special framing was required for the Stegbar work. We accept that the capital cost of this body eventually forms part of the asset value of the truck. It is retained by the applicant and depreciated over the life of the truck body. However, as the initial cost of this work had been borne by the applicant immediately following termination, compensation for the labour component of the conversion and one years write off of the body would seem appropriate in the circumstances. While acknowledging that the applicant still continues to use the vehicle and retain the asset, we nevertheless order $5,000 compensation to be paid under this head of claim. 62 In regard to the ongoing loss of earnings as a result of the termination of the contract, we believe that the difference in earnings between engagement at Stegbar and engagement at Premium and Mattrans for a period of seven weeks to be reasonable. We order a sum of $6,000 (seven weeks at $857 per week) be paid as compensation under this head of claim. 63 The total compensation so ordered is $62,000.

ORDERS 64 Pursuant to s 349 of the Industrial Relations Act 1996, the Contract of Carriage Tribunal established under the Act orders that:

1. Stegbar Pty Ltd shall pay to Cruickshank Transport Pty Ltd an amount of $62,000.

2. The amount so ordered shall be paid within 28 days.

AMENDMENTS HISTORY: 06/12/2007 - Pursuant to Rule 38 of the Commission's Rules, the Tribunal orders that:1. The first order appearing at para 64 of this decision, be deleted and replaced by the following:"Stegbar Pty Ltd shall pay to Cruikshank Transport Pty Ltd an amount of $62,000." - Paragraph(s) 64

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