Darmody v National Centre Automotive
[2003] FMCA 358
•23 December 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DARMODY & ORS v NATIONAL CENTRE AUTOMOTIVE | [2003] FMCA 358 |
| TRADE PRACTICES – Jurisdiction – statutory limit to awards of damages – claim for damages in excess of the statutory limit – misleading and deceptive conduct – offer of employment not honoured – applicants suffering loss in relying upon the offer and resigning from existing employment. CONTRACT – Employment – offer and acceptance – breach. |
Magistrates Court (Civil Jurisdiction) Act 1982 (ACT), s.230
Trade Practices Act 1974 (Cth), ss.51A, 52, 53B, 82, 86, 86AA
Workplace Relations Act 1986 (Cth), s.170
Agius v Great Western Colliery company [1899] 1 QB 413
Alucraft Pty Ltd (in liq) v Grocon Ltd (No 2) [1996] 2 VR 386
Ammand v Thompson (1979) 25 ALR 91
Antioniou v Karedis Enterprises Pty Ltd (1995) ATPR 41-400
Automatic fire sprinklers v Watson (1946) 72 CLR 435
Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Barto v GPR Management Services [1992] ATPR 40,205
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Byrne v Frew (1995) 185 CLR 410
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Conquest v Ebbetts [1896] AC 490
Cormier Enterprises Ltd v Costello (1980) 108 DLR (3d) 472
Cummings v Lewis (1993) ATPR (digest)
C Czarnikow Ltd v Koufos [1969] 1 AC 350
Czarnikow v Koufos (1969) 1AC 385
Gates v City Mutual Life (1986) 160 CLR 1
GEC Marconi v BHP Information Technology [2003] FCA 50
Hadley v Baxendale (1854) 9 Exch 354
Hammond & Co v Bussey (1887) 20 QBD 79
Henville v Walker (2001) 75 ALJR 1410
Hornsby Building Information Centre Pty Ltd & Anor v Sydney Building Information Centre Ltd (1978) 140 CLR 216
James v ANZ Banking Group Ltd (1986) 64 ALR 347
Johnson v Agnew [1980] AC 367
Johnson v Perez (1988) 166 CLR 351
Lyndel Nominees Pty Ltd v Mobil Oil Australia Ltd (1997) 37 IPR 599
Neilsen v Hempston Holdings Pty Ltd (1986) ATPR 40-686
O’Neill v Medical Benefits Fund of Australia Ltd [2002] FCAFC 188; (2002) ATPR 41-882
Pappas& Anor v Soulac Pty Ltd & Anor (1983) ATPR 40-411
Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191
Radford v De Froberville [1977] 1 WLR 1262
Robinson v Harman (1848) 1 EX 850
Sellard v Adelaide Petroleum NL (1994) 179 CLR 332
Sullivan v Macquarie Pathology Services Pty Ltd (1995) ATPR (digest) 46-143
Sutton v AJ Thompson Pty Ltd (1995) ATPR (digest) 46-143
TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130
Tito v Waddell (No 2) [1977] Ch 106
Wardley v state of Western Australia (1992) 175 CLR 514
Wenham v Ella (1992) 127 CLR 454
| Applicants: | DOMINIC DARMODY KATE BEATON |
| Respondent: | NATIONAL CENTRE AUTOMOTIVE trading as Gregory’s Ford, Braddon |
| File Nos: | CZ39 of 2002 CZ40 of 2002 |
| Delivered on: | 23 December 2003 |
| Delivered at: | Sydney |
| Hearing dates: Date final submissions received: | 7-9 July 2003 5 September 2003 |
| Judgment of: | Driver FM |
REPRESENTATION
| Counsel for the Applicants: | Mr J Purnell |
| Solicitors for the Applicants: | Porters Lawyers |
| Counsel for the Respondent: | Ms A Tonkin |
| Solicitors for the Respondent: | Deacons |
ORDERS
The Court declares that the respondent, through Trevor Steenholdt, breached ss.52 and 53B of the Trade Practices Act 1974 (Cth) in representing to the applicants that they would be employed by the respondent at Gregory’s Ford in Braddon if they resigned their employment with Canberra Toyota at Belconnen.
