Tribunal Rejects Contract Carriers' Claims for Compensation

The Tribunal dismissed claims by contract carriers seeking compensation after their contracts were terminated due to a loss of major client. The decision was based on the finding that the termination was fair, reasonable and did not breach any custom or practice in the industry.

OUTCOME: Dismissed

Industrial Relations Commission of New South Wales

CITATION: [NAME_1] (on behalf on [COMPANY_2] and [COMPANY_3]) and [COMPANY_5] [2007] [NAME_7] 286

APPLICANT [NAME_1] PARTIES: RESPONDENT [COMPANY_5](S): IRC64; IRC65 of 2007

CORAM: Sams DP; [NAME_8]; [NAME_8]

[NAME_9] to Contract of Carriage Tribunal - contracts of carriage in the road [NAME_10] - five year contract for delivering of paper - contract not renewed - contract drivers entered into contracts during term of major contract - payment of goodwill to enter the yard - assignment of existing contracts - requirement to sign acknowledgement that goodwill not required to be paid - whether respondent was aware of goodwill payment - terms of contract prevented any compensation for loss of contract - custom and practice of paying goodwill in the yard - hearsay evidence - whether respondent took steps to advise that goodwill was not a requirement to enter the yard - whether respondent offered alternative work to displaced carriers - no offer of alternative work taken up - preliminary jurisdictional issues - whether there was a head contract of carriage - whether the drivers were carriers - whether the respondent a principal contractor - jurisdiction under s 346 of the Act - whether termination of contracts unfair, harsh or unconscionable - whether compensation should be paid by principal contractor. CATCHWORDS: Held; decision of part time members of the Tribunal - unnecessary to determine preliminary jurisdictional issues - premiums or goodwill paid to enter yard - respondent was aware of practice of goodwill being paid - custom and practice established - applicants signed acknowledgement that the respondent did not require goodwill to be paid and that goodwill was not a custom and practice - both applicants were aware of and understood terms of acknowledgement - assigned contracts contained provision for no compensation - both applicants were aware of and understood contract terms - major contract for five years until October 2006 - contracts not renewed - offers of alternative work should have been investigated - jurisdictional hurdle in s 346(1)(e) not overcome - terminations of contracts not harsh, unfair or unconscionable - [NAME_9] for compensation dismissed.

LEGISLATION CITED: Industrial Relations Act 1996

BP Refinary (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Galea v Amatek (1996) 86 IR 455 CASES CITED: Monier Roofing Pty Ltd v Quintrell (1997) 78 IR 38 Rumsey v R Clifford & Son Holdings Pty Ltd (1996) 68 IR 75 [NAME_11]) Contract Determination [2007] [NAME_7] 183 Truckbug Pty Ltd v Blue Circle Southern Cement Ltd [2001] [NAME_7] 88

HEARING DATES: 27 August 2007; 28 August 2007; 29 August 2007

DATE OF JUDGMENT: 30 November 2007

APPLICANT [NAME_13] by: [NAME_12] [NAME_1] LEGAL REPRESENTATIVES: RESPONDENT [NAME_14] of counsel Solicitor: [redacted] [NAME_14]

JUDGMENT:

- 51 - CONTRACT OF CARRIAGE TRIBUNAL

CORAM: SAMS, [NAME_8], [NAME_8], MR G

30 November, 2007

Matter No IRC07/64

[NAME_1] (on behalf of [COMPANY_2]) and [COMPANY_5] by [NAME_1] on behalf of its member [COMPANY_2] for a claim for compensation pursuant to section 348(2) of the Industrial Relations Act 1996

Matter No IRC07/65

[NAME_1] (on behalf of [COMPANY_3]) and [COMPANY_5] by [NAME_1] on behalf of its member [COMPANY_3] for a claim for compensation pursuant to section 348(2) of the Industrial Relations Act 1996

DECISION OF THE TRIBUNAL [2007] [NAME_7] 286 1 [NAME_15] t/as [COMPANY_2] and [NAME_3] t/as [COMPANY_3] ('the applicants') were contract carriers engaged by [COMPANY_5] ('the respondent') at its Chullora site. On 20 October 2006, the applicants' contracts of engagement were terminated by the respondent due to the loss of a major contract. Their letters of termination, expressed in identical terms, were as follows: We have been informed today that [NAME_16] will not be renewing our contract for transport services, effective October 20, 2006. Under clause 5.4(ii) of your contract we hereby give you the required notice period to terminate our Agreement. Due to the outcome of clause 5.4(ii) we have suffered a Fundamental Change in our business and therefore give you notice under clauses 5.3 and 5.4(i). [NAME_16] have indicated that they will engage the current contractors to provide services direct to [NAME_16] and will approach those contractors at the appropriate time.

In the event that there are not enough positions contracting direct to [NAME_16], [NAME_4] will interview any contractors who may wish to contract to our general fleet. Positions will be subject to the availability of work and the suitability of the vehicle specification. We appreciate your efforts over the duration of the contract and trust that those efforts will continue until the termination date.

2 On 19 January 2007, the [NAME_1] ('the Union') filed claims for compensation on behalf of the applicants pursuant to Pt 7 Ch 6 of the Industrial Relations Act 1996 ('the Act'). Both applicants seek monetary compensation on the grounds that the termination of their contracts of engagement were unfair, harsh and unconscionable within the meaning of s 349(1) of the Act. Pursuant to s 348 of the Act, the parties came before Sams DP on two occasions for conciliation. Conciliation proved unsuccessful and the Contract of Carriage Tribunal was constituted, pursuant to s 347, to hear and determine the claims according to the requirements set out in s 346 and s 349 of the Act, which we set out hereunder:

346 Claim for compensation (1) A carrier whose head contract of carriage is terminated by a principal contractor may claim compensation from the principal contractor if: (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.

(2) A carrier is not prohibited from making a claim under this section because the carrier performs minor or incidental work for a person other than the principal contractor under the head contract of carriage. 349 Arbitration of claim (1) The Tribunal may determine that compensation is payable in relation to a claim only if it is satisfied that the termination of the head contract of carriage concerned was unfair, harsh or unconscionable.

(2) The Tribunal may direct that any person (including, but not limited to, a previous principal contractor) who or which is not a party to a claim notified to the Industrial Registrar under section 348 (1), is to be a party to the arbitration proceedings.

(3) Subject to subsection (4), the Tribunal may order that a carrier, previous carrier, principal contractor or previous principal contractor joined as such a party is liable to pay solely, or jointly with another party or parties, compensation under this Part.

(4) In determining whether or not compensation is payable and, if so, the amount of compensation, the Tribunal is 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.

(5) If the Tribunal determines that compensation is payable by more than one party, the Tribunal is to determine the respective proportions of the total sum to be paid by each.

(6) Quantification of any compensation is to be approached as though in a claim for damages for breach of contract and compensation is payable only in respect of pecuniary loss resulting from termination of the head contract of carriage. Without limiting the amount of compensation that may be determined to be payable, compensation may include the whole or a part of the amount of premium or fee paid by the carrier.

(7) A claim for compensation may not be dealt with by the Tribunal if the claim (however described) is the subject of an application before, or has been determined by, any court or other tribunal.

(8) The Tribunal must not make a determination under this Part if the determination has the effect of altering or varying a contract agreement or a contract determination.

3 The respondent has raised three preliminary jurisdictional issues in answer to the applicants' claims as follows:

a) there were no head contracts of carriage between the respondent and either of the applicants;

b) the applicants were not 'carriers' for the purposes of s 346(1) of the Act; and

c) the respondent was not a principal contractor in relation to the applicants.

We shall later return to outline the submissions of the respondent on these jurisdictional issues. 4 For the purposes of the hearing, the [NAME_9] were joined and it was agreed that the evidence in one was to be treated as evidence in the other. Documentary Evidence 5 In view of the significant reliance placed by the respondent on various documents signed by the applicants we intend, at the outset, to identify the relevant material or extracts there from. 6 A standard contractor assignment agreement was required to be signed by the respondent, the driver selling his truck and the driver purchasing the truck. It is expressed as follows: PARTY 1) [COMPANY_5] [PHONE] / ABN 54 576 366 297 and [NAME_17] and PARTY 3) ASSIGNEE This Agreement serves to formalise an Agreement between Parties 2) and 3) listed above, as a result of Party 2) negotiating with Party 3) the Assignment of it's existing Contractor Agreement with Party 1).

