Carrier Australasia Limited v Hunt

The case of *Carrier Australasia Limited v Hunt* involved an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute concerned the wrongful dismissal of the respondent, Mr. Hunt, from his position as managing director of the appellant company, Carrier Australasia Limited. Mr. Hunt had entered into a service agreement with the company for a fixed term, and he alleged that his dismissal before the expiry of this term constituted a breach of contract.

The central legal issues before the High Court were whether the company was entitled to terminate Mr. Hunt's employment agreement by altering its articles of association and subsequently removing him from the board of directors. Specifically, the court had to determine if the company's amendment of Article 91, which originally subjected the removal of directors to existing agreements, and its subsequent removal of Mr. Hunt as a director, were valid actions that lawfully terminated his managing director contract. The court also considered whether the terms of the employment agreement, particularly clause 7 which allowed termination if the managing director ceased to be a director, were intended to permit such a termination when procured by the company's own actions.

The High Court was equally divided on the appeal. Rich and Starke JJ. were of the opinion that the appeal should be allowed, finding that the company's actions were permissible. They reasoned that the employment agreement was expressly made subject to the company's articles of association, which were alterable, and that clause 7 of the agreement provided a clear mechanism for termination if Mr. Hunt ceased to be a director. They did not find an implied term preventing the company from altering its articles to facilitate such a removal. Conversely, Evatt and McTiernan JJ. were of the opinion that the appeal should be dismissed. They concluded that the agreement, particularly given its long-term nature and restrictive covenants, impliedly protected Mr. Hunt from having his directorship removed solely to terminate his managing director contract. They viewed the company's actions as a repudiation of the contract, despite the formal alteration of the articles.

As the High Court was equally divided, the decision of the Supreme Court of New South Wales was affirmed. This meant that Mr. Hunt's claim for wrongful dismissal was upheld, and the company's appeal was dismissed.