The respondent is to pay damages to the first applicant, Duncan Beaton, in the sum of $15,657, plus interest up to judgment at the rate of 8.45 per cent from 1 March 2001.
The respondent is to pay damages to the second applicant, Kate Beaton, in the sum of $18,905, plus interest up to judgment at the rate of 8.45 per cent from 1 February 2001.
The respondent is to pay damages to the third applicant, Dominic Darmody, in the sum of $4,000, plus interest up to judgment at the rate of 8.45 per cent from 5 February 2001.
Settlement and entry of these orders may be effected pursuant to order 36 of the Federal Court Rules.
The respondent is to pay the applicants’ costs and disbursements of and incidental to the application in accordance with the Federal Magistrates Court Rules 2001 (Cth) and scale of costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CZ39 of 2002, CZ40 of 2002, CZ41 of 2002
| DOMINIC DARMODY KATE BEATON DUNCAN BEATON |
Applicants
And
| NATIONAL CENTRE AUTOMOTIVE trading as Gregory’s Ford, Braddon |
Respondent
REASONS FOR JUDGMENT
Introduction and background
These are three applications under the Trade Practices Act 1974 (Cth) (“the Trade Practices Act”) and the general law, in the Court’s accrued jurisdiction, filed on 24 December 2002. The three applications were heard concurrently. Each application was supported by a statement of claim filed on the same day in which the applicants allege breaches of ss.52 and 53B of the Trade Practices Act as well as a breach of contract. During the course of the hearing of the matters, and having regard to the decision of the Full Federal Court in O’Neill v Medical Benefits Fund of AustraliaLtd [2002] FCAFC 188, I permitted the applicants to rely upon s.51A of the Trade Practices Act (subject to a possible issue of costs due to late notice) and to allege equitable estoppel. I intended that an amended statement of claim would be filed to specifically plead estoppel, but the applicants have not taken that opportunity. The submissions of both parties are silent on it. I also ordered a second respondent, Janrule Pty Ltd, to be joined as a respondent to the applications.
On 5 September 2003, on the application of Janrule to be removed as a respondent, I ordered that Janrule be removed as the second respondent, and permitted the applicants to file a further amended application in consequence of that removal.
With minor differences, each of the applicants alleges that they were induced to resign their employment at the Canberra Toyota car dealership at Belconnen on the basis of representations by Trevor Steenholdt, dealer principal of Gregory’s Ford car dealership at Braddon, that if the applicants resigned they would be employed at Gregory’s Ford at Braddon. It is now common ground that at the relevant time the respondent carried on business under the name Gregory’s Ford at Braddon. Janrule conducted (and continues to conduct) the business of Canberra Toyota at Belconnen. It follows that the applicants allege that they were induced by Mr Steenholdt’s representations to give up employment at one business conducted by Janrule in the expectation of being employed at another business conducted by the respondent.
The applicants allege that the representations were misleading and deceptive in that Mr Steenholdt subsequently denied making any offers of employment and refused to employ the applicants. Alternatively, the applicants assert that contracts of employment were entered into on 8 or 9 January 2001, that it was a condition of the contracts of employment that the applicants would resign their pre-existing employment at Canberra Toyota, and that the contracts were breached.
The respondents admit that certain discussions took place between the applicants and Mr Steenholdt and his son early in January 2001 about the possibility of future employment by the applicants at Gregory’s Ford. However, the respondents deny that any offer of employment was made by Mr Steenholdt. They further deny that any misleading or deceptive representations were made by Mr Steenholdt.