Party 1)'s inclusion in this Agreement is for the purpose of approving this Assignment, in accordance with Clause 8.2 of the existing Contractor Agreement. I (sic) executing this Agreement, Party 2) has all rights within the existing Contractor Agreement voided, with the rights and obligations within the latter Agreement being transferred to Party 3). Both Party 2) and Party 3) recognise and fully understand their rights and obligations in relation to this Assignment, as detailed in [NAME_18]'s Information Package dated 4 August, 2003, with [NAME_18], acting for Party 1). The completed "Acknowledgment Form" is attached as part of this Agreement and is to be signed by Party 3). 7 The acknowledgement form referred to in the last paragraph above was a separate document and was expressed in the following terms: I understand that I will be required to execute a Driver Agreement with [NAME_4] in order to access work with them. This Driver Agreement has been provided to me for consideration. [NAME_4] will consider my suitability to provide driver services and may permit me to enter into a Driver Agreement if I satisfy their requirements as set out in the Driver Agreement. It has been explained to me by [NAME_4] and I understand that [NAME_4] does not require a premium or fee to be requested or paid in order to enter into a Driver Agreement with them and there is no custom and practice within [NAME_4] that premiums or fees be paid to access work under a Driver Agreement. 8 The standard drivers' or contractor agreement contains the following relevant provisions:

The term of the agreement is found at Clause 4. The commencement date referred to is 1 October 2001. Subject to earlier termination under clause 5, this Agreement shall commence on the Commencement Date defined in Schedule 1 ("the Commencement Date") and continue in force for a period of five (5) years unless terminated by either party in accordance with the provisions of this Agreement. At least three months prior to expiration of this Term, [NAME_4] will advise the Contractor if a new Agreement is to be offered to the Contractor. 9 Clause 5 deals with the termination of the contract. Relevantly Clause 5.3 provides:

[5.3] Either party may terminate this Agreement without notice before the end of the Term if a Fundamental Change occurs in the business of either party such as would prevent it from completing the Agreement.

'Fundamental change' is defined as: means a change in the circumstances of one of the Parties, however caused, which results in the Party not being able to fulfill its obligations under this Agreement. 10 The following provisions deal with termination of the contract with notice: (i) Except for the circumstances listed in part (ii) of this clause, either party may terminate this Agreement before the end of the Term for any reason upon the expiration of the required period of notice in writing to the other party. The required period of notice shall be one month. No compensation will be payable in these circumstances. (ii) If a contract between [NAME_4] and a [NAME_4]' customer is terminated for any reason before the end of the Term, this Agreement will terminate. The period of notice provided to [NAME_4] by the [NAME_4]' customer, less one working day, will be the amount of notice provided by [NAME_4] to the Contractor. No compensation will be payable in these circumstances. (iii) If either party terminates this Agreement in accordance with Clause 5.4(i) above, during this notice period, the Contractor shall train a new driver in all [NAME_4] and [NAME_4]' customer processes associated with the delivery of the Services, if required to do so by [NAME_4]. 11 Clause 6 provides that no compensation is payable on termination of the contract: CONSEQUENCES OF TERMINATION 6.1 Upon lawful termination or expiration of this Agreement, the Contractor shall: (a) not be entitled to any compensation or damages; (b) return any equipment supplied by [NAME_4] in good order; (c) provide to [NAME_4] all money collected for and documents issued on behalf of [NAME_4] by the Contractor; (d) return all property, including keys and access passes, which may then be or ought to be in the Contractor's control or possession; (e) ensure that all signage and imaging required by [NAME_4] and [NAME_4]' customers in accordance with clause 2.1(g) is removed; (f) supply all final invoices detailing any and all payments due to the Contractor from [NAME_4] within 7 days of termination. 12 Clause 8 deals with the assignment of the contract from one driver to another: ASSIGNMENT 8.1 During the term of this Agreement, the Contractor shall not assign, subcontract, transfer, mortgage, charge or encumber all or any part of its rights, benefits or obligations under this Agreement, without the prior written permission of [NAME_4]. 8.2 The proposed assignee ("the Assignee") must be approved by [NAME_4] and [NAME_4] may at its discretion require a trial period of fourteen days before its determination as to whether to grant written permission for the assignment of this Agreement, such permission shall not be unreasonably withheld. 8.3 The Contractor is responsible for professional training of the Assignee in all [NAME_4] and [NAME_4]' customer processes wherever such assignment occurs. The Assignee must be suitably qualified. Brief chronology of events 13 The respondent is a transport company operating in Sydney, Melbourne and Brisbane and engages both contract and employee drivers at a number of depots. On 1 October 2001, the respondent entered into a five year contract with [NAME_16] delivering paper in the Sydney area. At that time, the respondent entered into contractual arrangements to engage the 18 to 20 drivers who had been previously employed directly by [NAME_16]. Both applicants commenced working for the respondent during the life of the contract between the respondent and [NAME_16] - [NAME_2] in February 2002 and [NAME_3] in August 2003. 14 In January 2002, [NAME_2] responded to a newspaper advertisement for the sale of a truck and business owned by [NAME_19], for an amount of $130,000. The truck was a 1996, 5.6 tonne, Hino table top worth about $50,000. On 10 February 2002, [NAME_2] paid [NAME_19] a 10% deposit. He met with [NAME_18], the respondent's Transport Manager on 18 February 2002. Minutes of this meeting signed by [NAME_2] indicate that: · [NAME_18] ([NAME_18]) tabled and explained the statement required to be signed by [NAME_2] acknowledging that no premium or goodwill factor should be included in the private, commercial transaction covering the Truck Sale. · [NAME_18] presented [NAME_2] with a copy of the standard incorporated Driver Agreement, it was agreed to supply [NAME_2] with a copy of the standard unincorporated Driver Agreement. · [NAME_18] advised [NAME_2] to seek independent legal and / or accounting advice in relation to the Driver Agreement assignment being offered by [NAME_19]. 15 [NAME_2] commenced training on 19 February 2002 and paid [NAME_19] the balance of the sale price on 26 February. The acknowledgement form referred to in the minutes is shown as being signed on 26 February 2002 and witnessed by another driver, [NAME_20]. [NAME_2] signed the driver agreement on 4 March 2002 and he commenced work for the respondent the next day. 16 In early 2003 [NAME_3] had discussions with [NAME_21], a contract driver engaged by the respondent, concerning the purchase of his business. Both of them met with [NAME_18] in early August 2003. [NAME_3] arranged finance to purchase the truck and business from [NAME_21] for $100,000. He insured the truck on 22 August 2003 for $45,000. From 11 August 2003, [NAME_3] underwent training for two weeks. On 18 [NAME_3] signed the standard acknowledgement form. A Contractor Assignment Agreement was signed by [NAME_3] on 18 August (although he claimed he had backdated it from 25 August).

17 On 20 September 2006, [NAME_16] informed the owner drivers that the company would not be renewing its contract with the respondent and invited the drivers to apply for work with it. All of them did so. However, on 10 October 2006 both [NAME_3] and [NAME_2] (and two others) were advised that their [NAME_9] had been unsuccessful. No termination payments were made by the respondent to either [NAME_3] or [NAME_2]. 18 The claims in these proceedings are for the loss of goodwill in the amounts of $55,000 for [NAME_3] and $70,000 for [NAME_2]. THE EVIDENCE 19 We turn now to the evidence adduced in the proceedings. 20 [NAME_3] deposed that when he discussed purchasing [NAME_21]'s business, he had told him that the last two trucks sold in the yard had been for $100,000. [NAME_3] offered [NAME_21] this amount in July 2003 after reviewing the last three years of [NAME_21]'s earnings with the respondent. 21 [NAME_3] said that in a meeting with [NAME_18] and [NAME_21] around 4 August 2003, [NAME_18] had assured him that the work was secure and that [NAME_16] was very happy (with the contract) and had given every indication the relationship would be long term. He said he was also assured that the respondent would always utilise a contractor fleet, and as the workforce was ageing, he expected a renewal of the workforce in the next 12 months. At this meeting they had also discussed uniforms, start times, induction and training. With these assurances, [NAME_3] said that he had felt confident in buying the contract and, although it only had two years to run, he expected it to continue for many years to come. He added that it wouldn't have made sense to pay all that money for a couple of years work. 22 [NAME_3] deposed that at this meeting [NAME_18] had raised the issue of goodwill. [NAME_18] had said that he didn't want to know the price of the purchase, but that he ([NAME_3]) should know that a premium wasn't a requirement of the respondent. When [NAME_3] replied that he'd just go out and buy a truck in that case, [NAME_18] said that he must buy [NAME_21]'s truck, as [NAME_16] was very happy with the existing fleet configuration. [NAME_3] deposed that [NAME_21] appeared unhappy at that point in the meeting, as it appeared momentarily he might lose the $55,000 of goodwill. 23 [NAME_3] financed the purchase by two loans - one from [NAME_22] of $45,000 for the truck and a business loan of $55,000 from [NAME_22]. As [NAME_21] owed $30,955.61 to [NAME_22] for the truck, [NAME_3] transferred this amount to [NAME_22] and the balance to [NAME_21]'s bank account. 24 Around 18 August 2003, [NAME_18] called [NAME_3] and told him he would have to preload overnight if he wanted to work in the yard. As a result, [NAME_3] purchased a car for $3,000 and was paid an extra four hours per week for preloading. 25 [NAME_3] said he first became aware of two company documents concerning "prospective purchases" and "procedures for the sale of a truck" after the commencement of these proceedings. Both documents were issued in March 2002 and were designed to recognise the acknowledgement that the respondent did not require a premium to be paid. The procedures document was expressed as follows:

1) Contractor commences private negotiations with interested party ("Buyer") ensuring that the buyer is immediately made aware that [NAME_4] does not require a premium or fee to be paid in order to enter a Driver Agreement to either [NAME_4] or the Contractor and in fact, insists that such a fee, often referred to as "Goodwill", is specifically excluded from the Truck Sale and Driver Agreement Assignment negotiations from the outset.

