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12 years ago, i agreed verbally with a (so called friend) colleague…

12 years ago, i agreed...

12 years ago, i agreed verbally with a (so called friend) colleague to join with him and his wife into their existing small business so as to both develop, add technical services (my qualifications) and generally grow the business. At the time it was verbally agreed to take a 3 way equal salary from the company, with consideration being given subject to growth that I would be a "Part" of the company.
This never came to fruition, although subject approached on many occasions over the years. I recently discovered, by chance, that also over the years an equal 3 way salary had NOT been maintained. even though his wife has applied very little actual work (she is named as a director) and therefore has been receiving a greater reward than myself. I approached the company directors (note my title, in name only is Director, Technical Services) for a correction to this situation, and was given a nothing offered response. I have recently left the company and moved on, but feel that I would like to recover what I did put in over the past 12 years to build the company up from a $250,000 per annum business to now what must be a $2,000,000 per annum business.
Do i have any legitimate reasonable chance of doing so ? My ex-wife was witness to the verbal agreement made 12 years ago, she is an ex-police officer, and she is willing to testify if this was necessary.

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Answered in 8 minutes by:

9/8/2012

Solicitor: Leon, Solicitor replied 10 years ago

Leon, Solicitor

Category: Australia Law

Satisfied Customers: 52,712

Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)

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Good Afternoon,

Is the structure that the business is running a company or a partnership?

If it is a company do you each have equal one 3rd shares in the company?

Where you were and are you still a director of the company?

Customer reply replied 10 years ago

Dear Sir or Madam

The company was registered "business name" P/L in 1994 by person "a"

Person "a" approached myself, asking me to join him in May 2000 in order to add strings to the bow and build company.

I became sub-contract to person "a" until July 2000, when GST was introduced and he suggested maybe be paid salary/wages from "his" company, but with proviso to obtain shares/partnership with company growth. Therefore I have have never been an actual named partner of company, although I was in title and on many occasions over the years when referred to external clients.

Following a few written requests to person "a" for recognition of what I have been a significant part of achievements for the company. -

I gave notice in June 2012 and left the company. this was due to above issues plus my own personal well being (stress). I have been under medication for approx 18 months.

To clarify what I need to know -

Do I have a reasonable claim against person "a" / company for a fair share of company growth ?

Is it a 50/50 situation ?

Or is there little chance of achieving anything ?

Yours Truly

P Stokes

Solicitor: Leon, Solicitor replied 10 years ago

Good Afternoon,

I have read what you have sent me and unfortunately I am now going to have to be the bearer of bad news in relation to profit-sharing with the business.

From what you have just described, you will note a shareholder in the company and you were initially a subcontractor, where you charged for the work he did and thereafter became an employee.

As a subcontractor and an employee you are not entitled to charge for the growth of the company/business unless there is something in your contracts and gives you a percentage of the profits.

If you are suffering due to emotional stress as a result of the work and the way you were treated, as an employee you are entitled to claim workers compensation, for your inability to work and all your medical expenses.

They cannot refuse your claim if your doctor confirms that your stress-related illness is a direct result of your work with the company.

If you were promised a profit-sharing arrangement when you started with them, you are entitled to claim. If there is nothing in writing then it is your word against theirs as to what the agreement was, and the court will look at what you were receiving and what your duties were to determine whether or not such an arrangement existed.

From what you have told me I suspect that your chances of success are limited and that she would be wasting money.

You do that I have a possible claim for workers compensation as a result of the stress that they have put you under.

I hope this is of assistance. If you have any other questions please do not hesitate to contact me.

Having answered your question I would like to explain how I am paid for my work. The rating given by you, for my answer will decide whether or not I will be paid for my work.

At the end of this post you will see 5 faces asking you to rate my work. Selecting either of the 2 the unhappy faces means you are not happy with my answer and do not wish me to be paid for my work. The other 3 mean I am paid.