The evidence
The applicants rely upon their own affidavits. Duncan Beaton and Kate Beaton also rely upon an affidavit by Paul O’Donnell filed on 4 July 2003 as to the value and sale of their house property at Evatt in the ACT.
The respondents rely upon affidavits by Trevor Steenholdt, Alex Whitecross and Francis Fletcher filed in each application. I ruled that the affidavits filed in each application be received as evidence in all three applications. I also gave leave for oral evidence to be taken from Mr John Starke, the dealer principal of Canberra Toyota, who was subpoenaed to appear as a witness by the applicants. Again, Mr Starke’s evidence was received as evidence in all three applications.
Duncan Beaton
Duncan Beaton deposes that he began working at Canberra Toyota early in 2000. He deposes that on 8 January 2001 he had a conversation with Trevor Steenholdt in which Mr Steenholdt offered him a position at Gregory’s Ford as new car sales manager on condition that Mr Beaton resigned from his then current job as sales manager at Canberra Toyota, Belconnen. Mr Beaton deposes that Mr Steenholdt said that the particulars of the new job could be worked out later, but that he offered Mr Beaton a car as part of the job remuneration. Mr Beaton deposes that during this conversation he told Mr Steenholdt that he would like his partner Kate Beaton to work with him and that Mr Steenholdt represented to Mr Beaton that there would also be a position for Kate Beaton at Gregory’s Ford. Mr Beaton deposes that Mr Steenholdt also asked if Mr Beaton could recommend anyone to take up a position as second in charge of new car sales and that Mr Beaton recommended Dominic Darmody. Mr Beaton deposes that Mr Steenholdt asked him to get Kate Beaton and Dominic Darmody to call him.
Mr Beaton deposes that he subsequently spoke to Kate and Dominic and asked them to ring Mr Steenholdt to discuss the proposed offers.
Mr Beaton deposes that on the strength of the representations made to him by Mr Steenholdt he tendered his resignation to John Starke at Canberra Toyota, Belconnen. He deposes that John Starke asked him if he was going to Gregory’s Ford and told him that he would not be employed by Trevor Steenholdt. Mr Beaton deposes that he then went to Gregory’s Ford and spoke to Trevor Steenholdt who told him that his starting date would be 22 January 2001. Mr Beaton deposes that at this point Mr Steenholdt gave him a motor vehicle as part of his employment package. He deposes that he discussed salary with Mr Steenholdt who stated that his salary would be $40,000 per annum plus $40 per car sold and delivered.
Mr Beaton deposes that on 9 January 2001 he and Kate Beaton drove to Gregory’s Ford where Trevor Steenholdt introduced them to his son Shane Steenholdt as well as to Alex Whitecross and to Annette Fletcher. He deposes that the start date of 22 January 2001 was confirmed. Mr Beaton also deposes as to a telephone conversation between him and Dominic Darmody on 9 January 2001 in which Mr Darmody told him that Shane Steenholdt had offered him an employment package that he was considering. Mr Darmody said to Mr Beaton that Mr Steenholdt had made it a condition that Mr Darmody must resign his existing position first. Mr Beaton deposes that he recommended to Mr Darmody that he accept the position.
Mr Beaton deposes that on 17 January 2001 Mr Steenholdt telephoned him to advise him that there would be a meeting the following day between him and John Starke as well as the two directors of the respondent and Janrule, Mr Dennis Aitken and Mr Nick Polites in relation to the three applicants’ employment. Mr Beaton deposes as to a further telephone conversation between him and Trevor Steenholdt on 19 January 2001 during which Mr Steenholdt stated that the meeting had been put off until 23 January 2001 and that John Starke had spoken to Dennis Aitken who had told Steenholdt that no staff could be “poached” from Canberra Toyota, and that the company would not transfer or accept staff from Canberra Toyota to Gregory’s Ford. Mr Beaton deposes that during this conversation Mr Steenholdt asked him to defer his starting date until after 22 January 2001.