2) Contractor advises [NAME_4] Manager ("Contract Manager") of likelihood of possible Truck Sale and Assignment of Driver Agreement.

3) Contractor to ensure that the potential Buyer / Buyer's Drivers, holds the appropriate Truck Licence, is well presented, has recent relevant driving experience, is fully aware of their obligations under the Driver Agreement and has prepared a brief resume that includes at least the names of two character references, with at least one of these references being willing to attest to the Buyer's / Buyer's drivers, abilities, attitude and experience as a driver.

4) Contractor negotiates meeting time for attendance by potential Buyer, the Contractor and the Contract Manager and if available, a Fleet Scheduler, in order to further assess the buyer's interest and for the Contract Manager to give the Buyer a briefing on [NAME_4] and the [NAME_16], current industry conditions and advise the Buyer to obtain professional advise (sic) in relation to the requirements of the Driver Agreement. Key points of the Driver Agreement will also be highlighted at this time.

5) Contract Manager then assesses the Buyer's situation, checks references and reverts back to the Contractor with feedback. If positive, Contract Manager approves further negotiations, if negative, Contract Manager advises Contractor with detailed and relevant reasons as to why the application is rejected.

6) Assuming positive response to item 5), Contractor then privately negotiates further with the Buyer and if the Buyer expresses firm commitment, then asks the Buyer to write an "Expression of Commitment" to the purchase, addressed to the Contract Manager.

7) Contractor to then commence 14 trial / training period personally with Buyer, immediately after which the Buyer will be expected to be fully conversant with all Operational and Legal / Licensing responsibilities required to operate self sufficiently within the Fleet and fulfill looming obligations under the Driver Agreement.

8) Contractor and the Fleet Schedulers to review the results of the trial / training period and revert back to the Contractor with any issues requiring attention.

9) Assuming the success of items 7) and 8), Contract Manager then, upon request from the Contractor, issues a copy of the Driver Agreement and a standard "Acknowledgment Form" in relation to "no premium, fee or goodwill" (see copy attached) to the Buyer, with both documents required to be fully completed and signed before the Buyer commences providing services to [NAME_4], with these completed documents to be provided to the Contract Manager. 26 [NAME_3] said that in his case the procedures had not been followed in that the acknowledgement form was not provided at the initial meeting with management. 27 [NAME_3] said that when he attended the meeting with [NAME_16] on 20 September 2006, [NAME_23], Operations Manager, had told the drivers that [NAME_16] would take some, but not all the drivers on a new contract. [NAME_23] had also said that any drivers not taken on by [NAME_16] would be "looked after by [NAME_4]". [NAME_3] said that the respondent did not consult with the drivers or discuss with them the effect of losing the contract. He finished working for the respondent on 20 October 2006. 28 [NAME_3] has since worked with [NAME_24], [NAME_24] and [NAME_24] as a contract carrier earning about $750 per week. 29 In a reply statement, [NAME_3] said that he may have received the acknowledgement form from [NAME_21], not from [NAME_18]. He had signed the form and handed it in on 25 August 2003, when he commenced paid work, but had backdated it to the 18 August. He could give no explanation why he did so. 30 [NAME_3] said that he was unaware of the arrangements between the respondent and [NAME_16], as [NAME_16] was particularly protective about the details of the contract. 31 [NAME_3] recorded the details of a conversation he had with [NAME_4] when he learnt that he was unsuccessful in his application to [NAME_16]. [NAME_4] had offered him work as a company driver on a contract with [NAME_4], but [NAME_3] wasn't in a position, financially, to accept. In addition, [NAME_3] said he didn't trust the respondent and he decided to seek work elsewhere. 32 In cross-examination, [NAME_3] agreed that [NAME_21] had given him a copy of his own contract with the respondent in July 2003. He understood that the contract was for five years from October 2001 and that there was no assurance it would be renewed. He understood further that either party could terminate the contract on one month's notice and that the respondent could terminate the contract due to a 'fundamental change'. They had in fact discussed this at the meeting with [NAME_18]. 33 [NAME_3] also understood that [NAME_21] couldn't assign his contract without the respondent's approval. He knew that [NAME_21] had only been with the respondent since 2001, having been earlier employed by [NAME_16] for some 15 years. [NAME_3] understood from [NAME_21] that when he had joined the respondent he had been offered to be engaged as a contractor or an employee. All the drivers had come over as contractors without paying any goodwill. 34 [NAME_3] said he had not been provided with a document setting out the procedure for the assignment of a truck. [NAME_21] had given him an acknowledgement form after he had started training and had left his previous job. He had started paid work on 25 August 2003, the same day he had signed the acknowledgement form. He hadn't signed it on the 18 August because [NAME_21] had signed it on the 22 August and handed it back to him. 35 [NAME_3] deposed that in his meeting with [NAME_18] there had been no mention of an expiry date of the [NAME_16] contract. Rather, [NAME_18] had said that [NAME_16] was very happy with the arrangement, expected it to continue and would be looking to build its business in Sydney. [NAME_3] said he had an expectation the contract would continue after October 2006. 36 [NAME_3] was closely questioned on when he had signed the acknowledgment form. He denied signing it on 18 August 2003, but agreed he understood its terms as to "no custom and practice of goodwill at the yard". However, he believed it was just a procedure. [NAME_3] acknowledged that [NAME_18] had earlier said that the respondent did not require a premium to be paid but he hadn't used the words "custom and practice". [NAME_3] said that he didn't really know what the respondent did or didn't do, but he conceded he understood the respondent didn't require a premium to be paid. 37 [NAME_3] agreed that he had obtained legal and accounting advice prior to the purchase and had taken [NAME_21]'s contract to a solicitor. He had arranged finance with the bank on 19 or 20 August 2003, and obtained insurance for the vehicle on 22 August. He again denied signing the agreement with the respondent on 18 August. The first payment to [NAME_21] was 27 August and the balance was paid on 21 September 2003. 