Concut Pty Ltd v Official Trustee in Bankruptcy

[1999] HCATrans 428

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B7 of 1999

B e t w e e n -

CONCUT PTY LTD

Applicant

and

OFFICIAL TRUSTEE IN BANKRUPTCY

Respondent

Application for special leave to appeal

GLEESON CJ
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 30 NOVEMBER 1999, AT 11.56 AM

Copyright in the High Court of Australia

MR P.A. KEANE, QC:   May it please the Court, I appear with my learned friend, MR M.W. JARRETT, for the applicant.  (instructed by Hopgood Ganim)

MR J.S. DOUGLAS, QC:   May it please the Court, I appear with my learned friend, MR P. APPLEGARTH, for the respondent.  (instructed by Mullins & Mullins)

GLEESON CJ:   Mr Keane, we have understood the force of the argument that you advance in relation to the merits of the case, but there is a question as to whether the outcome turned upon a very particular factual circumstance.

MR KEANE:   Your Honour, the conclusion to which the Court of Appeal came was that by reason of the entry into a new contract, which, with respect, was not all that new – it simply provided for a term of five years with other provisions in relation to possible extensions – that a new contract was made which had the effect of putting in place something radically different from that which was there before.  That circumstance, in our respectful submission, is no different from any case in which any employee employed under oral or written contract may be promoted, demoted or put into another position on terms as to salary or conditions somewhat different but not necessarily much different.

In our respectful submission, it is indeed a case which raises a question which applies in relation to any contract of employment where a further contract is made to regulate the relationship of trust and confidence which exists between an employer and employee.

KIRBY J:   I may have misread the Court of Appeal’s decision, but I thought it was more tied into the particular terms of the contract of employment in this case and ‑ ‑ ‑

MR KEANE:   Your Honour, the only basis that we can see that – I mean, one understands the point your Honour makes, but ‑ ‑ ‑

KIRBY J:   One reacts with surprise to the outcome of this decision of the Court of Appeal.

MR KEANE:   That was to be one of our first submissions.

KIRBY J:   One reacts with great surprise to it, but the question that worries me is the one the Chief Justice asked as to whether it is such a peculiar contract, and peculiar in a sense that people would enter into a new contract with a particular provision relating to its term and termination, that it is really a rather special case.

MR KEANE:   I am not sure that I am focusing on your Honour’s question but I will try to.  In so far as this contract contains a provision which says that the employee shall serve faithfully and in the event of misconduct during the term is liable to dismissal, in our respectful submission, that provision is no doubt the product of a template.  It is no doubt the product of standard form contracts used throughout the length and breadth of the common law world.  The point of this case is that ‑ ‑ ‑

KIRBY J:   But he did serve faithfully during the term.

MR KEANE:   Quite, and that is the point of this case, that in all those cases throughout the common law world where using that standard form of contract an employer discovers that the person who has entered the new form of contract who has previously served under a different term of contract or perhaps an oral contract, as here, where one discovers that that employee has previously conducted himself in such a way as to be repugnant to the relation of trust and confidence between employer and employee, one cannot terminate the relationship.  Rather, that employee can insist on serving out the balance of the new term.  Now, that is the situation.

KIRBY J:   Well, in an oral agreement it would normally be with a termination determined by the regularity of the payment of wages and, therefore, in 97 per cent of cases the problem does not arise - probably 99 per cent of cases.

MR KEANE:   Well, your Honour, in those cases, of course ‑ ‑ ‑

KIRBY J:   So it is a very small category of cases where there is a written contract and particular terms that have led to the Court of Appeal’s somewhat surprising decision.  Now, why should we get into such a matter?

MR KEANE:   Your Honour, to limit it in the way your Honour suggests is the case, in our respectful submission, is not quite correct.  One needs to appreciate, first of all, that in relation to the general run of contracts we are not concerned with termination by giving the requisite period of notice.  We are talking about termination so that the relevant employee does not remain by the till for the balance of the two weeks or the month of employment.  The other point is that particularly in relation to managerial appointments, one may well be dealing with appointments which last for a longer ‑ ‑ ‑

KIRBY J:   Managers get very large salaries nowadays.