Mr Beaton deposes that on 23 January 2001 he telephoned Trevor Steenholdt again who stated that the three applicants could not be employed at Gregory’s but that he might be able to reconsider the position in a few weeks. Mr Beaton deposes that he retained the car that had been provided to him until late February 2001 and that he did not find alternative employment until March 2001. Mr Beaton deposes as to his income since then.
In a supplementary affidavit filed on 23 June 2003 Mr Beaton provides additional evidence of his alleged losses, including losses claimed on the sale of the house property of himself and his partner at Evatt.
In oral evidence Mr Beaton augmented his affidavit evidence and gave evidence in reply to the respondents’ affidavits in which he disputed the statements made in those affidavits. Mr Beaton stated that Trevor Steenholdt gave him a Ford Fairmont Ghia as part of his employment package on 9 January 2001 which he estimated was worth about $40,000. He gave evidence that he was not asked to sign any documentation relating to the provision of that motor vehicle, although he had previously been required to sign documentation at Canberra Toyota in relation to an employee motor vehicle. However, Mr Beaton admitted that on or about 19 January 2001 Mr Steenholdt said words to him to the effect that he could not employ him even if he had wanted to because of the objections raised by John Starke.
Under cross-examination Mr Beaton stated that he knew Trevor Steenholdt from the time when he joined Canberra Toyota in late 1999 or early 2000 when Mr Steenholdt worked at the same dealership. Mr Beaton stated that Mr Steenholdt left Canberra Toyota around June 2000 to take up his present position at Gregory’s Ford. Mr Beaton was pressed by Ms Tonkin about the asserted details of his discussions with Mr Steenholdt. Mr Beaton showed some uncertainty as to how the job negotiations between him and Mr Steenholdt had commenced and when they had commenced. Mr Beaton conceded that the process may have commenced on 5 or 6 January 2001 and that it may have been him who instituted the process then. He also admitted that at the time he tendered his resignation to John Starke on 9 January 2001 he had not been honest to John Starke about his intentions. Mr Beaton said that he had been advised by Mr Steenholdt not to say where he would be going.
Mr Beaton resisted attacks upon his credibility in relation to his assertions about the representations that were made to him by Mr Steenholdt. However, he made material admissions in relation to his assertions of loss. Mr Beaton admitted that he had suffered two injuries relevant to an assessment of loss. Mr Beaton admitted that he had broken his ankle early in February 2001 and that the cast had not been removed until late February in that year. This had limited, but not eliminated, his earning capacity for about four months. Mr Beaton also admitted that he had also broken his left arm around 6 September 2001 and that he had been off work because of that injury until 27 December 2001. Mr Beaton also stated that in December 2001 he resumed employment at Canberra Toyota. Mr Beaton further conceded that he had some dissatisfaction in his job at Canberra Toyota, Belconnen in late 2000 and this was a factor causing him to approach Mr Steenholdt about alternative employment.
Mr Beaton was pressed by Ms Tonkin about his asserted loss arising from the sale of his house property. Mr Beaton conceded that after the sale of the house he and his partner moved down to the South Coast for lifestyle reasons and that they subsequently took an extended overseas trip to the United Kingdom. Mr Beaton also conceded that, apart from periods during which he was injured and was on holiday overseas, he was employed. Mr Beaton’s claims that the sale of his house was a forced sale and that he had difficulty obtaining employment following the refusal of employment at Gregory’s Ford suffered some credibility damage under cross-examination.
Kate Beaton
Kate Beaton deposes that on 8 January 2001 Duncan Beaton told her that he had spoken to Trevor Steenholdt who had offered him a position of sales manager of new cars at Gregory’s Ford, Belconnen and that Trevor Steenholdt had a job for her and wanted her to call him. She deposes also that Duncan Beaton had told her that he had recommended Dominic Darmody for a job at Gregory’s Ford as well. She deposes that on or about 8 January 2001 she rang Trevor Steenholdt who confirmed that he had discussed the sales manager job with Duncan Beaton and that if she was interested, she could sell fleet vehicles and support the business manager when he was away. She deposes that Mr Steenholdt was not specific about her remuneration and that she should trust him. She deposes that Mr Steenholdt said to her, “trust me, I will look after you”. She deposes that Mr Steenholdt said that Duncan Beaton should call him after he resigned from Canberra Toyota.