38 As to the meeting at which the drivers were told the respondent had lost the [NAME_16] contract, [NAME_3] agreed that [NAME_4] had said it wasn't a reflection on the company or the drivers. [NAME_16] wanted to in-source the work. [NAME_4] had said the respondent was very disappointed. [NAME_3] further agreed that [NAME_4] had said that if any driver missed out with [NAME_16] they should give him a call and he would see what they could do. [NAME_4] had also said he expected all the drivers to fulfil their contracts to 22 October 2006. [NAME_3] denied rejecting [NAME_4]'s offer to work as an employee driver. He simply hadn't responded to it as he wasn't in a financial position to do so. 39 [NAME_3] agreed that the respondent had paid to have his truck repainted when his contract ended and arranged for a week's work for him while this was done. 40 In re-examination, [NAME_3] said that in the meeting with [NAME_18] he had asked him about the 'fundamental change' clause in the agreement and the provision concerning reconfiguring the fleet. [NAME_18] had assured him that [NAME_16] was very happy with the fleet configuration, and he didn't see any change in the foreseeable future. 41 [NAME_3] confirmed that there was no other way of entering the yard than by paying a fee or premium to an exiting driver. 42 [NAME_2] is presently an employee driver with [COMPANY_25]. [NAME_2] said that when he bought into the yard in February 2003, [NAME_19] had told him that he bought his truck four years earlier from a [NAME_20] for $125,000. [NAME_19] had told him that the only way to get into the yard was to buy a run for goodwill. He later visited the yard and other drivers had told him the same thing. Some of the drivers had been there for 15 years. [NAME_2] believed, as a result of these conversations, that it was the practice in the yard to pay goodwill, and only four of the longest serving drivers hadn't payed goodwill to get in. 43 [NAME_2] said that [NAME_19] had spoken to [NAME_18] and he had approved him purchasing [NAME_19]'s truck. [NAME_2] had paid a 10% deposit to [NAME_19] before meeting [NAME_18] because he believed he had already been approved and the meeting was only a formality. [NAME_2] met with [NAME_18] around 15 February 2002, and [NAME_18] told him that he needed to be trained. He said that [NAME_16] was "very happy with us" ([NAME_4]) and there was no reason why they wouldn't keep doing [NAME_16] work for many years to come. [NAME_2] believed the work sounded secure and the contract would be ongoing. He said he wouldn't have paid all that money if he thought the contract would end after its nominal term. 44 [NAME_2] said that during the meeting on 15 February 2002, [NAME_18] had asked [NAME_19] how much he was selling for. When [NAME_19] told him, [NAME_18] replied "that's between the two of you, its not my business". Despite signing the minutes of the meeting, [NAME_2] said he had no recollection of [NAME_18] explaining to him that no premium should be paid in the transaction. 45 After commencing training on 19 February 2002, [NAME_2] said that on 26 [NAME_18] gave him the acknowledgement form which stated the Company didn't recognise goodwill. [NAME_18] didn't suggest he obtain legal or other advice and he just signed it on the spot. He claimed he was uncertain about it, but he had already arranged finance, paid a deposit and needed to start work. He commenced on 5 March. [NAME_2] said that after he started work, other drivers had asked him if he knew of anyone who wanted to buy in. His brother-in-law paid $100,000 for [NAME_26] truck and business. [NAME_3] and [NAME_26] had also bought into the yard for around $100,000. 46 [NAME_2] said that some time in 2003, [NAME_18] asked him to put a tautliner on his truck in order to preload. This had cost $3,000. [NAME_2] said that he was forced to buy a car for $5,000 and the respondent paid one hour per day extra for preloading. 47 [NAME_2] recorded the circumstances when the respondent lost the [NAME_16] contract. [NAME_2] did not secure work with [NAME_16] and did not secure work for a couple of weeks until joining [NAME_25] on 16 November 2006. He sold the truck for $15,000 and still owes the bank almost $100,000. He said he had earned around $1,200 per week nett after costs with the respondent and he now earns an average$920 per week. 48 In a statement in reply [NAME_2] said he did not sign the acknowledgement form on 18 February 2002, but on 26 February. 49 In response to [NAME_4]'s statement about offering work to the displaced drivers, [NAME_2] said the offer was not specific; there was no explanation of what the work would be, nor the rates. In any case, [NAME_2] was aware there wasn't much work at [NAME_27] and the drivers there were on lower rates. 50 In cross-examination, [NAME_2] said he first saw [NAME_19]'s contract with the respondent when he met [NAME_18] on 18 February 2002. However, [NAME_2] had asked [NAME_19] earlier about the terms of the contract and that they had only discussed termination of the contract where the driver may have "done the wrong thing". [NAME_19] had told him the contract had been renewed over 20 years and that he had joined the respondent when [NAME_16] commenced in 2001. He didn't tell him that, at the time, he was offered either to be a contractor or an employee driver. He had told him he had paid goodwill four years earlier when he ([NAME_19]) had bought the truck from [NAME_20]. 51 [NAME_2] couldn't recall exactly when [NAME_18] had given him the acknowledgement form, but he believed it was in the second week of his training. He said he hadn't seen a copy before this time. 52 [NAME_2] said he had accepted [NAME_19]'s estimate of the truck value of $50,00 and had paid a 10% deposit on 10 February 2002, after being assured by [NAME_19] that [NAME_18] had approved the sale. [NAME_2] accepted he hadn't spoken to anyone in management before paying the deposit. 53 [NAME_2] agreed he had met [NAME_18] with [NAME_19] and [NAME_28], also from the respondent, on 18 February 2002, and the purpose of the meeting was to determine if he was a suitable person to take over [NAME_19]'s run. 54 [NAME_18] spoke to all of [NAME_2]'s referees, he was told that he was approved as a purchaser of the truck. [NAME_2] said he would become incorporated and would have all the necessary insurances and registration in place by 31 March 2002. 55 [NAME_18] had given him a driver's agreement and advised him to seek independent legal and accounting advice. [NAME_2] saw his accountant with [NAME_19]'s last three years financial accounts, but did not seek legal advice. [NAME_2] recalled that [NAME_18] spoke about the good relationship with [NAME_16] and why he expected the contract to continue.

