FEDERAL COURT OF AUSTRALIA
Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 1030
Citation: Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 1030 Parties: ROBERT EDMOND COGHILL v INDOCHINE RESOURCES PTY LTD (ACN 119 808 007) File number: NSD 206 of 2014 Judge: KATZMANN J Date of judgment: 17 September 2015 Catchwords: CONTRACTS –– contract of employment –– breach of contract –– whether oral variation of written contract temporary or permanent –– termination without notice or payment in lieu of notice –– unpaid salary, superannuation, accrued annual leave and other benefits –– whether alleged entitlement to five years’ salary and other benefits under the contract a genuine pre-estimate of damage or a penalty
INDUSTRIAL LAW –– untaken paid annual leave owing on termination of employment –– whether employee entitled to payment in lieu of written notice –– whether employment terminated for serious misconduct –– Fair Work Act 2009 (Cth), ss 90(2), 117, 123(1)(b)
Legislation: Annual Holidays Act 1944 (NSW) s 4
Evidence Act 1995 (Cth) s 136
Fair Work Act 2009 (Cth) ss 12, 13, 14, 61(1), 87, 90(2), 117, 123(1)(b)
Federal Court of Australia Act 1976 (Cth) s 51A
Federal Court Rules 2011 (Cth) r 30.21Cases cited: AMEV‑UDC Finance Ltd v Austin (1986) 162 CLR 170
Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99
Bartercard Ltd v Myallhurst Pty Ltd [2000] QCA 445
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Dunlop Pneumatic Tyre Company Limited v New Garage and Motor Company Limited [1915] AC 79
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640
Esanda Finance Corporation Limited v Plessnig (1988) 166 CLR 131
Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603
Miliangos v George Frank (Textiles) Ltd [1976] AC 443
Multiplex Constructions Pty Ltd v Abgarus Pty Ltd (1992) 33 NSWLR 504
O’Dea v Allstates Leasing System(WA) Pty Ltd (1983) 152 CLR 359
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
PT Thiess Contractors Indonesia v PT Arutmin Indonesia [2015] QSC 123
Robophone Facilities Ltd v Blank [1966] 3 All ER 128Other materials: Carter, JW, Contract Law in Australia (6th ed, LexisNexis Butterworths Australia, 2013)
Sneddon NC, Bigwood RA and Ellinghaus MP, Cheshire and Fifoot Law of Contract (10th ed, LexisNexis Butterworths Australia, 2012Prince T, “Defending orthodoxy: Codelfa and ambiguity” (2015) 89 ALJ 491
Date of hearing: 14 September 2015 Place: Sydney Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 108 Counsel for the Applicant: Mr D W Robertson Solicitor for the Applicant: DC Legal Pty Ltd Counsel for the Respondent: The Respondent did not appear
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
FAIR WORK DIVISION
NSD 206 of 2014
BETWEEN: ROBERT EDMOND COGHILL
ApplicantAND: INDOCHINE RESOURCES PTY LTD (ACN 119 808 007)
Respondent
JUDGE:
KATZMANN J
DATE OF ORDER:
17 SEPTEMBER 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
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Details
- Case
- [2015] FCA 1030
- Decision Date
CaseChat Overview and Summary
The case of Coghill v Indochine Resources Pty Ltd (No 2) involved the plaintiff, Mr Coghill, who was employed by the defendant, Indochine Resources Pty Ltd (IRL), as chairman, company secretary and chief financial officer. Mr Coghill brought an action against IRL for breach of his employment contract and alleged that he was owed unpaid salary, superannuation, accrued annual leave, and other benefits. The court was required to decide whether the alleged entitlement to five years’ salary and other benefits under the contract constituted a genuine pre-estimate of damage or a penalty. The court also had to determine whether Mr Coghill was entitled to payment in lieu of written notice, whether his employment was terminated for serious misconduct, and whether the claim for damages was justified.