Ms Beaton deposes that she handed in her resignation to John Starke on 9 January 2001 at the same time as Duncan Beaton. She deposes as to the same conversation with John Starke as was claimed by Duncan Beaton and also deposes that subsequently on the same day, she drove with Duncan Beaton to Gregory’s Ford and met Trevor Steenholdt. He introduced his son and Alex Whitecross, and subsequently Annette Fletcher. She deposes as to a brief conversation she had with Ms Fletcher. She deposes that Trevor Steenholdt offered her a car but that she declined the offer as Mr Steenholdt had already given Duncan Beaton a car. She deposes that she and Duncan stated they could start work on 22 January 2001.
Ms Beaton deposes that the job at Gregory’s Ford did not eventuate, due to the intervention of John Starke, Nick Polites and Dennis Aitken and that she was unemployed for a few weeks before gaining employment at McGrath Ford. She deposes that in June 2001 Duncan Beaton and she moved to Bateman’s Bay and that she did not work from June 2001 until September 2001, when she gained employment at Flack’s Auto Mart. Ms Beaton deposes that she left Bateman’s Bay in December 2001 and took up employment again at Canberra Toyota, Belconnen, where she still works. She deposes as to her alleged loss.
In oral evidence in chief Ms Beaton provided additional evidence about the job offer she says was made to her and gave evidence in response to the respondent’s evidence.
Under cross-examination Ms Beaton resisted attacks upon her credibility in relation to the alleged offer of employment at Gregory’s Ford but made material concessions relating to the sale of the home at Evatt which tended to confirm that the sale of the home had more to do with a change in lifestyle desired by her and Duncan Beaton, rather than an inability to meet mortgage commitments. Ms Beaton stated that she regarded herself as unemployed from mid January 2001, as it became clear to her that the job at Gregory’s Ford was not going to eventuate. She conceded that she was unemployed by choice between June and September 2001 and she wished to spend time with her daughter.
Dominic Darmody
Dominic Darmody deposes that he was employed at Canberra Toyota from about 11 May 1998 and that on or about 8 January 2001 Duncan Beaton told him that there was a position available for second in charge of used cars at Gregory’s Ford, Braddon and that he should telephone Trevor Steenholdt to discuss the position. He deposes that Duncan Beaton told him that Trevor Steenholdt had offered Beaton a job as the new car sales manager and that Kate Beaton would also be moving to Gregory’s Ford as fleet manager. Mr Darmody deposes that on 8 January 2001 he telephoned Trevor Steenholdt and enquired about the position of second in charge of used cars. He deposes that Trevor Steenholdt quizzed him as to why he wanted to move and that he advised Mr Steenholdt that the job on offer was a “step up” in that he wanted to earn more money. He deposes that Mr Steenholdt asked him to ring his son to arrange a time to see Shane regarding the job. He deposes that he arranged a meeting with Trevor and Shane Steenholdt in the afternoon of 9 January 2001.
Mr Darmody deposes that on 9 January 2001 he attended a staff meeting at Canberra Toyota, Belconnen at which staff were told by John Starke that Duncan Beaton and Kate Beaton had resigned. Mr Starke asked Mr Darmody if he knew where the Beatons were going to work and he replied (untruthfully) that he did not know. Mr Darmody deposes that after leaving work that day at Canberra Toyota he had a meeting with Shane Steenholdt alone. He deposes that at that meeting Shane advised him how to resign his position at Canberra Toyota so as not to arouse suspicion as to where he was going. He deposes as to a general conversation with Shane Steenholdt about his employment package at Gregory’s Ford.