56 [NAME_2] could not remember if [NAME_18] had a copy of the acknowledgement form at the meeting. He found out about it from the other drivers after the meeting. When pressed in cross-examination, he thought he may have received it on the same day as the meeting and [NAME_18] had said to him that he had to sign the form to confirm he understood no goodwill should be included in the sale. 57 [NAME_2] said he thought he had received the minutes of the meeting shortly after he started his training. [NAME_2] couldn't say why he used the words "appeared to be his signature" (on the minutes) in his statement. The minutes do not record reference to an exchange about the sale price. However, [NAME_2] insisted the discussion had occurred. 58 [NAME_2] said he had signed the acknowledgement form on 26 February 2002 with [NAME_20] as a witness. [NAME_20] had told him he had to sign it or he would not be starting in the yard. He had read it and understood it, but felt he had to sign it or he wouldn't be working. At the time he signed it, he understood that the company had said there was no custom and practice of premiums being paid in the yard. 59 [NAME_2] was shown the contract he had signed which disclosed a contract term of five years commencing in October 2001. He agreed he had read and understood the provision relating to a 'fundamental change' which might terminate the contract. He had read and understood no compensation would be paid for the contract's termination on one month's notice. 60 [NAME_2] agreed that at the meeting on 20 October 2006 announcing the termination of the [NAME_16] contract, [NAME_4] had said that: · [NAME_16]'s decision was not a reflection on anyone's performance; · [NAME_16] wished to in-source its work; · he was very disappointed; · he would be pleased to meet with any displaced drivers with a view to offering ongoing work with [NAME_4]; and · he appreciated the drivers' efforts and hoped they would maintain the standard to the end. 61 [NAME_2] acknowledged that when he was refused work with [NAME_16] he did not make any contact with the respondent about alternative work. 62 [NAME_2] could not give details of his actual earnings with the respondent as it varied from week to week according to various costs. 63 In re-examination, [NAME_2] said he did not know at the time he signed the acknowledgement form that he could get work with the respondent without paying a premium. 64 [NAME_29] is an owner driver engaged under a contract with [NAME_16]. He has 18 years' experience in the [NAME_10] and was engaged by [NAME_16] prior to 2001 and subsequently by the respondent when it won the contract in 2001. In order to maintain good customer relationships between [NAME_16] and the drivers, all the then drivers had been offered contracts with the respondent using their own trucks or alternatively employed as company drivers. During the negotiations in 2001 the drivers established a negotiating committee and engaged the services of an industrial relations consultant. 65 [NAME_30] said that one of the issues discussed at the time was recognition of goodwill. He said that while he hadn't paid goodwill (because he had been in the yard from the beginning), all of the drivers who later came into the yard paid goodwill, including four or five drivers who came in after the respondent took over the contract. He had in fact sold his truck and business for $110,000 to [NAME_26] in 2003. [NAME_30] said the prices for such sales were well known in the yard as the drivers were always interested to know what they would get for their trucks. 66 [NAME_30] deposed that during the 2001 negotiations, agreement was eventually reached with the respondent for a clause (cl 8) allowing assignment of contracts, subject to company approval. The terms of that clause were: During the term of this Agreement, the Contractor shall not assign, subcontract, transfer, mortgage, charge or encumber all or any part of its rights, benefits or obligations under this Agreement, nor transfer ownership of the Delivery Vehicle, without the prior written permission of [NAME_4]. 67 In cross-examination, [NAME_30] was asked if a copy of the acknowledgement form had been left in his pigeonhole in early 2002. He claimed he couldn't remember and wasn't sure if such a document was required to be signed by new drivers entering the yard. However, [NAME_30] said that he had received a memorandum from the respondent in March 2002 and understood that it did not require a premium or fee to enter the yard. 68 [NAME_30] remembered the meeting with [NAME_16] in September 2006 when the drivers were advised to apply for positions back with the company. [NAME_30] had applied and had been successful with a further five year contract. He agreed [NAME_4] had said at the meeting that unsuccessful drivers should talk to him about alternative work with [NAME_4]. 69 As a member of the Driver Committee, [NAME_30] recalled a meeting in August / September 2006 when [NAME_4] had said that the [NAME_16] contract was due to expire and that the parties were negotiating a renewal, but the outcome was unknown. 70 In re-examination, [NAME_30] said that he could think of no other way a driver could enter the yard during the [NAME_16] contract without paying a fee or premium. 71 [NAME_20] commenced driving in the paper industry in 1990 with [NAME_25]. He bought a truck and work for $55,000, $21,000 of which represented goodwill. The company was bought by [NAME_4] and it eventually merged its warehousing operations into the company [NAME_16]. 72 [NAME_20] said there was no formal contract when he started work, but he later signed contracts in 1994 and 1997. He gave similar evidence to [NAME_30] as to what occurred in 2001. He said that at the time, goodwill had always been paid to get into the yard and the drivers wanted to protect it if they sold during the respondent's contract. All drivers who bought in after the respondent's contract had paid goodwill. Everyone knew how much drivers were paying as the drivers always talked about it. 73 [NAME_20] referred to the 2006 negotiations with the respondent. The drivers assumed they would continue to work under the existing contract. [NAME_20] secured a position back with [NAME_16] in 2006 with a six tonne truck which is now 10 years old. 74 In oral evidence, [NAME_20] deposed that [NAME_18] had regularly mentioned that the respondent was not necessarily against the drivers selling their trucks with work, but it didn't want to get involved with price. 75 In cross-examination, [NAME_20] agreed that he had not paid any goodwill when he started with the respondent. [NAME_20] agreed that he had received the respondent's memorandum or a version of it in early 2002, but could not recall the acknowledgment form. [NAME_20] was shown [NAME_2]'s signed form which he had witnessed. He said that [NAME_2] had signed it because otherwise he wouldn't get a job in the yard. 76 [NAME_31] started work with [NAME_16] in 1994 when he paid $75,000 for a truck and work. The truck was worth about $35,000. 77 [NAME_33] gave similar evidence to [NAME_30] concerning the move to the respondent in 2001. At the time, he said, the respondent did not want to recognise goodwill and while the issue wasn't completely resolved the drivers maintained the right to assign their contracts, subject to approval, and there was no specific prohibition on goodwill. In any event, the practice in the yard after 2001 was that any new driver paid goodwill. It was a matter of interest to the drivers and common knowledge of the amounts which were paid. 78 In cross-examination, [NAME_33] said that he had received and read the memorandum from the respondent in March 2002, and recalled seeing the acknowledgment form. 79 [NAME_33] referred to the meeting in October 2006 when the drivers were invited to apply for work back at [NAME_16]. He had done so and was successful. He now owns a 1991, five tonne truck. 80 [NAME_34] is the [NAME_35] responsible for the owner drivers previously engaged by the respondent. [NAME_36] gave evidence concerning a dispute with the respondent in 2004 over a reduction in work being offered by [NAME_16]. The respondent had attempted to force two or three drivers to move permanently to its [NAME_27] depot. The dispute resulted in a rotating of [NAME_16] drivers to [NAME_27]. However, [NAME_36] understood that there was very little work at [NAME_27] and drivers would often be instructed not to come in at all. [NAME_36] believed that there was no indication that the respondent could offer viable work to the displaced [NAME_16] drivers. 81 [NAME_36] said that throughout his numerous discussions with the respondent's management over a variety of topics, no mention of the contract's expiry had been made until late in 2006. Further, [NAME_36] said he and the drivers were not privy to the contractual terms between the respondent and [NAME_16]. 82 In response to [NAME_37]' evidence, [NAME_36] said it was his impression that the offer of alternative work for displaced drivers was a token gesture made without any reference to the nature of the work or the rates to be paid. 83 In cross-examination, [NAME_36] recalled that [NAME_4] had mentioned in meetings in August / September 2006 that the respondent was negotiating a renewal of the contract with [NAME_16] and that the outcome was unknown. [NAME_36] agreed that in the meeting on 20 September 2006, [NAME_4] had said : · he was very disappointed; · the drivers could apply to be engaged by [NAME_16]; · that any driver unsuccessful in applying could talk to him about being engaged by the respondent on other work; and · he appreciated the work of the drivers. 84 [NAME_36] conceded that he had not approached [NAME_4] or anyone else about alternative work for [NAME_3] and [NAME_2]. Respondent's Evidence 85 [NAME_38] is currently a self-employed consultant in the transport and logistics industry with 20 years experience. From June 2001 to January 2004 he was employed by the respondent as the Transport Manager at the [NAME_39]. This role included being responsible for managing and administering the contractual relationship with [NAME_16]. [NAME_18] was also responsible for negotiating the contractor agreements for the drivers who came across from [NAME_16] to the respondent in 2001. It was his understanding that none of these contractor agreements provided for the payment of goodwill by the respondent or anyone else. 86 [NAME_18] said that the acknowledgement form had been prepared in early February 2002 and in early March 2002 he had prepared a procedures document for the sale of a truck and assignment of a driver's agreement. Both documents were left in each driver's pigeonhole in March 2002. This was the normal practice for distributing information in the yard. [NAME_18] deposed that in early 2002 when he became aware that [NAME_19] was intending to sell his truck to [NAME_2], he had placed the necessary documents in [NAME_19]'s pigeonhole. 87 On 18 February 2002, he met with [NAME_40], [NAME_2], [NAME_28] and [NAME_42] (an employee of [NAME_16]). Minutes were prepared which were signed by those present. [NAME_18] said that he had told [NAME_2] that he would have to sign the acknowledgement form confirming his understanding that no goodwill should be included in the purchase. At the same meeting he provided [NAME_2] with the standard contractor agreement. [NAME_18] deposed that [NAME_2] handed him the signed acknowledgement form a few days later. On 4 March 2002 [COMPANY_2] entered into a fixed term contractor agreement with the respondent. [NAME_2] had undertaken normal training prior to this time. 88 [NAME_18] deposed that, at no time prior to the commencement of these proceedings was he aware of the negotiations for the agreement between [NAME_2] and [NAME_19] of the price [NAME_2] paid for the truck. 