MR KEANE:   And, your Honour, I was really addressing myself to the periodicity point, that it may not be a monthly termination period by monthly salary; it may well be an annual salary.  So that, in our respectful submission, it is not possible to confine this problem to 3 per cent of cases.  It really is all cases where the alternative is between instant dismissal for cause and termination by giving the requisite period of notice and it really is, with respect, every case where a new contract is entered into in circumstances in which there has been conduct under the old agreement inconsistent with the relevant confidence that should continue to subsist, our point being that once the employer discovers it, he is entitled to say, “Well, I discover I have this viper in my bosom.  I am not obliged to continue to embrace it.”

KIRBY J:   Does that derive from the principle of the contract or from something deeper?

MR KEANE:   Your Honour, in our respectful submission – and we have to say there is no authority precisely on point.  We rather regard that as a matter which tends towards the grant of special leave.  While there is no decision precisely on point, there are dicta in the cases that point in the direction which your Honour foreshadows.  For example, in the observations of Justices Dixon and McTiernan cited in the judgment of Justice Shepherdson in dissent here at page 55 of the record, the passage cited from Blyth Chemicals Limited v Bushnell where their Honours spoke of:

“Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty –

and then reading down:

or is destructive of the necessary confidence between employer and employee, is a ground of dismissal.

And then after the citation of authority:

But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence.  An actual repugnance between his acts and his relationship must be found.

And, your Honours, to ‑ ‑ ‑

KIRBY J:   How does one introduce that as a legal concept though?  Does one say, “Well, even if it’s not written it’s implied in the contract?”  Is that how in the theory of contract or in the theory of the relationship it is introduced or is it some equitable principle that ‑ ‑ ‑

MR KEANE:   Your Honour, in the House of Lords it has been identified as an implication protective of the essence of the relationship.  One immediately pauses when one hears the words, “essence of the relationship”, but if we can take your Honours to the manner in which it has been elaborated in the speech, firstly, of Lord Steyn, with whom the other members of the House of Lords agreed, in Malik v The Bank of Credit and Commerce International (1998) AC 20. The relevant passage that responds to your Honour Justice Kirby’s question is in the speech of Lord Steyn at 45D and here, of course, there was the case where the situation was reversed. It was a question of the employees asserting the existence of such an obligation. His Lordship says:

Instead they rely on a standardised term implied by law, that is, on a term which is said to be an incident of all contracts of employment: Scally v Southern Health and Social Services Board [1992] 1 AC 294, 307B. Such implied terms operate as default rules. The parties are free to exclude or modify them. But it is common ground that in the present case the particular terms of the contracts of employment of the two applicants could not affect an implied obligation of mutual trust and confidence.

The employer’s primary case is based on a formulation of the implied term that has been applied at first instance and in the Court of Appeal.  It imposes reciprocal duties on the employer and employee.  Given that this case is concerned with alleged obligations of an employer I will concentrate on its effect on the position of employers.  For convenience I will set out the term again.  It is expressed to impose an obligation that the employer shall not:

“without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee:” ‑ ‑ ‑

GLEESON CJ:   If you enter into a series of contracts with a carrier who once a month carries some goods for you under a separate contract each month and whilst the July contract remains unperformed you find out that there has been a fundamental breach of the February contract, can you rely on that to put an end to the July contract?

MR KEANE:   Your Honour, may we respond by saying that is not this case, the difference being the notion of confidence between employer and employee.  The difference is that the carrier does a job and he has obligations to do the job in a particular way but not obligations which partake of a fiduciary character.  In the case of the employee, he is in a position which partakes of a fiduciary character, at least to that extent, and one of necessary dependence so far as the employer is concerned.  The employer must be able to depend upon him to exercise his capacity to affect the employer’s interests in vital ways with scrupulous honesty to act in the interests of the employer and not to prefer himself.

GLEESON CJ:   Even in an employment relationship is there a distinction between a past breach of contract and a breach of a past contract?

MR KEANE:   Your Honour, our answer to that in this case is that where the breach goes to the destruction of a relationship of confidence and trust, there is no point seeking to make that distinction because, by reason of the destruction of the relationship, the relationship of confidence, the employer ought to be able to dispense with the further service of the employee.

KIRBY J:   There is a case, is there not, that says that where the breach is in the distant past ‑ ‑ ‑

MR KEANE:   Your Honour, quite, and one of the ‑ ‑ ‑

KIRBY J:   ‑ ‑ ‑ then it does not, as it were, infect the relationship.  That is why it seems to me that there is some equitable principle that relates to the fiduciary nature or character of an employer/employee relationship that ‑ ‑ ‑

MR KEANE:   Your Honour, there might well be equitable principles that can be invoked there:  waiver ‑ ‑ ‑

KIRBY J:   Well, they were not argued in this case.