The court found that the defendant's case of serious misconduct was not supported by evidence and that Mr Coghill had an entitlement under the Fair Work Act 2009 (Cth) to three weeks’ written notice of the day of the termination of his employment. The court concluded that IRL contravened s 117 of the Act by failing to give Mr Coghill that notice or pay him at least the amount it would have been liable to pay had the employment continued until the end of the minimum period of notice. The court held that there would be judgment in favour of Mr Coghill and that IRL should pay him damages for breach of his employment contract, together with interest.
The court ordered that judgment would be given in the foreign currency in which most of the amounts in question were payable. In accordance with the Foreign Judgments Act 1991 (Cth) and the Uniform Civil Procedure Rules (Qld), the court invited further submissions in writing on the amount of interest to be included in the judgment, whether declarations should be made, the proper form of the declarations, and whether Mr Coghill was entitled to all or part of his costs and, if so, the basis for that entitlement.
The court ordered that by 1 October 2015, the applicant file further submissions on the questions of pre-judgment interest, declaratory relief and costs. Entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.
The court found that the defendant's case of serious misconduct was not supported by evidence and that Mr Coghill had an entitlement under the Fair Work Act 2009 (Cth) to three weeks’ written notice of the day of the termination of his employment. The court concluded that IRL contravened s 117 of the Act by failing to give Mr Coghill that notice or pay him at least the amount it would have been liable to pay had the employment continued until the end of the minimum period of notice. The court held that there would be judgment in favour of Mr Coghill and that IRL should pay him damages for breach of his employment contract, together with interest.
The court ordered that judgment would be given in the foreign currency in which most of the amounts in question were payable. In accordance with the Foreign Judgments Act 1991 (Cth) and the Uniform Civil Procedure Rules (Qld), the court invited further submissions in writing on the amount of interest to be included in the judgment, whether declarations should be made, the proper form of the declarations, and whether Mr Coghill was entitled to all or part of his costs and, if so, the basis for that entitlement.
The court ordered that by 1 October 2015, the applicant file further submissions on the questions of pre-judgment interest, declaratory relief and costs. Entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. By 1 October 2015 the applicant file further submissions on the questions of pre-judgment interest, declaratory relief and costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
When the proceeding was called on for hearing on 14 September 2015 there was no appearance for IRL. Accordingly, Mr Coghill, through his counsel, applied for and was granted leave to proceed in the absence of the respondent, pursuant to r 30.21(1)(b) of the Federal Court Rules 2011 (Cth). In the result, the alleged misconduct was not proved. The only witness who was called was Mr Coghill. He denied the allegations of misconduct and his evidence was not challenged. That evidence was not inherently implausible and I accept it. In all but a few respects, he also made out his claim for damages.THE EVIDENCE IRL’s business included the exploration for minerals of deposits in Cambodia and it held a number of mining licences. It had one wholly owned subsidiary –– Indochine Resources (Cambodia) Limited (“IR (Cambodia)”) –– through which the work was undertaken. All the executive employees were employed by IRL, all other employees by IR (Cambodia). Mr Coghill was one of the directors of IR Cambodia. Mr Coghill was employed by IRL as chairman, company secretary and chief financial officer, pursuant to a written contract. The proposed terms were set out in a letter of offer dated 23 June 2008 addressed to Mr Coghill. Mr Coghill was invited to signify his acceptance by 26 June 2008 by signing and returning to the company an attached copy of the agreement. He did so and the executed contract bears his signature. It also bears the signature of David Evans, who was also a director of IR (Cambodia) and an executive director of IRL. The contract was expressed to be subject to the laws of New South Wales and the parties agreed to submit “to the Courts of this jurisdiction” (cl 14). Mr Coghill was employed for an initial term of five years, commencing from 1 May 2008, renewable with at least six months’ notice “on substantially the same terms” for “perpetuating” five-year periods (cl 1). That is to say, he was employed for an “Initial Term” of five years, which was renewable “on substantially the same terms” for another five years (“The Subsequent Term”) on and from the expiration of the Initial Term, if he so agreed in writing with the company at least six months before the conclusion of the Initial Term. He was to report directly to the board of IRL “and its subsidiaries” (cl 2). Schedule 1 of the contract set out a list of his duties. It read (without alteration):Your duties will include:Direct, staff and organise the accounting and Company Secretarial functions of the Company as required.Directing and assisting in the listing of the company on the ASX and reporting as required to the ASX.Liaising with the Company’s General Manager Asia on the general administration of the subsidiary company.Ensure that accounting and documentation of all transactions are recorded in a satisfactory manner for all companies in the group.Report to the Board of the Company and its subsidiary on a regular basis.Ensure that the company subsidiary Indochine Resources (Cambodia) Limited is funded at all times.Manage the treasury of all funds of the company and its subsidiary.Planning, budgeting and monitoring the costs of the company and its subsidiary.Directing and overseeing the standards of compliance and governance for the Company and its subsidiaries. This includes the Audit, Remuneration and Governance committees.