89 [NAME_18] said that in late July 2003, [NAME_21] had approached him about selling his truck to [NAME_3]. He told [NAME_21] that the procedures should be followed and that he would be happy to meet the new driver and assess his suitability. [NAME_18] provided [NAME_21] with a copy of the procedures and [NAME_21] provided him with a number of documents from [NAME_3]. At the meeting with [NAME_3], [NAME_21] and [NAME_43], [NAME_18] said he told them "Guys, no goodwill factor should be included in these private commercial transactions covering the truck sale". Shortly after the meeting [NAME_18] put the necessary documentation in [NAME_21]'s pigeonhole and within a few days [NAME_3] handed them back. [NAME_3] undertook two weeks training before commencing work. 90 [NAME_18] deposed that prior to the commencement of these proceedings, he had not known of the details of the negotiations and agreement between [NAME_3] and [NAME_21] and had not known the sale price of the truck. 91 [NAME_18] responded to [NAME_3]'s statement by deposing that in the first meeting with him he had said: [NAME_16] are very happy with us. We hope to continue with [NAME_16] in the long term, however, you need to know there is an expiry date to our agreement with [NAME_16]. Any driver agreement you sign with us will also have a fixed expiry date. We cannot guarantee ongoing work past that expiry. 92 [NAME_18] denied making any observations in relation to [NAME_3]'s purchase of the truck. He had simply said "[NAME_4] does not require goodwill to be paid and it should not be paid". 93 In reply to [NAME_2]'s statement, [NAME_18] said it had not been his practice to approve a contract driver instantaneously. He confirmed that he had no knowledge of the transaction between [NAME_19] and [NAME_2]. [NAME_18] denied making any representations about the respondent's [NAME_16] contract or giving any guarantees to [NAME_2] about ongoing work. [NAME_18] said he had placed the necessary documents in [NAME_19]'s pigeonhole in early February 2002 and that [NAME_2] returned the acknowledgement form at the meeting on 18 February 2002. 94 In reply to [NAME_20]'s statement, [NAME_18] reiterated that as the Transport Manager at the [NAME_39], he did not know the price contract drivers were paying for their trucks. 95 In cross-examination, [NAME_18] said that when he commenced employment with the respondent, the Company had just won the contract for [NAME_16] in Sydney. It already had a similar contract in Melbourne. [NAME_18] said he had never been privy to the detail of these contracts. Nevertheless, [NAME_18] agreed that he had been a party to discussions with the drivers when they moved from [NAME_16] to the respondent in 2001. He insisted that the drivers had not put that they wanted the system of goodwill to continue at [NAME_4]. At this time, he took the view that goodwill was irrelevant considering the long term nature of the proposed agreement. [NAME_18] conceded that he had not replied to [NAME_30]'s affidavit in which he had said that the drivers wanted to ensure that goodwill was recognised. He later accepted that the drivers did raise the issue in the initial negotiations. However, [NAME_18] denied that cl 8 of the agreement resolved the issue of goodwill in the negotiations. He accepted that cl 8 was about the assignment of one driver's rights under the contract to another. 96 [NAME_18] said that the documents he had prepared in 2002 were introduced later to clarify the procedures involved in assigning contracts and had been prepared following a request from the drivers themselves. They were issued and accepted. He agreed they were not negotiated. [NAME_18] said that the wording in the acknowledgement form had been proposed by the respondent's legal advisers. 97 [NAME_18] accepted that at the time [NAME_2] entered the yard the procedures document had not existed. [NAME_18] was referred to the minutes of the meeting with [NAME_2] on 18 February 2002. He accepted that the minutes do not record that the respondent's position on custom and practice as to goodwill had been explained to him. However, [NAME_2] could not get into the yard without signing the acknowledgement form which had indicated that the custom and practice as to goodwill had been explained to him. [NAME_18] conceded that it hadn't been explained to him. 98 [NAME_18] denied saying at the meeting that there was no reason why they (the respondent) wouldn't be doing [NAME_16] work for many years. He also denied asking [NAME_19] how much he was selling his truck for. He had said that the [NAME_16] contract had an expiry date, although the minutes [NAME_4]'t record this statement. 99 [NAME_18] deposed that he did explain to [NAME_2] that the respondent did not require a fee or premium to be paid. He conceded that the acknowledgement form was concerned with drivers entering into a driver contract, not directly with the sale of a truck. [NAME_18] said that he believed he gave [NAME_2] the acknowledgement form on or around 26 February 2002, and he signed it and gave it back on the same day. 100 [NAME_18] denied making an agreement with [NAME_19] that he could sell his truck for whatever price, so long as he did not make a claim for an injury he had earlier suffered. He further denied any conversation with [NAME_44] about [NAME_19]'s injury. 101 [NAME_18] was questioned about [NAME_3]'s entry into the yard. [NAME_18] believed there had been an informal meeting in July 2003 and a formal meeting sometime later. However, there was no record of the formal meeting and he couldn't recall what had been said. [NAME_18] had requested the minutes of the meeting through the respondent's solicitor, but none had been provided. 102 [NAME_18] said that [NAME_3] was required to sign the acknowledgement form before he would be taken on as an owner driver for the respondent. The issue of goodwill had been explained to [NAME_3], but the reference to custom and practice was not mentioned in [NAME_18]'s account of the conversation. [NAME_18] wasn't sure if this conversation was at the informal or the formal meeting. 103 [NAME_18] denied telling [NAME_3] that the [NAME_16] contract would very likely continue and denied saying that he didn't want to know the price or the details of the truck transaction. He did say however, that the respondent did not require a premium to be paid. He also denied telling [NAME_3] that he would have to buy [NAME_21]'s truck. 104 [NAME_45] has been the State Manager of [NAME_6] since 1999. He has worked in the transport and logistics industry for 17 years and has senior management responsibility for the respondent in New South Wales. It was [NAME_4]'s evidence that goodwill was nowhere near as prevalent in the industry as it once was. 105 It was [NAME_4]'s understanding that the procedures in place for the sale of trucks prior to 2002 were the same as those which [NAME_18] introduced. [NAME_4] said he personally prepares all driver assignment agreements, contractor agreements and acknowledgement forms. He said it is a strict practice that all drivers must sign the acknowledgement form before commencing engagement with the respondent. [NAME_4] deposed that the respondent had never incorporated goodwill in its contractor agreements and he was not aware of any driver paying goodwill or a premium when entering the yard. He said that it was never a requirement or practice of the respondent that such a payment be made or requested. 106 [NAME_4] traced the history of the respondent securing the [NAME_16] contract in New South Wales and attached the contract to his affidavit. [NAME_4] said that when he became State Manager there were 19 drivers engaged on the [NAME_16] contract and another 20 drivers working on other contracts for the respondent. 107 [NAME_4] said he became aware of [NAME_16]'s decision not to continue the contract with the respondent around 18 September 2006. He immediately contacted [NAME_36] of the Union and [NAME_3] of the [NAME_47] to organise a meeting of all the drivers. [NAME_4] deposed to the following conversation he had at the meeting on 20 September 2006: "We have received advice from [NAME_16] that they have chosen not to renew our contracts effective from 20 October 2006. The decision by [NAME_16] was not a reflection of the performance of the contract, but my understanding is that it is a national decision by [NAME_16] to in-source the majority of their transport operations. We are very disappointed. My understanding is that [NAME_16] will seek to engage a number of the current contractors to perform services directly to [NAME_16], [NAME_48], Regional Logistics Manager at [NAME_16] will discuss those opportunities with you separately. If any contractors are displaced as a result of the process, we would be pleased to meet with you, with a view to performing ongoing services to [COMPANY_49] and you should discuss that with me personally. We appreciate your efforts over the course of the contract to date and would also appreciate you maintaining that standard, despite the disappointment until the termination date." 108 In the following four weeks, [NAME_4] attended the yard on around seven or eight occasions. He said he had received no inquiries from any driver about alternative work with the respondent. [NAME_4] said that the respondent was not involved in the selection of drivers by [NAME_16]. He had understood 13 drivers were engaged and four were not. [NAME_4] said the respondent had intended to offer work to any driver not taken on by [NAME_16]. However, no driver had approached him. 109 [NAME_4] said that the respondent had paid to restore [NAME_3]'s truck to its neutral state and while the work was done in the week of 23 October 2006, [NAME_3] was provided with another company truck so that he would not lose any income. 110 [NAME_4] responded to [NAME_3]'s evidence by stating that when a new driver entered the yard the usual practice was for the driver to undertake two weeks training before commencing contract work for the respondent. [NAME_4] denied that the procedures were inconsistent. He said they were designed to ensure that a new owner driver is aware that a fee or premium is not a requirement and the acknowledgement form was required to be signed prior to commencing work. 111 [NAME_4] said that notwithstanding the 'fundamental change' clause in the contractor's agreement, the agreement had a nominal expiry date of 1 October 2006. 112 [NAME_4] rejected [NAME_2]'s claim that the respondent did not talk to, or consult with the drivers about the loss of the [NAME_16] contract. None of the drivers approached him about alternative work. 113 [NAME_4] responded to [NAME_20]'s statement and said that when the [NAME_16] contract was won, the drivers were given the option of becoming employee drivers of the respondent or being engaged as contractors. They all undertook the latter. [NAME_4] again insisted that he did not know the price that the contractors were paying for their trucks and the price was never discussed with him. 114 [NAME_4] said that he had meetings with the [NAME_47] on 9 and 24 August and 7 September 2006 where he told the drivers that the [NAME_16] contract was due to expire and negotiations were being undertaken about renewal. The purpose of these meetings was to commence discussions about the terms of a new contract with the drivers. While at each meeting the drivers asked about progress of the negotiations with [NAME_16], he could not provide any information. [NAME_4] maintained that the respondent had never given the drivers the impression the contract was ongoing. In response to [NAME_33]'s and [NAME_30]'s statements, [NAME_4] said that the respondent has never been involved in the sale or purchase of a truck and, prior to these proceedings, he had never known the price contractors had paid for their trucks. 115 In cross-examination, [NAME_4] said that the procedures at the [NAME_39] were consistent with the procedures adopted throughout the respondent's business. [NAME_4] conceded that the contractors' agreement for the [NAME_16] contract was different to the standard contract, in so far as cl 8 was concerned. That provision gives a driver the right to assign the contract to someone else without restriction of price. [NAME_4] accepted that assigning a five year contract for the balance of the contract had a potential commercial value. He agreed that the clause did not prohibit the driver assigning the contract from charging whatever he liked.