MR KEANE:   No, your Honour.

KIRBY J:   They are just all common law contract here.

MR KEANE:   And, your Honour, because there was no question of long and faithful service, time and unstinting faithful service mending the rupture.  That is one of the oddities, with respect, in this case is that a case in which there was no suggestion of election or affirmation or waiver is a case where their Honours decided it the way they did on the footing that there might in other cases be cases where long service has removed the rupture.  That is not this case.  In this case their Honours accepted the findings as to the misconduct that occurred and the evident gravity of them.  Your Honours will find that at page 35 of the record, lines 770 to 775.

KIRBY J:   The Journal of Contract Law complains endlessly that we never take contract cases into this Court any more.

MR KEANE:   And, your Honour, you get two for the price of one here:  an equity case and a contract case.

KIRBY J:   Yes, but you did not argue equity, so you are stuck with your contract submissions.

MR KEANE:   Your Honour, just to respond to that, the point is, we would submit, that the reasoning of the Court of Appeal in the majority – and your Honours will see this at page 43 lines 985 to 995 – is to say that because there were fresh terms agreed and because one can say, “That is a different contract,” and no doubt it is in a sense, that there has been something done to mend a rupture of the relationship of which the employer was not aware.  Now, we can accept ‑ ‑ ‑

KIRBY J:   Yes, but you could have put in – you were in charge of the contract.  You had the power.  You could have inserted a clause if it should be discovered that there is any failing on the part - or any misapplication of funds or something like that.

MR KEANE:   And, your Honour, like every other employer, using the template standard form contracts that have been used, every other employer who used those standard form contracts, it was not thought necessary to extract a covenant that the employee whose employment was being regularised and regulated by further terms - it was not thought necessary to extract a covenant that that employee had not been robbing us blind.  If your Honour looks at standard form contracts that are used in the books, your Honour will not see such a covenant.

GLEESON CJ:   Thank you.  Yes, Mr Douglas.

MR DOUGLAS:   If the Court pleases.  It is important to be clear about what actually happened at the trial before one considers the special leave points sought to be argued.  Wells was dismissed because of an economic downturn, not because of misconduct.  The examination of whether he had engaged in misconduct came after that dismissal.  The trial was not concerned with the disclosure of past misconduct but whether there was any misconduct in the first place, namely, whether Wells obtained his employer’s approval for the work done on his house or was authorised to make use of employees’ time when there was no other work for them to do.

The circumstances, if any, which might have grounded an obligation to make a disclosure at the time the 1986 contract was being negotiated were not pleaded or explored at trial.  There was no factual examination of what disclosure should or would have been made by him at the time of entering into that contract if this had been an issue on the pleadings.  The case was not one in which it was alleged that past misconduct was concealed.  On the contrary, far from concealing his use of employees on occasions to do work when they had no other work to do, Wells used the prospective son‑in‑law of a director, a man called Smith, who was in the habit of speaking to his future son‑in‑law, and there is no evidence that Wells asked this employee or any other not to reveal what they were doing.

Finally, the supposed duty to disclose past misconduct was not an issue at trial principally because the applicant’s case was conducted on the basis that the misconduct by the use of the employees’ time occurred principally after the relevant contract was made.  It failed on the facts to make out that case because Wells was able to prove that the house was constructed before the contract was made.

It is in that context that one has to examine the claimed special leave points at page 63 of the application book.  The first relates to the employment relationship, the special duty of confidence said to exist, and the applicant says that an employer who, in fact, loses confidence in an employee is entitled to terminate the contract of employment without notice and without compensation at least where the loss of confidence was due to conduct on the part of the employee.  Does your Honour have that page?

KIRBY J:   Yes.

MR KEANE:   The applicant seems to say that an employer who, in fact, loses confidence in an employee because of past misconduct, even misconduct during employment with another employer, is entitled to terminate the contract of employment without notice and without compensation, notwithstanding that the employee dutifully performed that contract and did not breach it.  In short, the applicant contends for an entitlement to terminate, even though there had been no breach of the contract being terminated.

