Bannon v Nauru Phosphate Royalties Trust - [2018] VSC 532

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

EMPLOYMENT & INDUSTRIAL LIST

S CI 2015 03354

PAUL BANNON	Plaintiff
v
NAURU PHOSPHATE ROYALTIES TRUST	Defendant
and
NAURU PHOSPHATE ROYALTIES TRUST	Plaintiff by Counterclaim
v
PAUL BANNON	Defendant by Counterclaim

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JUDGE:	McDONALD J
WHERE HELD:	Melbourne
DATES OF HEARING:	16 to 20, 23, 24 and 26 April, 14 May, 4 to 7 and 25 to 27 June, 17 and 20 July 2018
DATE OF JUDGMENT:	14 September 2018
CASE MAY BE CITED AS:	Bannon v Nauru Phosphate Royalties Trust
MEDIUM NEUTRAL CITATION:	[2018] VSC 532

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CONTRACT — Contract of employment — Claim for unpaid fees for acting as Secretary/Director of 19 subsidiaries of defendant — Estoppel by convention — Defendant assumed that it had no liability to pay plaintiff fees for acting as Secretary/Director of subsidiaries — Plaintiff acquiesced in assumption — Whether estoppel by convention suspensory or permanent — Plaintiff estopped from claiming fees — Whether claims for fees prior to June 2009 statute barred — Claims for accrued annual and long service leave —Claims for redundancy pay and payment in lieu of notice — Claims for superannuation entitlements — Whether such claims subject to maximum superannuation salary base in Superannuation Guarantee (Administration) Act 1992 (Cth) — Corporations Act 2001 (Cth) Part 1.5, ss 46, 50AAA, 188, 204C — Superannuation Guarantee (Administration) Act 1992 (Cth) ss 11, 12, 15, 19 — Limitation of Actions Act 1958 ss 5, 27 — Nauru Phosphate Royalties Trust Act 1968 (Nr) s 32.

EQUITY — Fiduciary obligations — Counterclaim for repayment of funds advanced to plaintiff in excess of funds expended on behalf of the defendant — Adequacy of evidence — Claim dismissed in respect of financial years for which defendant failed to discover financial records which may have assisted plaintiff’s defence of claim — Claim upheld in respect of 2014 financial year — Civil Procedure Act 2010 s 7 — Supreme Court (General Civil Procedure) Rules 2015 r 48.03.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T J North QC with Mr M G Rinaldi	Lander & Rogers
For the Defendant	Mr R A Millar	HMB Employment Lawyers

HIS HONOUR:

Introduction

The Nauru Phosphate Royalties Trust (‘NPRT’) is a body corporate established under the Nauru Phosphate Royalties Trust Act 1968 (Nr) (‘the Act’). The Act established the Nauruan Land Owners Royalty Trust Fund. The beneficiaries of the fund are landowners in Nauru. Phosphate mining in Nauru generated millions of dollars of income. This money was invested in assets, particularly real estate, in other countries, including Australia. A principal function of the NPRT is the administration and distribution of payments to beneficiaries of the fund.

Mr Bannon was employed by NPRT between October 1994 and 30 June 2014. From July 2003 until 30 June 2014 Mr Bannon was the Secretary of NPRT. In this position he was the most senior employee of the Trust. Throughout his employment NPRT’s office was based in Melbourne. During the period…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] VSC 532
Decision Date: 14 September 2018

CaseChat Overview and Summary

The Federal Court considered claims by a former employee, Bannon, against the Nauru Phosphate Royalties Trust for unpaid fees, annual and long service leave, redundancy pay, and superannuation entitlements. The defendant had assumed it had no liability to pay the plaintiff fees for acting as Secretary/Director of its subsidiaries, and the plaintiff acquiesced in this assumption. The court was required to determine if an estoppel by convention applied to prevent the plaintiff from claiming fees, whether the claims were statute-barred, and if the claims for leave, redundancy, and superannuation were valid. The court also considered whether the superannuation claims were subject to the maximum salary base under the Superannuation Guarantee (Administration) Act 1992 (Cth).

The court ruled that the estoppel by convention was permanent, preventing the plaintiff from claiming fees. It found that the claims for fees prior to June 2009 were statute-barred, but the claims for annual and long service leave, redundancy pay, and payment in lieu of notice were not. The court held that the superannuation entitlements were not subject to the maximum salary base in the Superannuation Guarantee (Administration) Act 1992 (Cth). The counterclaim for repayment of funds advanced to the plaintiff was dismissed for certain financial years due to the defendant's failure to discover relevant financial records, but was upheld for the 2014 financial year.

The final orders included dismissing the plaintiff's claims for unpaid fees and for repayment of funds advanced for certain financial years, while allowing the claims for annual and long service leave, redundancy pay, payment in lieu of notice, and superannuation entitlements. The court also ordered the defendant to pay the plaintiff for the 2014 financial year the amount of funds advanced in excess of those expended on behalf of the defendant.

Orders