116 [NAME_4] said that from his knowledge, the drivers had been made aware that the [NAME_16] contract was to expire in October 2006. [NAME_4] agreed that no firm offer of re-employment for actual vacancies had been put to any displaced driver. However, the offer was conveyed in a letter and at the 20 September meeting, for work in the general fleet operating mainly out of [NAME_27]. He again said that no one had approached him. [NAME_4] added that he had no knowledge and had made no inquiries as to why some drivers were taken on by [NAME_16] and others were not. 117 [NAME_4] had no recollection of a 2005 conversation with [NAME_3] in which he ([NAME_4]) had asked if any driver was interested in selling his truck. He denied being told by [NAME_3] that "[NAME_50] was looking for $70 - 100,000 and [NAME_26] wanted $100,000".

118 In re-examination, [NAME_4] said that in 2003/4 the respondent's revenue was $1.5 million and had since grown in the last financial year to $6.8 million. 119 [NAME_3] was recalled to clarify when he had the first meeting (and only meeting) with [NAME_18]. It was a formal meeting in the week before he started training. He understood no notes were taken at the meeting.

SUBMISSIONS For the applicants 120 [NAME_13] addressed the five jurisdictional prerequisites required by s 346(1) of the Act. The first two (a) and (b) were not in contest. As to the third concerning the custom and practice of a premium or fee being paid, the evidence disclosed, notwithstanding the respondent denying any knowledge of a custom and practice, that at least eight transactions had involved the payment of goodwill. [NAME_30] had deposed that, apart from the original owner drivers 20 years ago, every transaction in the yard since had involved goodwill. 121 As to the further requirement that the principle contractor knew or ought reasonably to have known a premium or fee had been paid, the evidence was that the respondent actually did know of the practice. The evidence was that the issue of goodwill was a significant issue when the drivers came over from [NAME_16] to the respondent in 2001. The drivers wanted to protect their goodwill and the negotiations at the time produced cl 8 in the contractor's agreement which permitted the assignment of the contract. [NAME_51] said that [NAME_18]'s evidence on this issue was evasive when he firstly said that goodwill wasn't raised in the negotiations, but later agreed it had been. [NAME_51] said it was incredible for the respondent to argue that cl 8 didn't give the driver an opportunity to assign his contract for value being the balance of the contract and the truck. This is in fact what had occurred. For example, three witnesses gave evidence of informing [NAME_18] that they had paid goodwill: [NAME_2], [NAME_20] and [NAME_3]. [NAME_18] and [NAME_4] denying the conversations, the evidence of [NAME_2], [NAME_20] and [NAME_3] should be preferred to that of [NAME_18] and [NAME_4]. 122 As to the fifth prerequisite in s 346(1) of the Act, concerning whether the principle carrier failed to take reasonable steps to advise the carrier that a premium was not made or required, [NAME_51] submitted that it was not good enough to rely on the acknowledgement form signed by both applicants when in truth there was a requirement for goodwill to be paid: [NAME_11] (1997) 78 IR 38. [NAME_3]'s evidence was that when he told [NAME_18] he would buy a truck independently, [NAME_18] had said that he had to buy from an existing driver. Indeed, [NAME_18] had confirmed there was no other way of getting into the yard. [NAME_51] submitted that whether the drivers were advised of the matter or not, isn't the point. 123 In any event, [NAME_51] said that the acknowledgement forms [NAME_4]'t stand up to scrutiny. [NAME_2] was provided with the form and signed it around 26 February 2002, after he had paid money for the truck. By then it was too late for him to back out. He had not been provided with the form at the meeting on 18 February 2002. Moreover, the minutes of this meeting do not refer to the two matters required to be explained to him; that it was not a requirement to pay a premium and it was not a custom and practice at the yard. [NAME_18] then required [NAME_2] to sign a document acknowledging these two matters had been explained to him. In addition, as [NAME_18] merely saw the form as 'housekeeping', why would [NAME_2] consider the document as important? 124 [NAME_51] submitted that the same situation applied to [NAME_3]. [NAME_18] couldn't even be sure if there was a formal meeting with [NAME_3] and what was said at the meeting. In these circumstances [NAME_3]'s evidence would be preferred. 125 [NAME_51] then dealt with the issue of unfairness. He claimed both applicants were denied any compensation, either by way of goodwill, or severance pay in circumstances where they had a reasonable expectation of ongoing work. [NAME_18] had made such representations. The respondent had not told the applicants that the [NAME_16] contract had a fixed term which expired in October 2006. 126 Another element of unfairness was the knowledge the respondent had that goodwill had been paid. 127 In addition, [NAME_51] put that the respondent made no attempt to ensure that [NAME_16]'s process was fair, objective and transparent. No genuine effort was made by the respondent to find the applicants' alternative work aside from a vague, non-specific offer of general work in the fleet. 128 Finally, as to unfairness, [NAME_51] said that despite a three month notice provision in their contracts, the applicants were only given one month's notice. 129 In respect to compensation, [NAME_51] said that in the case of [NAME_3] he had lost $55,000 premium and [NAME_2] had lost $80,000. [NAME_3] had suffered an ongoing loss and his truck was valued at $45,000 while [NAME_2]'s truck was valued at $50,000. [NAME_51] submitted that the Tribunal might also have regard to the recent decision of the Commission which resulted in a new general redundancy contract determination: [NAME_11]) Contract Determination [2007] [NAME_7] 183. For the respondent 130 [NAME_14] of Counsel opened his submissions by raising three preliminary jurisdictional issues. 131 Firstly, he said that there were no head contracts of carriage between the respondent and the applicants. In this regard [NAME_52] referred to the definition of head contract of carriage in s 345 of the Act: 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. 132 [NAME_52] relied on the word 'exclusively' in the definition to submit that there was no agreement the carriers were to provide services 'exclusively' for the principal contractor. Indeed, it was an express term of each of the contractor agreements that the carrier "may undertake the carriage of goods for or on behalf of any other person other than [NAME_4], provided such carriage does not conflict with the contractors' obligations under this Agreement". Thus, because it was an nonexclusive arrangement the respondent was not, and never had been a party to a head contract of carriage with either applicant: [redacted] 133 Secondly, [NAME_52] submitted that neither applicant was a carrier as defined by s 345 of the Act: carrier means an individual, partnership or body corporate who or which supplies services under contracts of carriage. 134 This proposition arose from the definition of a body corporate in s 309(c) that the person employed to drive the motor vehicle being used to transport goods must be: (c) where the carrier is a body corporate—if no person is, except in the prescribed circumstances, employed (whether pursuant to a contract of employment or not and whether by the body corporate or not) in driving or riding on that or any other motor vehicle or bicycle in the course of that business unless the person is: (i) a director of the body corporate or a member of the family of a director of the body corporate, or (ii) a person who, together with the members of his or her family, has a controlling interest in the body corporate, or (iii) a member of the family of a person who, together with the members of his or her family, has a controlling interest in the body corporate. 135 [NAME_52] said that there was no evidence that the person employed to drive the truck fell into any of the above categories and, consequently neither applicants were 'carriers' as denied. 136 Thirdly, [NAME_52] put that the respondent was not a principal contractor for the purposes of s 346(1). A principle contractor is defined at s 310(1) as:

1) For the purposes of this Chapter, a principal contractor is, subject to this section, the person for whom the carrier under a contract of carriage agrees to transport goods to which the contract relates. 137 It followed that there cannot be a principal contractor unless there is a carrier and a contract of carriage. As it was submitted there were no contracts of carriage, the respondent cannot be a principal contractor in relation to the applicants. The applicants claims should be dismissed on these three jurisdictional grounds. 138 [NAME_52] then referred to the other necessary jurisdictional prerequisites found in s 346(c), (d) and (e) of the Act. 139 [NAME_52] submitted that the establishment of a custom and practice requires something more than an assertion which is contested: See Galea v Amatek (1996) 86 IR 455. Custom and practice means an established practice or unavoidable fact: See Truckbug Pty Ltd v Blue Circle Southern Cement Ltd [2001] [NAME_7] 88. 140 [NAME_52] said that the focus of the Tribunal must not be on whether premiums were paid prior to October 2001 involving [NAME_16], but whether it was a custom and practice of the respondent's business. [NAME_4]'s evidence was that there was no custom and practice in the paper section of the [NAME_10]. One example of [NAME_3] paying a premium to [NAME_21] in August 2003 was insufficient to establish a custom and practice. Moreover, hearsay evidence of what other drivers were said to have been paid for their trucks should be given little or no weight. 141 As to subparagraph (d) relating to the knowledge of the respondent as to whether a fee or premium had been paid, [NAME_18], who presented as an honest and reliable witness, gave sworn evidence that he did not know the price paid by the applicants or whether a premium or fee had been paid. His evidence should be preferred to that of the applicants. 142 [NAME_52] put that the Tribunal would not find that the respondent ought to have known of a premium being paid because:

a) the respondent had told the applicants the company did not recognise goodwill and excluded it from the contractors' agreements;

b) there was no historic or other reason why the respondent ought to have been aware a premium had been paid by the applicants; and

c) the respondent was entitled to believe that [NAME_3] and [NAME_2] were telling the truth when they signed acknowledgement forms. 143 [NAME_52] in describing subpar (e) as an 'escape' mechanism said it must be shown that either: (a) the principal contractor failed to take reasonable steps to relevantly advise the carrier concerning the payment of a premium; or

(b) the principal contractor did not have a requirement against a premium being made or requested. The requirement of a principal contractor against the payment must be genuinely held rather than its desired or preferred position. 144 [NAME_52] submitted that the acknowledgement forms were an express recognition that the respondent had a genuinely held requirement that no premium be made or requested before a driver commenced work. The respondent took active steps to ensure [NAME_3] and [NAME_2] signed the acknowledgement form prior to commencing work. There were other reasonable steps taken by the respondent to advise, both orally and in writing, that it did not require a premium or fee to be paid. [NAME_3] and [NAME_2] both confirmed that they had been told this by [NAME_18]. 145 [NAME_52] detailed the steps taken by the respondent to advise [NAME_2] that it was not a requirement that a premium be paid or requested.

a) [NAME_53] told the contract drivers in 2001 that the respondent did not recognise goodwill and it was excluded from the negotiations;

b) Each of the contractor agreements signed by the drivers in late 2001 do not state that goodwill is preserved or recognised. Clause 6.1(a) provides that no compensation or damages will be paid in the event of the termination of the contract;

c) [NAME_2] was told by [NAME_18] on 19 February 2002 that he was required to sign an acknowledgement form confirming his understanding that no goodwill should be included in the truck transaction;

d) [NAME_2] first accepted that the form was tabled at the meeting and he received it the same day, but then denied it. [NAME_2]'s denials were not plausible as he later agreed the minutes of the meeting were a true record of what was said at the meeting and that he had signed the minutes;

e) [NAME_2] had time to consider the acknowledgment and take advice in relation to it from 18 February 2002 to when he signed it on 26 February and to when he actually signed his contract agreement on 4 March;

f) [NAME_2] signed the acknowledgement form in the presence of [NAME_20];

g) [NAME_2] accepted that he had read the acknowledgement form before he signed it; and

h) [NAME_2] agreed that it had been explained to him and he understood that it was not a requirement to pay a premium or fee to enter into a driver agreement with the respondent. 146 [NAME_52] said in light of these matters it must be found that the respondent did take reasonable steps to advise [NAME_2] that the payment of a fee or premium was not a requirement of the respondent. 147 [NAME_52] then detailed the steps taken by the respondent to advise [NAME_3] that it was not a requirement that a premium be paid or requested.