I would prefer you rate me at the very end of our session not after each response. This way I can be sure you have an answer that assists you and you can rate the whole experience.

If you want more information after I respond, or wish to have something cleared up, select "Reply so Sydney-Lawyer" or "Reply to Expert" and we can continue until you are satisfied.

I am here to assist you as quickly as possible, and you rating each post will delay the process as it does not tell me what the issue is. I would prefer you ask me questions than rating the response and not providing me with further questions.

Customer reply replied 10 years ago

I understand your reference to things being written, however, in this situation there has NEVER been any written contract or agreement between the parties.

The only reference to profit sharing / partnership was made verbally some 12 years ago.

Hence, based upon my information supplied to you, my specific query is what legal chance do I have in achieving some recognition for the past 12 years, based upon ONLY verbal (and no written) agreements ?

Solicitor: Leon, Solicitor replied 10 years ago

The Afternoon,

Was this a verbal agreement ever put into practice and can you show that over the 12 years you were actually receiving one 3rd of all the profits?

Was there any independent witness present at the time of the verbal agreement they can verify what was said?

Customer reply replied 10 years ago

Sorry but it appear that you have not fully read and responded in a comprehensive manner to my initial inquiry -

As per the reference to my ex-wife in my very first question to you - Yes, my ex-wife was witness to the verbal agreement and Yes she is able to verify what was said.

Unless she is not considered to be an independent witness ?

No, I cannot show anything other than a wage, as I do not have access to the company books. I am a honest person and have not obtained or made copies any illegal documentation.

Sorry but it appear that you have not fully read and responded in a comprehensive manner to my initial inquiry -

As per the reference to my ex-wife in my very first question to you - Yes, my ex-wife was witness to the verbal agreement and Yes she is able to verify what was said.

Unless she is not considered to be an independent witness ?

No, I cannot show anything other than a wage, as I do not have access to the company books. I am a honest person and have not obtained or made copies any illegal documentation.

,Sorry but it appear that you have not fully read and responded in a comprehensive manner to my initial inquiry -
As per the reference to my ex-wife in my very first question to you - Yes, my ex-wife was witness to the verbal agreement and Yes she is able to verify what was said.
Unless she is not considered to be an independent witness ?

No, I cannot show anything other than a wage, as I do not have access to the company books. I am a honest person and have not obtained or made copies any illegal documentation.

Solicitor: Leon, Solicitor replied 10 years ago

Good Afternoon

I notice that your ex-wife was a witness, as she is now your ex-wife he may be difficult for them to assert that she has a vested interest. If there is somebody else as well it would be of greater weight.

If the matter is to go to court, then you could subpoena the records of the company and see what level of profits you were receiving. If you believe that you were receiving one 3rd of the profits of the company, this is something you're well have to explain how you worked out.

It is not going to be a simple matter, and as I mentioned earlier your word against theirs as to what the agreement was. You should speak to your ex-wife and see if she is prepared to give evidence on your behalf to support your case.

I hope this is clearer, witness and I was hoping that there was possibly an additional witness to your ex-wife.

Another thought, is how they referred to you in social circles. If it was always held out that you were in business together, and others can verify from discussions this is how it was painted to them, this would assist your case.

I don't know how close you were socially with these other people but this is another avenue of providing evidence to the relationship you had with them.

I hope this is of assistance. If you have any further questions please do not hesitate to contact me.

Having answered your question I would like to explain how I am paid for my work. The rating given by you, for my answer will decide whether or not I will be paid for my work.

I would prefer you rate me at the very end of our session not after each response. This way I can be sure you have an answer that assists you and you can rate the whole experience.

If you want more information after I respond, or wish to have something cleared up, select "Reply so Sydney-Lawyer" or "Reply to Expert" and we can continue until you are satisfied.

Leon, Solicitor

Category: Australia Law

Satisfied Customers: 52,712

Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)

Verified

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