Mr Darmody deposes that on or about 10 January 2001 at approximately 10.30am Duncan Beaton called him to tell him that he had spoken with Trevor Steenholdt and that “everything was fine”. Mr Beaton suggested to Mr Darmody that he should go ahead and resign and call Beaton when he had done so. Beaton also advised that he would drive Darmody to Gregory’s Ford to pick up Darmody’s new car as part of his employment package. Mr Darmody deposes that he then went to Canberra Toyota and handed in his resignation. He deposes that John Starke said to him, “You’ll never work for Ford and neither will Duncan or Kate”. He deposes as to a fairly acrimonious conversation between him and John Starke and that he then packed up his possessions and left the premises.
Mr Darmody deposes that he and Duncan Beaton then drove to Gregory’s Ford at Braddon in Mr Beaton’s Fairmont Ghia and that Trevor Steenholdt then provided him with a work vehicle. He deposes that Trevor Steenholdt advised that he could start on 29 January 2001 after the “dust settled”. He deposes that a Ford Futura car was provided to him.
Mr Darmody deposes that on Saturday, 13 January 2001 Trevor Steenholdt rang him and had a conversation to the effect that “all shit’s hit the fan”. He deposes that Mr Steenholdt said to him:
Things aren’t looking good, I’ll have to call you after the meeting with Nick Polites and Dennis Aitken on Thursday (18 January 2001) to sort all this out. If I can’t hire you I’ll resign myself. I’ve had a gutful of Starke and all his bullshit.
Mr Darmody deposes that on Tuesday 22 (sic) January 2001 Trevor Steenholdt returned a telephone message he left for him and advised that Dennis Aitken had made a decision that staff were not able to transfer across. He deposes that Trevor Steenholdt stated that there was no job and that he felt bad about it. He deposes that Mr Steenholdt told him he could hang on to the car until Steenholdt told him that he needed it back. He deposes that he returned the car on or about 5 February 2001 in response to a request from Mr Steenholdt.
On Thursday 25 January 2001 Mr Steenholdt suggested that Mr Darmody contact Lennock Motors about a job. Mr Darmody attended an interview but rejected the position due to inadequate remuneration. Mr Darmody deposes that he gained employment with National Capital Motors on 5 February 2001 and gives evidence as to his asserted loss.
In his oral evidence Dominic Darmody stated that he now worked at Canberra Toyota, Belconnen once again and that he was a very successful salesman in that position. By way of evidence in reply he denied the affidavit evidence on behalf of the respondents in that that conflicted with his own evidence.
Under cross-examination Mr Darmody admitted that Mr Steenholdt had warned him that he could only be considered for employment if he resigned from Canberra Toyota. He confirmed that he acted on advice from Duncan Beaton on 10 January 2001 that he should resign. He admitted that if he had known the warning that John Starke had given to Duncan Beaton the day before he would have thought more about his resignation before he had tendered it. In response to a question from me Mr Darmody stated that if he had not received that advice from Duncan Beaton he would have sought confirmation from Trevor Steenholdt about the employment offer before resigning. Mr Darmody resisted attacks upon his credibility under cross-examination. He impressed as a frank and open witness.
Trevor Steenholdt
Mr Steenholdt describes himself as the dealer principal of the respondent. He was in fact the dealer principal of the respondent at the business known as Gregory’s Ford, Braddon. He is one of a number of dealers principal at the various car dealerships now operated by Janrule in Canberra.
In relation to the affidavit of Duncan Beaton Mr Steenholdt denies that he made a “certain offer” to Mr Beaton to a position at Gregory’s Ford and he denies making any similar representation to Kate Beaton. He denies stating that the applicants would start work on 22 January 2001, as no position at Gregory’s Ford had been offered to him. Mr Steenholdt deposes that he “lent” a car to Mr Beaton but that the vehicle was not part of an employment package. He deposes that the car loan was made until such time as he and Mr Beaton might be able to discuss the possibility of Mr Beaton’s employment. Mr Steenholdt states:
I offer loan cars to people at no expense on a regular basis.