The applicant’s argument, being concerned with effects, namely, the actual loss of confidence, does not depend on when the conduct occurred or even in whose employment the employee was when it occurred.  If, for example, the discovery that an employee had misconducted himself during past employment, for example, by stealing from a previous employer, destroys the new employer’s confidence, then the applicant says that this entitles the employer to terminate a contract which has not itself been breached.

We submit in that context, first, if an employee engages in conduct which amounts to a breach of the employment contract, then the employer has remedies for breach including, in the case of misconduct, the remedy of terminating the contract.  Next, if the employer wishes to enjoy a right to terminate a contract in respect of past misconduct, that is misconduct occurring before the contract came into existence, it must either obtain such a right by express provision or rely upon rights under the general law such as rights arising from misrepresentations made in answer to material questions asked when the contract was being negotiated, a point ‑ ‑ ‑

KIRBY J:   But is there not a bit of a difficulty here?  The majority in the Full Court in the Court of Appeal, though they stress at 45 line 1052 that each case “turns on its own facts”, appear to have stated a general proposition and it is the general proposition that becomes part of the law of Queensland that is left unrepaired by this Court.  That is the matter that worries me.

MR DOUGLAS:   Except that the general proposition your Honour has relied upon is one that is established by authority of the House of Lords and has been relied on for a long time.

KIRBY J:   Well, it may be, but it seems an odd thing that if a person in a second contract who is an employee is found to have acted dishonestly in an earlier contract must be kept in terms of the second contract, given the nature of the relationship of employer and employee.  Now, I cannot quite put my finger on what offends me in that, but it offends my common law bones and seems to require some sort of consideration.  It is an odd result.  Leave aside the peculiar facts of your case; the proposition seems odd.

MR DOUGLAS:   The oddity of the proposition or the result was actually addressed also by Lord Atkin in Bell v Lever Brothers at page 229.

KIRBY J:   Is that the passage quoted at 46?  Is that the case of the ancient misapplication of funds?  That was a case of where it had happened years before and you could mount arguments of waiver or changed situation, passing of time, and so on.  Now, that is not applicable in this case.

MR DOUGLAS:   Not so, but the principle stated by Lord Atkin is applicable in this case and his analysis of what concerns your Honour is.  His Lordship said:

The result is that in the present case servants unfaithful in some of their work retain large compensation which some will think they do not deserve.  Nevertheless it is of greater importance that well established principles of contract should be maintained than that a particular hardship should be redressed; and I see no way of giving relief to the plaintiffs in the present circumstances except by confiding to the Courts loose powers of introducing terms into contracts which would only serve to introduce doubt and confusion where certainty is essential.

GLEESON CJ:   If there is a relationship of employer and employee that exists over 10 years and at the end of 10 years the employee is promoted and for the first time enters into a written contract, there is an element of ambiguity about the proposition that that is a new contract, is there not?

MR DOUGLAS:   There is, but the court found here that there was because of the particular circumstances attending it.  There was a restructure of the company, a management buy‑out, a host of instances which made it clear that the nature of the relationship had significantly changed, and there is no special leave point there.  That is a factual analysis.

GLEESON CJ:   For purposes of long service leave, for example, would service under the previous contract have counted?

MR DOUGLAS:   It may well have, but one would have to look at the terms of the contract. I was saying earlier that where you have a right to terminate in respect of past misconduct an employer must either obtain the right by express provision or rely upon rights under the general law, and Bell v Lever Brothers makes that point.  Can we say in respect of this case that most employment cases do not raise these issues, we suspect for two reasons:  first, the relevant misconduct occurs during the subsistence of the contract which is terminated; and, secondly, in other cases where the employer does lose confidence in the employee, the employee is given notice or paid in lieu of notice.

We do not submit that an employer who, in fact, loses confidence in an employee and who wishes to terminate the employment relationship cannot do so.  The question in such a case is the contractual consequences.  In short, where the employer has not breached the contract, then the employer is required to give reasonable notice.  Where the employee has not breached the contract and the employer does not give reasonable notice, then dismissal terminates the employment relationship, notwithstanding that the contract of employment may continue until the employee accepts the repudiation and puts an end to the contract.

KIRBY J:   But why has not the employee from an earlier contract breached the contract, the new contract, by, as it were, continuing in service without disclosure and as an unfaithful servant, as it would once have been called?

MR DOUGLAS:   Because there is no obligation ‑ ‑ ‑

KIRBY J:   I am testing it not by the facts of this case but by the generality of the principle, which just strikes me as an odd result.