Decision
Reasons for decision
The substance of IRL’s pleaded case was that Mr Coghill was guilty of serious misconduct entitling the company to terminate his employment without notice or payment in lieu. There is, however, no evidence to support it. Thus, Mr Coghill had an entitlement under the Act to three week’s written notice of the day of the termination of his employment and IRL contravened s 117 of the Act by failing to give him that notice or pay him at least the amount it would have been liable to pay had the employment continued until the end of the minimum period of notice.CONCLUSION It follows that there will be judgment in favour of Mr Coghill. IRL should pay him damages for breach of his employment contract, together with interest.ORDERS Most of the amounts in question are payable in American dollars. Where a defendant owes money to a plaintiff payable in a foreign currency the House of Lords held in Miliangos v George Frank (Textiles) Ltd [1976] AC 443 at 462–3, 497, 500, 502 that judgment could be given in the foreign currency. In PT Thiess Contractors Indonesia v PT Arutmin Indonesia [2015] QSC 123 Jackson J reviewed the authorities and concluded (at [95]) that this was the position in Australia, pointing out that:In Australian and New Zealand Banking Group Limited v Cawood [[1987] 1 Qd R 131] and European Asian Bank Aktiengesellschaft v Katsikalis [[1987] 1 Qd R 45] this court accepted … that it could pronounce judgment in a foreign currency upon a claim to recover a loan made in a foreign currency. Recent statute law relating to the registration of foreign judgments also proceeds on that basis [referring to the Foreign Judgments Act 1991 (Cth), s 6(11)(a) and Uniform Civil Procedure Rules (Qld), r 947E(c)(vii)]. Such a claim is not distinguishable in nature from the plaintiff’s claim in this case; as a further example, Miliangos v George Frank Textiles Ltd was a claim for the price of goods sold in a foreign currency. (Footnotes omitted.) This is the course Mr Robertson proposed in the present case and I am prepared to accept his proposal. Accordingly, IRL should be ordered to pay Mr Coghill USD2,648,112 and AUD10,081, together with interest and costs. The interest component needs to be calculated. For this reason, as foreshadowed during argument, I will not pronounce judgment at this time. The originating application included a claim for declarations in relation to the contraventions of the FW Act but no submissions were made about them or their form. The originating application also included a claim for costs. No submissions were made about this question either. The application was filed in the Fair Work Division. Section 570(1) of the FW Act provides that a court may not make an order for costs against a party to proceedings in a court exercising jurisdiction under the Act save in accordance with subs (2) or s 569 or 569A. In the circumstances I invite further submissions in writing on:(1)the amount of interest to be included in the judgment;(2)whether declarations should be made;(3)if so, the proper form of the declarations; and(4)whether Mr Coghill is entitled to all or part of his costs and, if so, the basis for that entitlement.
Ratio Decidendi
Legal Principle Established
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