Mr Steenholdt deposes that at Gregory’s Ford it is also his standard practice not to offer a vehicle as part of a package to new employees until they are either well into, or have completed their probation period. He denies that he gave Mr Beaton an employment package. He denies telling Mr Beaton what his salary would be because he did not offer a position to Mr Beaton. He admits introducing Mr Beaton and Kate Beaton to Shane Steenholdt and Alex Whitecross. He does not recall whether he introduced them to Annette Fletcher. He denies introducing them as employees of Gregory’s Ford.
Mr Steenholdt deposes that he did say to Mr Beaton and Kate Beaton words to the following effect:
If I put you on, when would you be able to start?
Mr Steenholdt admits that he was interested in employing Mr Beaton and Kate Beaton at a later date but says that he had not decided to do so. He denies informing them that they had position with Gregory’s Ford.
Mr Steenholdt admits discussing a company board meeting with Mr Beaton but denies that the meeting was one called in relation to the applicants. He says it was a regular board meeting. Mr Steenholdt deposes that on 22 January 2001 he said to Mr Beaton:
I cannot employ you even if I wanted to.
Mr Steenholdt says that by this, he meant that because of the issues raised by John Starke he had been told by the directors of the first respondent that he would be unable to employ, transfer or poach Mr Beaton, Kate Beaton or Dominic Darmody. Mr Steenholdt denies saying that Mr Beaton might get a job in a few weeks. He says that he told Mr Beaton:
Let me see what happens in the future and we’ll go from there.
By this Mr Steenholdt means that he was still interested in employing Mr Beaton in the future. He deposes that he thought that perhaps if Mr Beaton worked somewhere else for a while and let the dust settle he might be able to offer him a position sometime in the future when the fuss caused by John Starke had died down.
In relation to the affidavit of Kate Beaton, Mr Steenholdt denies discussing either a business manager or fleet vehicles position with Ms Beaton. He admits being interested in the possibility of employing Ms Beaton at a later stage but states that to his knowledge she had only worked in after market sales. Mr Steenholdt denies the statements attributed to him by Kate Beaton.
In relation to the affidavit by Dominic Darmody, Mr Steenholdt states that he said to Mr Darmody that he should ring his son and organise a time to see him but he denied suggesting that Mr Darmody organise a time to see Shane regarding a job because he did not offer a job to Mr Darmody. Mr Steenholdt deposes that he was responding to an enquiry about employment made by Mr Darmody. Mr Steenholdt denies that there was a position at Gregory’s Ford equivalent to the position Mr Darmody held at Canberra Toyota. Mr Steenholdt says that he loaned a second hand motor vehicle to Mr Darmody consistent with his general practice. He denies that this was part of an employment package. He states that the vehicle loaned to Duncan Beaton was also a second hand loan car. He denies offering any position to Mr Darmody at Gregory’s Ford and he denies putting an employment package, either orally or in writing, to Mr Darmody. He denies discussing with Mr Darmody his employment responsibilities. He denies the statements attributed to him by Mr Darmody. Mr Steenholdt states that there was no agreement for Mr Darmody to start work at Gregory’s Ford on 29 January 2001.
Mr Steenholdt deposes that he told Mr Darmody what he told to Mr Beaton, namely that he could not offer employment even if he had wanted to because of the “situation”. Mr Steenholdt states that he gave Mr Darmody a reference to assist him to attempt to gain employment at Motors. Mr Steenholdt deposes that he was aware that John Starke would make a fuss if he employed people directly from Canberra Toyota and that, accordingly, he told Mr Darmody on a number of occasions that he could only consider him for a position if he first resigned from his then position at Canberra Toyota. He denies that he offered Mr Darmody a position on the condition that he resign from Canberra Toyota. He deposes that at no stage prior to or after Mr Darmody’s resignation from Canberra Toyota had he made up his mind to employ Mr Darmody.