MR DOUGLAS:   I am going to come to that shortly as to the consequences if one introduces a duty of disclosure.

KIRBY J:   Yes, very well.

MR DOUGLAS:   There are oddities either way, your Honour, and good practical reasons why there should not be such a duty imposed and there are remedies, of course, for the employer to either ask relevant questions or insert a clause in the contract which will cover the problem, if there is a problem, faced by the employer.

KIRBY J:   Yes.  I notice that is what the majority said the applicant could have done.

MR DOUGLAS:   Yes, and perhaps finally, along the lines of what I was saying immediately before your Honour asked me the question of whether there is a breach of contract constituting misconduct, then the employer can terminate both the employment relationship and the contract of employment without compensation.  Here there was no breach of the relevant contract by Wells because he engaged in no misconduct during its term.  This was not a case, therefore, in which an employer, having lost confidence in a manager, was able to terminate the contract upon giving a reasonable notice.  It was a fixed‑term contract.  Concut for commercial reasons bargained away its right to terminate upon giving reasonable notice.  It defined the conduct which entitled it to terminate the employment without notice.  Past misconduct was not such a ground.  It could have negotiated to include such a term, but it did not.

So in summary on the question of this destruction of the relationship of confidence, we say that the dicta in Blyth referred to by our learned friend were accepted by the Court of Appeal.  Blyth was not concerned with past misconduct.  For past misconduct to constitute a breach of the relevant contract, the 1986 contract, the contract would have needed to make express provision to this effect.  It did not.  The applicant, in effect, contends for an entitlement to terminate a contract of employment where there has been no breach.

Can I then turn to the question of the duty of disclosure.  Because Wells did not engage in any conduct during the term of the agreement which amounted to misconduct, the applicant ‑ ‑ ‑

KIRBY J:   This must be a relic of Queensland practice to call people just by their surname.  Would you humour me by calling him “Mr Wells”.

MR DOUGLAS:   Certainly, your Honour.  I do not know if it is Queensland practice, but I vary in practice myself, your Honour.  Mr Wells’ situation, as I have explained, in the trial was different from, I suppose, the way the argument has turned out now and it was in the Court of Appeal that this question of non‑disclosure first reared its head.  The authorities, as we have said, are contrary to the proposition that an employee or, for that matter, an employer has a duty to disclose facts material to the decision of the other party whether to enter into the contract or a duty once in a contractual relationship to disclose to the other their own breaches of contract.

There is a recent restatement of the principles in a case we had delivered to the Court late last week.  It is another Bank of Credit and Commerce International Case,Bank of Credit and Commerce International v Ali (1999) 2 All ER 1005. There is a relevant passage at page 1018.

KIRBY J:   I am sorry.  Yes, you were referring to – is this Bank of Credit?

MR DOUGLAS:   Yes, against Ali, not the Malik Case my learned friend referred to.

KIRBY J:   No, no.  We have that.

MR DOUGLAS:   I do not wish to read it out, but there is a relevant passage setting out the rationale for the rule in Bell v Lever Brothers and its appropriateness to modern times in his Lordship’s reasons at page 1018 between letter c and letter h and it goes to the practical consequences of a departure from that rule and can we illustrate that by some examples.

KIRBY J:   Surely it would depend on the nature of the relationship.  You could have a person who is handling mega billions of dollars.  Surely in that case you would be more willing to read in an implied term of disclosure than you would in the case of an ordinary employment such as Mr Wells’ employment.  You cannot have an absolute rule, surely, that you do not have to disclose defalcation, for example.

MR DOUGLAS:   It is a problem, your Honour, once one starts ‑ ‑ ‑

KIRBY J:   Say you are promoted, as the Chief Justice’s example, from a person who is not dealing with big funds but who, as it were, touched the till into a position of great responsibility; surely the common law would imply then some duty of disclosure.  I may be wrong.

MR DOUGLAS:   It does not appear to, your Honour.  It appears to be, again, a case as in general law of contract of caveat emptor.  If you want to find that out, you ask, and if you want to protect yourself against it, you provide for it in the contract.

KIRBY J:   That seems to go to the heart of the faith and trust of the relationship of employer and employee.

