Tradecorp International Pty Ltd

1

[Extract from Queensland Government Industrial Gazette,

dated 4 March, 2005, Vol. 178, No.9, pages 186-187]

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Industrial Relations Act 1999 –s. 331(b)(ii) – application to strike out or dismiss proceedings

Tradecorp International Pty Ltd AND Anthony Russell (Case No. B1970 of 2004)

DEPUTY PRESIDENT SWAN 22 February 2005

DECISION

This application is made by Tradecorp International Pty Ltd (Tradecorp) pursuant to s. 331 of the Industrial Relations Act 1999(the Act) to dismiss and/or strike out application B1420 of 2004. B1420 of 2004 is an application made by Mr Anthony Russell against the respondent, Tradecorp, alleging an Unfair Contract pursuant to s. 276 of the Act.

The essence of this application is that Mr Russell (in B1420 of 2004) has no locus standi to bring an application under s. 276(3)(a) of the Act. The applicant claims that the contractual arrangement was between Ancath Corporation Limited (Ancath) and Tradecorp and not Mr Russell and Tradecorp.

Tradecorp was represented by Livingstones Australia and Mr Russell represented himself.

Tradecorp state as follows:

-A contract was entered into between Tradecorp and Ancath. No dispute exists around this point.

-This contract was signed by Mr Russell on behalf of and under the seal of Ancath.

-A Deed of Release had originally been signed by the applicant in his capacity as a representative of Ancath.

-Mr Russell had stated in matter No. B1658 of 2004that:

“Should the Commission rule that I have no power to bring the Application in Case No B1420 of 2004 and that it should be brought by the Ancath Corporation Limited then I refer to the attached letter from that Company giving me the authority to do so.”.

-An invoice which was issued by Ancath had attached to it a handwritten note saying that Mr Russell was acting on behalf of Ancath.

-There is no evidence of any contract between Mr Russell and Tradecorp.

-Mr Russell was not a party to the contract as required by s. 276(3)(a) of the Act.

In this matter, Mr Russell stated that:

“It is my submission that the Ancath Corporation and myself, if not totally in the strict legal sense, are not perhaps one and the same they should be treated as one and the same for the purposes of my application that is before the Commission.”.

Mr Russell went on to submit that at the time of entering into the contract with Tradecorp, he was in effect in control of Ancath. That control diminished around October 2004 because of domestic difficulties encountered by Mr Russell. Shortly thereafter, however, he gained a controlling interest in the company.

At the time of creating the contract, Mr Russell states that, at the suggestion of Mr Zarb (Managing Director of Tradecorp),a contract was entered into between Tradecorp and Ancath rather than between Tradecorp and Mr Russell. Allegedly, this was suggested by Mr Zarb for the purposes of avoiding payroll costs.

Ancath was a New Zealand registered shelf company, owned by Mr Russell’s wife, which was to be used as the vehicle for receiving payments from Tradecorp for Mr Russell’s services. Mr Russell and his wife also had a registered business partnership in Australia and the GST applicable to Ancath’s invoices were to be paid to this partnership.

At this hearing, Mr Russell stated:

“So whilst the principal amounts of an Ancath invoice would be paid into Ancath’s bank account in New Zealand, in order to comply with Australian taxation law the GST was paid into the Australian bank account of A W Russell and Co. There is nothing sinister nor underhanded in any aspect of the set up with Ancath.”.

The thrust of Mr Russell’s submission was that as it was Tradecorp (i.e. Mr Zarb) which initiated this contractual arrangement, Tradecorp should be prohibited from now using that arrangement against him. The Commission was requested, amongst other things and in a roundabout manner, to draw an adverse inference because Mr Zarb had not been called by the applicant to give evidence.

In considering all of the issues relevant to this hearing, the reality of this situation seems to be as follows:

-Mr Russell participated in discussions with Tradecorp aimed at creating contractual arrangements relative to work to be performed.

-It is not contested that Mr Zarb required the contract to be between a company (and in this case, Ancath only because it was already in existence) and Tradecorp.

-Regardless of who initiated the discussions as to the making of the contract, a contract was made between Ancath and Tradecorp. There is nothing before me to suggest that Mr Russell was forced against his will to enter into this contract.

-In fact, Mr Russell went to some lengths to facilitate the specifics of the contractual outcome which ensued.

-The contract was signed by Mr Russell on behalf of and under the seal of Ancath.

-A number of documents exist showing that Mr Russell was acting on behalf of Ancath during the life of the contract.

The contract in question was entered into by Ancathand Tradecorp. It is not as if, beyond that event, there is no further mention of Ancathin any capacity whatsoever. There is nothing in the documentation before me to indicate that Mr Russell was unhappy with this arrangement. Ancath continued to be the body referred to in all negotiations between the parties. The arrangement appeared to have worked well for all concerned until such time as the current difficulties occurred and the ramifications regarding the contracting parties were felt by Mr Russell. It is too late in the day to argue that it was all a subterfuge on Tradecorp’s part or that Tradecorp cannot take advantage of the situation which has now emerged.

Mr Russell does not have the locus standi tobring an application under s. 276(3)(a) of the Act. Mr Russell was not a “party” to the contract.

This application is granted. B1420 of 2004 is dismissed because “further proceedings by the court or commission are not necessary or desirable in the public interest” (see s.331(b)(ii) of the Act).

Order accordingly.

Government Printer, Queensland

The State of Queensland 2005.