Cushman & Wakefield (NSW) Pty Ltd v Farrell - [2017] NSWCA 24

Court of Appeal

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: Cushman & Wakefield (NSW) Pty Ltd v Farrell [2017] NSWCA 24
Hearing dates: 6 February 2017
Decision date: 24 February 2017
Before: Macfarlan JA at [1];
Ward JA at [2];
Emmett AJA at [83]
Decision:
(1) Appeal allowed in part.
(2) Order 1 of the orders made on 26 August 2016 be set aside as well as orders 1, 3 and 4 made on 8 September 2016 to the extent that those orders relate to the proceedings in the District Court other than costs of the defendant’s cross-claim.
(3) The Amended Statement of Claim and the Amended Cross-Claim each be dismissed.
(4) Parties to file written submissions (no longer than three pages in length) within seven days on the question of costs of the appeal and in relation to any other orders sought consequent upon this Court’s decision.

Catchwords: CONTRACTS – general contractual principles – construction and interpretation of contracts – commercial context – where clause provides for payment calculated by reference to years of service with a Related Company as defined in Corporations Act 2001 (NSW) – where clause ambiguous in its operation and one construction would produce commercially incongruous outcome
Legislation Cited: Corporations Act 2001 (Cth), s 50
Cases Cited: Dan v Barclays Australia Ltd (1983) 57 ALJR 442
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48
Electricity Generation Corporation v Woodside Energy Limited; (2014) 251 CLR 640; [2014] HCA 7
Jireh International Pty Ltd t/as Gloria Jean’s Coffee v Western Exports Services Inc [2011] NSWCA 137
Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184
McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65
Morton v Elgin-Stuczynski (2008) 19 VR 294; [2008] VSCA 25
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37
Category: Principal judgment
Parties: Cushman & Wakefield (NSW) Pty Ltd (Appellant)
Robert Farrell (Respondent)
Representation:
Counsel:
V Bedrossian (Appellant)
Y Shariff with Ms J Williams (Respondent)
Solicitors:
DLA Piper Australia (Appellant)
Gillis Delaney Lawyers (Respondent)

File Number(s): 2016/00281697
Publication restriction: Nil
Decision under appeal

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Date of Decision:

26 August 2016

Before:

Sorby AJ/DC

File Number(s):

2015/337661

HEADNOTE

[This Headnote is not to be read as part of the judgment]

This judgment relates to an appeal from a decision in the District Court of NSW concerning the proper quantification of a payment due to the respondent (Mr Farrell) on the termination of his employment with the appellant, Cushman & Wakefield (NSW) Pty Ltd (C&W/NSW). The primary judge held that Mr Farrell had been underpaid and was entitled to a further sum of $450,459.14, calculated by reference to his years of service with Laing & Simmons Commercial Pty Ltd (Laing & Simmons).

Mr Farrell was employed by Laing & Simmons from…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NSWCA 24
Decision Date: 24 February 2017

CaseChat Overview and Summary

Cushman & Wakefield (NSW) Pty Ltd appealed to the Court of Appeal of New South Wales against orders made in the District Court concerning a dispute over contractual entitlements. The core of the disagreement lay in the interpretation of a clause within an employment agreement that stipulated payment calculated by reference to years of service with a "Related Company" as defined in the *Corporations Act 2001* (Cth). The appellant contended that one possible construction of this clause led to a commercially incongruous outcome, suggesting an error in the lower court's determination.

The primary legal issue before the Court of Appeal was the proper construction of the contractual clause in question. Specifically, the court had to determine whether the years of service with a related company, as defined by the *Corporations Act*, were to be included in the calculation of the respondent's entitlements under the agreement, and if so, how that calculation should be performed. The ambiguity in the clause's operation and the potential for a commercially unreasonable result were central to the court's task.

The Court of Appeal found that the interpretation favoured by the respondent, which would have resulted in a commercially incongruous outcome, was not the correct one. The court applied principles of contractual construction, emphasising that where a contract is ambiguous, the court should adopt the construction that is most consistent with the commercial context and avoids an absurd or unreasonable result. The appeal was allowed in part, with certain orders of the District Court being set aside, and both the Amended Statement of Claim and the Amended Cross-Claim being dismissed. The parties were directed to file submissions on costs.

Orders

Orders of the court

(1) Appeal allowed in part.

(2) Order 1 of the orders made on 26 August 2016 be set aside as well as orders 1, 3 and 4 made on 8 September 2016 to the extent that those orders relate to the proceedings in the District Court other than costs of the defendant’s cross-claim.

(3) The Amended Statement of Claim and the Amended Cross-Claim each be dismissed.

(4) Parties to file written submissions (no longer than three pages in length) within seven days on the question of costs of the appeal and in relation to any other orders sought consequent upon this Court’s decision.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Cushman & Wakefield (NSW) Pty Ltd v Farrell [2017] NSWCA 24
Hearing dates:	6 February 2017
Decision date:	24 February 2017
Before:	Macfarlan JA at [1]; Ward JA at [2]; Emmett AJA at [83]
Decision:	(1) Appeal allowed in part. (2) Order 1 of the orders made on 26 August 2016 be set aside as well as orders 1, 3 and 4 made on 8 September 2016 to the extent that those orders relate to the proceedings in the District Court other than costs of the defendant’s cross-claim. (3) The Amended Statement of Claim and the Amended Cross-Claim each be dismissed. (4) Parties to file written submissions (no longer than three pages in length) within seven days on the question of costs of the appeal and in relation to any other orders sought consequent upon this Court’s decision.
Catchwords:	CONTRACTS – general contractual principles – construction and interpretation of contracts – commercial context – where clause provides for payment calculated by reference to years of service with a Related Company as defined in Corporations Act 2001 (NSW) – where clause ambiguous in its operation and one construction would produce commercially incongruous outcome
Legislation Cited:	Corporations Act 2001 (Cth), s 50
Cases Cited:	Dan v Barclays Australia Ltd (1983) 57 ALJR 442 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48 Electricity Generation Corporation v Woodside Energy Limited; (2014) 251 CLR 640; [2014] HCA 7 Jireh International Pty Ltd t/as Gloria Jean’s Coffee v Western Exports Services Inc [2011] NSWCA 137 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65 Morton v Elgin-Stuczynski (2008) 19 VR 294; [2008] VSCA 25 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37
Category:	Principal judgment
Parties:	Cushman & Wakefield (NSW) Pty Ltd (Appellant) Robert Farrell (Respondent)
Representation:	Counsel: V Bedrossian (Appellant) Y Shariff with Ms J Williams (Respondent) Solicitors: DLA Piper Australia (Appellant) Gillis Delaney Lawyers (Respondent)
File Number(s):	2016/00281697
Publication restriction:	Nil
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Civil Date of Decision: 26 August 2016 Before: Sorby AJ/DC File Number(s): 2015/337661