MR DOUGLAS:   Well, it depends on whether one tries to import notions of fiduciary relationships into the employment contract and we would submit that they are not imported.  There are categories of fiduciary relationships such as contracts of insurance, agreements as to partnership, other sorts of relationships of trust and confidence which exist.  Now, there may be an implied term, and there is, of course, in the Malik Case, that an employer and an employee owe each other duties of mutual trust and confidence.  In this case Mr Wells did breach that duty and he paid the consequences of it by paying damages on the counter‑claim, but there is ‑ ‑ ‑

KIRBY J:   You are making this sound a very, very interesting case, Mr Douglas.

MR DOUGLAS:   I am sorry about that, your Honour.  But let me get back to the practical reasons why there is not a duty of disclosure.  Is an employee bound to warrant that his or her past life has been beyond reproach?  One would hope not, otherwise very few of us would have a job.  Is, for example, a salesman bound to tell a prospective employer the time he was found to have driven carelessly or when in a previous job he used the telephone for private purposes or took a sick day off to go to see the cricket?  One would think not.  If an employer ‑ ‑ ‑

KIRBY J:   I do not see why not.

MR DOUGLAS:   Well, normal practice would not ‑ ‑ ‑

KIRBY J:   Do not develop that, please.

MR DOUGLAS:   No.  Is a building contractor engaged to do repair work to your Honour’s house obliged to tell your Honour of the fact that somebody regarded his previous job as having been performed negligently, perhaps a building tribunal?  One would think not.  It is a contract between parties at arm’s length.  And if one does try to import an obligation like this into the employment relationship in the absence of a fiduciary relationship, logically it extends to the law of contract generally and the rule of caveat emptor does go.  So for a rather light case like this it is a big ask to try to put on it the burden of carrying such an examination of what is a very fundamental principle in the law of contract.

KIRBY J:   Is it an irrelevant consideration that the decline in the significance of awards and the encouragement of the growth of workplace and individual arrangements will make this area of the law perhaps see a rebirth?

MR DOUGLAS:   Not relevant to the question of whether it is a special leave point.  I mean ‑ ‑ ‑

KIRBY J:   I wonder.  That is what I am asking you.

MR DOUGLAS:   I would not have thought so, your Honour, because the way it is formulated it does not just apply to employment contracts.

KIRBY J:   You see, many matters now cannot be within awards.  They are just a matter of a private bargaining.

MR DOUGLAS:   That is so, yes.

KIRBY J:   So we are going to see, I think, a revival of the common law of contract in employment and that may make this matter of more significance than it would otherwise have been.

MR DOUGLAS:   And it perhaps may make one say with Lord Atkin that certainty is essential in these areas and one does not want loose terms imported where it will lead to great uncertainty in the law and great difficulties in employment of people generally.

There are perhaps are a couple of questions we should touch on in our learned friend’s reply very briefly.  The applicant suggests that our submissions are contrary to Shepherd v Felt & Textiles.  We do not contest the authority of that decision.  In the different context of dismissals which are alleged to be harsh, unjust or unreasonable this Court in Byrne v Australian Airlines indicated that facts which existed at the time of a dismissal but which come to light only subsequently might justify a dismissal that may otherwise be harsh, unjust or unconscionable.  The issue is not the correctness of Shepherd but the application of that principle to the particular case.

As to the subsequent discovery of facts which existed at the time of a dismissal, the relevant inquiry is what conduct is subsequently discovered and whether the conduct entitles the contract in question to be terminated without compensation.  We have addressed those issues.  When one then goes back to consider the question also raised in the reply of the duty to disclose past misconduct, although the applicant contends that there was a failure to remedy past misconduct, that is simply another way of saying there was a duty to disclose it.  Settled principle does not support such a duty.  In this case there was also a remedy for past misconduct, which was given on the counter‑claim.

For the reasons we expressed at the outset having to do with the nature of the trial, in our submission, the case is not a suitable vehicle to review the principles governing the disclosure of past misconduct.  The principle itself was also one that operates sensibly to prevent past sins from forever tainting our futures.  Where an employer needs protection, as we have said, the remedy is to ask the right questions on engaging an employee.  Where the employer needs protection, he can ask the right questions of the employee and negotiate to put sufficient protection in a contract.

This is quite an unusual different case and it is one where the law does provide for a protection for employers sufficient to meet any public policy requirement.  So, in our submission, it is not a case for special leave.

GLEESON CJ:   Thank you, Mr Douglas.  We do not need to hear you, Mr Keane.  In this case there will be a grant of special leave.

AT 12.30 PM THE MATTER WAS CONCLUDED