Bednall v Wesley College

Case [2005] WASC 101


JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   BEDNALL -v- WESLEY COLLEGE [2005] WASC 101

CORAM:   MASTER NEWNES

HEARD:   6 APRIL 2005

DELIVERED          :   24 MAY 2005

FILE NO/S:   CIV 2513 of 2004

BETWEEN:   JOHN MACDONNEL BLORE BEDNALL

Plaintiff

AND

WESLEY COLLEGE
Defendant

Catchwords:

Practice and procedure - Application to strike out statement of claim - Contract of employment - Whether term as to reasonable notice before termination implied - Whether term of trust and confidence implied - Whether implied term of trust and confidence survives termination of employment - Relevance of post­termination conduct of employer - Whether employer owes duty of care to employee regarding procedures for termination of employment - Availability of exemplary damages in contract claims

Legislation:

Industrial Relations Act 1966 (NSW)

Industrial Relations Act 1979 (NSW)

Workplace Relations Act 1996 (Cth)

Result:

Statement of claim struck out

Category:    B

Representation:

Counsel:

Plaintiff:     Mr G Droppert & Mr B R Jackson

Defendant:     Mr W S Martin QC & Ms E Cain

Solicitors:

Plaintiff:     Gadens Lawyers

Defendant:     Jackson McDonald

Case(s) referred to in judgment(s):

Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66

Bowker v Prophecy Technologies Pty Limited [1999] NSWIRComm 248

Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144

Butler v Fairclough (1917) 23 CLR 78

Byrnes v Treloar, unreported, NSWCA, 10 December 1997

Coyne v Commercial Equity Corporation Ltd & Ors (1998) 20 WAR 109

Eastwood v Magnox Electric Plc [2004] 3 All ER 991

Gambotto v John Fairfax Publications Pty Ltd (2001) 104 IR 303

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Gray v Motor Accident Commission (1998) 196 CLR 1

Heptonstall v Gaskin (No 2) [2005] NSWSC 30

Hospital Contribution Fund Australia v Hunt (1983) 44 ALR 365

Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90

Irving and Ors v Kleinman [2005] NSWCA 116

Johnson v Unisys Ltd [2003] 1 AC 518

Loughridge v Lavery [1969] VR 912

Malik v Bank of Credit and Commerce International SA (In Liq) [1998] AC 20

North v Television Corporation Ltd (1976) 11 ALR 599

Nund v McWaters [1982] VR 575

Poort v Development Underwriting (Vic) Pty Ltd (No 2) [1977] VR 454

Rigg v Lee Loy Seng [1987] WAR 333

Sinnatamby v Cooper Corporation Pty Ltd [1986] WAR 36

Spring v Guardian Assurance Plc [1995] 2 AC 296

State of New South Wales v Paige (2002) 60 NSWLR 371

Sullivan v Moody (2001) 207 CLR 562

Thomson v Orica Australia Pty Ltd [2002] FCA 939

Thornton v Bassett [1975] VR 407

Walters v Cooper [1967] VR 583

Whitfeld v De Lauret & Co Pty Ltd (1920) 29 CLR 71

Case(s) also cited:

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

Chandler & Ors v Water Corporation [2001] WASC 166

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241

Heptonstall v Gaskin [2004] NSWSC 80

Masters v Cameron (1954) 91 CLR 353

McCabe v Cornwall County Council [2004] 3 All ER 991

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AGLC
Bednall v Wesley College [2005] WASC 101
Case
[2005] WASC 101
Decision Date

CaseChat Overview and Summary

In the matter of Bednall v Wesley College, the plaintiff sought to challenge the termination of their employment on the basis of certain implied terms in their contract. The court was asked to consider whether certain terms were implied into the contract of employment, whether such terms survived the termination of employment, and whether the employer owed a duty of care to the employee regarding the procedures for termination of employment. The case also considered the availability of exemplary damages in contract claims.

The key legal issues before the court were whether certain terms were implied into the contract of employment, whether such terms survived the termination of employment, and whether the employer owed a duty of care to the employee regarding the procedures for termination of employment. The court also considered whether exemplary damages were available in contract claims.

In delivering the judgement, the court held that the common law principles with respect to repudiation of a contract apply to an employment contract. The court found that the plaintiff's case was based on the implication of certain terms into the contract of employment, but held that such terms were not capable of being implied. The court held that the plaintiff was entitled to accept repudiatory conduct of the employer and terminate the agreement without regard to the requirements for termination set out in the agreement. The court also found that the allegation that the employer would not terminate the plaintiff's employment except in accordance with certain clauses of the service agreement was manifestly untenable. However, the court found that the plea that the employer would not without reasonable cause act in a way likely adversely to affect the plaintiff's reputation was not untenable.

The court held that the employer owed a duty of care to the employee regarding the procedures for termination of employment, and that exemplary damages were not available in contract claims.

In conclusion, the court struck out certain paragraphs of the statement of claim and held that certain terms were not capable of being implied into the contract of employment. The court also found that the employer owed a duty of care to the employee regarding the procedures for termination of employment, and that exemplary damages were not available in contract claims.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The common law principles with respect to repudiation of a contract apply to an employment contract: North v Television Corporation Ltd (1976) 11 ALR 599. As I understand the plaintiff's case, the implied terms pleaded are alleged to have the effect described by senior counsel for the defendant. That is, even if the plaintiff repudiated the contract of employment the defendant would be required to adhere to the requirements for termination set out in cl 10 and cl 12 of the agreement, or, pursuant to par 14, to give notice of termination. I accept the defendant's submission that the matters relied upon by the plaintiff are incapable of giving rise to the implication of such terms. I would therefore strike out pars 7, 13 and 14 of the statement of claim. The defendant submitted that the plea in par 15 of the statement of claim, as to the implied term of trust and confidence, disclosed no reasonable cause of action. It is clearly arguable that a term of trust and confidence may be implied in a contract of employment: see Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144; Thomson v Orica Australia Pty Ltd [2002] FCA 939 per Alsopp J at [141]; Heptonstall v Gaskin (No 2) [2005] NSWSC 30; Irving and Ors v Kleinman [2005] NSWCA 116. On this application the defendant did not contend otherwise, but submitted that the plea as formulated in the statement of claim was simply untenable. It was contended on behalf of the defendant that there is no arguable basis for the implication of the term alleged at par 15(b), that the defendant would not without reasonable cause act in a way likely adversely to affect the plaintiff's reputation, or the term pleaded in par 15(d), that the defendant would not terminate the plaintiff's employment except in accordance with cl 12 of the service agreement. In respect of par 15(d), the defendant reiterated its submission that the plaintiff would always be entitled to accept repudiatory conduct of the plaintiff and thereby terminate the agreement without regard to the requirements for termination set out in the agreement. For the reasons I have given above, I accept that submission. In my view the allegation in par 15(d) is manifestly untenable and should be struck out. I would not, however, regard the plea in par 15(b), that the defendant would not without reasonable cause act in a way likely adversely to affect the plaintiff's reputation, in the same light. In Malik v Bank of Credit and Commerce International SA (In Liq) [1998] AC 20 the House of Lords held that, as part of the employer's general obligation not to engage in conduct likely to undermine the trust and confidence required by the employment relationship, the employer was under an implied obligation to its employees not to conduct a dishonest or corrupt business, and damages were recoverable by an employee who it was foreseeable would be, and was, handicapped in his or her future employment prospects by the employer's dishonest or corrupt business practices.