c) In March 2002, the respondent provided each driver with the written procedures in relation to the sale of trucks and assignment of contractor agreements. Attached to the procedures was the acknowledgment form. [NAME_21] had received these documents in March 2002;

d) [NAME_3] met [NAME_18] on 4 August 2003 and was told that no goodwill should be included and that the respondent did not require goodwill to be paid. Despite denying this was told to him in his affidavit, [NAME_3] conceded in cross-examination that [NAME_18] had told him;

e) The contractor assignment agreement and the acknowledgement form were both signed by [NAME_3] and dated 18 August 2003. He accepted that he had read both documents. [NAME_3]'s credibility was damaged by the implausible explanation that he had backdated each document having signed them on 25 August 2003;

f) The signing of the document on 18 August 2003 is consistent with the timing of events for securing the bank loans for the transactions and obtaining insurance for the vehicle on 22 August;

g) [NAME_3] was given an opportunity to seek legal and accounting advice in relation to the purchase, and he did so; and

h) [NAME_3] conceded that the respondent had explained to him and he understood that a premium or fee was not a requirement of the respondent. 148 [NAME_52] said these matters demonstrated that the respondent had taken reasonable steps to advise [NAME_3] it was not a requirement for a fee or premium to be paid. 149 [NAME_52] submitted that in the event of all the jurisdictional hurdles being overcome by the applicants, the termination of the head contacts of carriage were not unfair, harsh or unconscionable for the following reasons: (a) The contractors were given no assurance in relation to the availability of work beyond the term of the [NAME_16] contract or the term of the contractor agreement, both of which expired in October 2006; (b) No representations, whether express or implied, were made by or on behalf of the Respondent that goodwill would be recognised or paid. In fact, the Respondent expressly stated on numerous occasions that it did not recognise goodwill and did not require goodwill to be paid. The Respondent actively and successfully sought the omission of goodwill from any agreement relating to the sale of a truck; (c) In 2001, the contractors were given the option of selling their truck to the Respondent and being engaged as employees (with all the benefits associated with permanent employment) or continuing to own their truck and being engaged as independent contractors, on the express footing that the Respondent did not recognise goodwill; (d) The Respondent had no knowledge of any goodwill being paid in relation to entry into the Respondent's yard; (e) The Respondent gave the contractors one month's notice of the termination of their contracts in accordance with the terms of those contracts. That notice was given immediately after the Respondent was informed by [NAME_16] that its contract would not be renewed; (f) The Respondent's contract was not renewed with [NAME_16] as a result of any fault on the part of the Respondent (or the drivers); (g) The Respondent did not play any part in the selection of contractors to be engaged by [NAME_16] in October 2006. Any unfairness in relation to that process, or the criteria used for selection, is the responsibility of [NAME_16], not the Respondent; (h) [NAME_3] was offered alternative work with the Respondent as an employee driver on [NAME_4] work. [NAME_3] did not even discuss that offer with the Respondent, with the result that he rejected the offer of alternative work without any knowledge of the terms and conditions of the offer; (i) The Respondent repainted [NAME_3]'s truck without any contractual obligation to do so, at a cost of $4,235 to the Respondent; and (j) [NAME_3] nor [NAME_2] made any attempt to contact the Respondent in relation to the availability of alternative work, as invited to do so both in the meeting on 20 September 2006 and in the Respondent's letter dated 20 September 2006. The evidence given by [NAME_54] was that the Respondent had work available at the time for owner drivers. 150 Finally, [NAME_52] asked the Tribunal to dismiss both [NAME_9] with costs reserved. 151 In reply, [NAME_51] answered each of [NAME_52]' three preliminary jurisdictional points. 152 On the exclusivity point, [NAME_51] submitted that the definition of head contract of carriage is not limited to an agreement, but includes an arrangement or practice. The contract itself provides at cl 1.12: The Contractor may during the Term undertake or agree to undertake the carriage of goods for or on behalf of any other person other than [NAME_4], provided such carriage does not conflict with the Contractor's obligations under this Agreement 153 The issue cannot be determined on the face of the contract alone. In reality, it was impossible for the carriers to undertake other work because it was a requirement of their contract that:

a) the truck to be fitted with communication equipment and other technology required by the respondent;

b) for signage and the truck to be painted in company livery; and

c) the vehicle to be available to provide a service for the respondent. 154 Significantly, subsection (2) of s 346 qualifies the exclusivity requirement as it says: (2) A carrier is not prohibited from making a claim under this section because the carrier performs minor or incidental work for a person other than the principal contractor under the head contract of carriage.

[NAME_51] also referred to Rumsey v R Clifford & Son Holdings Pty Ltd (1996) 68 IR 75 on this point. 155 In any event, it was incumbent on the respondent to call evidence to make good its propositions and not simply remain silent until closing submissions. 156 As to the point of whether the applicants were carriers as defined, [NAME_51] referred to the evidence that [NAME_2] was a director of a family company. ([NAME_52] thereupon withdrew this jurisdictional objection in respect to [NAME_2].) [NAME_51] tendered a company search for [NAME_3] which disclosed [NAME_3] to be both a director and shareholder of [NAME_3]. The respondent's third jurisdictional issue must fail when the first two are rejected. 157 [NAME_51] defended the attacks on the credibility of [NAME_2] by submitting that the infelicities with his evidence had more to do with his lack of command of English than a lack of credibility. 158 In respect to [NAME_3], his frank admission that he backdated the documents demonstrated that he was being truthful, because his admission didn't advance his case at all. CONSIDERATION 159 For the reasons which will shortly become self-evident, we find it unnecessary to make any findings on the respondent's three preliminary jurisdictional points. 160 This is so because we find that all of the jurisdictional prerequisites under s 346(1) of the Act have been met, with the exception of subsection (e) of s 346(1) which is expressed as follows.

"the principal contractor failed to take reasonable stops to advise the carrier that it was not a requirement of the principal contractor that such a payment be made or requested".

161 In our view, there is no doubt that the right to sell trucks with work was a contentious and much discussed issue between the contract carriers in the yard and the respondent's senior management when the respondent took over the [NAME_16] contract in 2001.

162 Clearly, the result of these meetings and negotiations was the inclusion of cl 8 in the contract carriers' agreement between the contract carriers and the respondent for work performed under the [NAME_16] contract. Clause 8 states: ASSIGNMENT 8.1 During the term of this Agreement, the Contractor shall not assign, subcontract, transfer, mortgage, charge or encumber all or any part of its rights, benefits or obligations under this Agreement, without the prior written permission of [NAME_4]. 8.2 The proposed assignee ("the Assignee") must be approved by [NAME_4] and [NAME_4] may at its discretion require a trial period of fourteen days before its determination as to whether to grant written permission for the assignment of this Agreement, such permission shall not be unreasonably withheld. 8.3 The Contractor is responsible for professional training of the Assignee in all [NAME_4] and [NAME_4]' customer processes wherever such assignment occurs. The Assignee must be suitably qualified.

163 This allowed a contract carrier to assign the remainder of his contract with the Principal Contractor to a third party, provided the incoming third party was acceptable to the Principal Contractor and provided the incoming third party acknowledged in writing that no compensation was payable should the contract terminate for reasons other than misconduct. Both applicants had copies of this contract prior to signing their own contracts, and [NAME_3] obtained legal and accounting advice and [NAME_55] obtained his accountant's advice.

164 Both applicants in these matters signed an acknowledgement that they were advised of it not being a company requirement for goodwill to be paid and goodwill was not a custom and practice in the yard, prior to their commencing paid work for the respondent. Even if we accept that [NAME_3] signed the form on 25 August 2003 (the day he commenced work) he was well aware of its contents prior to this date. In [NAME_2]'s case, we believe he received the acknowledgement form on 18 February 2002, well before his actual commencement date, and was fully aware of its requirements.

165 The acknowledgement which both applicants were required to sign before commencing paid work for the respondent included the following words:

It has been explained to me by [NAME_4], and I understand that [NAME_4] does not require a premium or fee to be requested or paid in order to enter into a Driver Agreement with them and there is no custom and practice within [NAME_4] that premiums or fees be paid to access work under a Driver Agreement.

166 The Tribunal believes that with such an explicit written acknowledgement, it could not be argued that the applicants were unaware that the respondent had a requirement that a premium not be paid.

167 The respondent specifically took steps to ensure that the applicants were made aware of it's position, and specifically had the applicants sign documents that they were made so aware. We accept [NAME_52]' submissions in this regard.

168 The Contractor Agreements, signed by the contractors in late 2001, had a cl 6.1 (a) which specifically provides that the contractor shall not be entitled to compensation on the termination of the agreement. The agreement also specifies that a contract can only be assigned to a third party with the written agreement of the Principal Contractor, (cl 8.1). 169 The evidence was that [NAME_3] had a copy of [NAME_21]'s agreement in July 2003, and [NAME_2] gave evidence that he had read the contract and understood it was for a term of five years and that no compensation was payable on termination with one month's notice.

170 With these specific provisions, it is clear that an incoming prospective contractor could not expect compensation from the Principal Contractor for a cessation of the contract according to its relevant terms.

171 It is apparent to the Tribunal that both applicants proceeded with their purchase, in spite of these warnings, in the mistaken belief that the respondent would continue to retain the [NAME_16] work past the contract expiry date of October 2006, and thus enable them to recover the costs associated with their purchase of the work. This expectation of future work seems to have been bolstered by the opinions expressed by other contract carriers in the yard and by the views of the sellers of the vehicles concerned.

172 In our opinion, the applicants took a calculated gamble that the [NAME_16] work would continue past October 2006. Unfortunately, that gamble failed.

173 It did not reflect well on the applicants that neither of them took up the offer of alternative work offered by the respondent to those contractors who failed to be picked up by [NAME_16] when [NAME_16] again in-sourced the work. There seems no logical explanation for this. It is no answer that the offer by the respondent was not specific and may have involved lesser rates. The fact was they were invited to inquire and failed to do so. The Tribunal is of the opinion that had the applicants offered themselves for ongoing work they could have reduced their exposure to continued debt and compensation would not have been necessary.

174 Notwithstanding our earlier jurisdictional finding, we fail to see how the termination of the applicants' contracts could be considered unfair, harsh and unconscionable when continued engagement of the contracts was offered by the respondent, but not taken up, or even investigated, by them or the Union.

175 For these reasons the claims by both the applicants are dismissed. Any application for costs must be made by notice of motion within 14 days from today.

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