JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: CHIU -v- LIEBHERR-AUSTRALIA PTY LTD [2025] WADC 6
CORAM: REGISTRAR NAIRN
HEARD: 3 OCTOBER 2024 & SUPPLEMENTARY SUBMISSIONS FILED ON 28 OCTOBER 2024 BY DEFENDANT & 18 NOVEMBER 2024 BY PLAINTIFF
DELIVERED : 20 FEBRUARY 2025
FILE NO/S: CIV 5211 of 2022
BETWEEN: MING-LAN CHIU
Plaintiff
AND
LIEBHERR-AUSTRALIA PTY LTD
Defendant
Catchwords:
Practice and procedure - Pleadings - Defendant's application to strike out statement of claim pursuant to O 20 r 19 Rules of the Supreme Court 1971 (WA) - Defendant's alternative application for summary judgment pursuant to O 16 r 1 Rules of the Supreme Court 1971 (WA) - General principles - Leave to replead where statement of claim previously struck out in its entirety in Chiu v Liebherr-Australia Pty Ltd [2024] WADC 5
Claims arising out of suspension and termination of employment - Breach of employment contract - Negligence - Negligent misstatement
Implied terms of employment contract - Terms implied in fact or by operation of law - Whether employer has duty of good faith
Damages sought for pecuniary and non-pecuniary loss - Employment law context - Psychiatric harm - Impact of Elisha v Vision Australia Ltd [2024] HCA 50
Issue estoppel - Ability to pursue contract and tort claims in face of findings made in Fair Work Commission decision regarding unfair dismissal under the Fair Work Act 2009 (Cth)
Whether negligence claim otherwise barred in whole or part by operation of common law provisions of workers' compensation legislation - Application of, and transitional provisions of, Workers Compensation and Injury Management Act 2023 (WA) and impact on operation of Workers' Compensation and Injury Management Act 1981 (WA)
Legislation:
Fair Work Act 2009 (Cth), s 385, s 392, s 394
Rules of the Supreme Court 1971 (WA), O 16 r 1, O 20 r 19
Workers' Compensation and Injury Management Act 1981 (WA), s 5, s 93E, pt IV
Workers Compensation and Injury Management Act 2023 (WA), s 6, s 7, pt 7 div 1 - div 4, pt 14
Result:
Defendant's application to strike out statement of claim allowed in part with partial leave to replead granted to the plaintiff
Defendant's application for summary judgment dismissed
Representation:
Counsel:
| Plaintiff | : | In person |
| Defendant | : | Mr A J C Mossop |
Solicitors:
| Plaintiff | : | Not applicable |
| Defendant | : | Ai Group Workplace Lawyers |
Case(s) referred to in decision(s):
AA v Trustees of the Roman Catholic Church for the Diocese of Maitland‑Newcastle [2024] NSWSC 1183
Addis v Gramophone Company Ltd [1909] AC 488
Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88
Armet v CFC Consolidated Pty Ltd [2019] WASCA 165
Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344
Bartlett v Australia & New Zealand Banking Group Ltd [2016] NSWCA 30; (2016) 92 NSWLR 639
Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20
BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977)…
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- Case
- [2025] WADC 6
- Decision Date
CaseChat Overview and Summary
The court had to determine several legal issues, including whether an employer has a duty of good faith under an employment contract, the implications of Elisha v Vision Australia Ltd [2024] HCA 50 on the plaintiff's claims, the effect of issue estoppel arising from a Fair Work Commission decision regarding unfair dismissal, and whether the plaintiff's negligence claim was barred by workers' compensation legislation. Additionally, the court considered the transitional provisions of the Workers Compensation and Injury Management Act 2023 (WA) and their impact on the operation of the Workers Compensation and Injury Management Act 1981 (WA).
The court examined the principles established in Burger King Corporation v Hungry Jack's Pty Ltd, noting the differences between a commercial franchise agreement and an employment contract. It also considered the evolution of the law regarding implied obligations of good faith in employment contracts, citing cases such as XY v WA Country Health Service and Pettit v Evolution Mining Ltd [No 2]. The court held that the plaintiff's claims, particularly regarding the duty of good faith and the applicability of workers' compensation provisions, were arguable and should not be struck out. The application for summary judgment was also dismissed.
The court ruled that the plaintiff's claims were not barred by the transitional provisions of the Workers Compensation and Injury Management Act 2023 (WA) and allowed the plaintiff to proceed with his claims for breach of employment contract, negligence, and negligent misstatement. The court granted the plaintiff leave to amend his statement of claim to address the issues raised in the defendant's applications.
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 basis for the Good Faith Obligation is expressly stated in the FASOC to be based on the principles established in Burger King Corporation v Hungry Jack's Pty Ltd.[31][31] Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558 (Burger King). Burger King concerned a clause in a franchise agreement which was conditional upon a party obtaining 'operational, financial and legal approval' of the other party, which such approval was 'in the sole discretion of the other party' having regard to an extensive number of considerations. The court found that the franchisor's power to grant or withhold approval, though expressed as a 'sole discretion', had to be subject to some constraints, otherwise the entirety of the contractual bargain would be undermined. The court was satisfied that there was an implied obligation in the agreement to act reasonably and in good faith in exercising the discretion of whether to approve or not. The implication was one of law, rather than fact.[32][32] Burger King[159] - [186]. Plainly, this case is not 'on all fours' with Burger King. Some obvious differences are as follows:(a)Burger King was a commercial franchise agreement; whereas here is an employment contract; and(b)the discretion to be exercised in this case is different (namely a power to give a direction to an employee) to Burger King (a discretion to withhold approval). I am also mindful that since Burger King was decided there has been a considerable amount of case law relevant to the extent to which good faith ought to be implied in contracts generally or specific species of contracts. It suffices to note some relatively recent examples arising from workplace disputes. In XY v WA Country Health Service[33] Pritchard J was called upon to consider whether and to what extent an employment contract[34] carried with it an implied obligation of good faith, in a context where an interlocutory injunction was sought against a hospital's (defendant's) decision to impose a suspension on a doctor (the plaintiff). [33] XY v WA Country Health Service [2016] WASC 202 (XY).[34] Or at least a contract akin to an employment contract - the contract under consideration in that case was a medical services agreement between a doctor and a hospital. The plaintiff argued, amongst other things, that there was an implied term in the contract that the defendant hospital would act reasonably, alternatively in good faith, in directing a suspension of the plaintiff.[35] Although her Honour did not directly address the good faith aspect of the argument, her Honour did consider that the law in the area was 'evolving' and it remained unclear whether the plaintiff would succeed in establishing that the direction to suspend was one which was fettered by an obligation to act reasonably.[36] Plainly her Honour considered the plaintiff's case was arguable.[35] XY [76].[36] XY [82]. In Pettit v Evolution Mining Ltd [No 2],[37] McCann DCJ considered that the High Court's decision in Commonwealth Bank of Australia v Barker[38] precluded terms being implied by law that would import mutual obligations of trust and confidence, good faith and fair dealing between parties to an employment contract.[39] In his Honour's view, prior decisions of other courts tending to suggest otherwise were taken to be overruled.[40][37] Pettit v Evolution Mining Ltd [No 2] [2017] WADC 68 (Pettit).[38] Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169; (2014) 312 ALR 356; (2014) 88 ALJR 814; (2014) 244 IR 425; (2014) 66 AILR 102-240 (Barker).[39] Pettit [41] - [49].[40] Pettit [46].