Mr Steenholdt was, unfortunately, a most unimpressive witness when he gave oral evidence. His evidence was vague, contradictory and unpersuasive. In chief, he repudiated what he had said in his affidavit about being employed by the first respondent and stated that he was employed by Janrule. Ms Tonkin sought to introduce evidence of an employment contract entered into with a Mr Wright by Mr Steenholdt. I permitted a voir dire to be conducted on this evidence and Mr Steenholdt’s answers I accepted as evidence in the case. His answers established that in relation to Mr Wright, Mr Steenholdt acted inconsistently with what he said on affidavit was his normal employment practice. In particular, he admitted giving to Mr Wright and employment car on his first day. He admitted also offering Mr Wright a job without entering into a formal employment contract at that time. I accepted Mr Wright’s employment contract as an exhibit: R8.
Mr Purnell pressed Mr Steenholdt under cross-examination concerning his relationship with Mr Starke. Mr Steenholdt claimed that Mr Starke hated him because he (Steenholdt) had refused to work for him and he also claimed that Mr Starke was professionally afraid of him. In relation to his employment arrangements at Gregory’s Ford Mr Steenholdt contradicted himself three times. He admitted attending a board meeting of the respondent or Janrule in late January 2001 at which he was told by the directors that he could not employ the applicants.
Mr Purnell pressed Mr Steenholdt on his conduct in making motor cars available to Mr Beaton and Mr Darmody. He eventually admitted that this conduct was inconsistent with company practice and that he had exposed himself to a potential insurance liability. He denied that the cars were made available as part of an employment package. He claimed that he was totally disinterested in the resignation of the applicants from their employment at Canberra Toyota. He claimed that when the applicants attended Gregory’s Ford he made loan vehicles available to them as a simple act of altruism.
Mr Steenholdt made the mistake of denying outright virtually every suggestion put to him by Mr Purnell in cross-examination. He ended up contradicting his own affidavits on the question of whether he had considered employing the applicants in January 2001. When the conflict with his affidavits was presented to him Mr Steenholdt accepted that his oral evidence was false and reverted to his affidavits.
Mr Purnell suggested to Mr Steenholdt that he was an unadulterated liar. Mr Steenholdt denied it. In response to a question from me Mr Steenholdt denied that he felt any sense or guilt or obligation towards the applicants when he refused to employ them. Mr Steenholdt also, in response to a question from me, stated that at the company board meeting he denied poaching the applicants and denied recruiting or attempting to recruit the applicants from Canberra Toyota.
Annette Fletcher
Annette Fletcher is an employee of the respondents at Gregory’s Ford, Braddon. She is the personal assistant to Mr Steenholdt. Ms Fletcher deposes that Duncan and Kate Beaton did attend Gregory’s Ford early in January 2001 and that she was introduced to Mr Beaton. She states that she was not introduced to Kate Beaton because she already knew her. She deposes as to a short conversation with Kate Beaton in which Kate Beaton said:
I might be here doing some fleet work and some after market work.
Ms Fletcher denies that the Beatons were introduced to her as employees at Gregory’s Ford. She states that she had no knowledge at the time that the applicants were to be employed at Gregory’s Ford.
Under cross-examination, Ms Fletcher contradicted the evidence given by Mr Steenholdt concerning the position of Mr Wright. Mr Steenholdt had asserted under cross-examination that there was no position available to offer Mr Beaton because the relevant position was already occupied by Mr Wright. Ms Fletcher gave evidence that the position of new car sales manager of Gregory’s Ford was, at the relevant time, occupied by Alex Whitecross but that he was only performing the duties for that position on a temporary basis in conjunction with his other responsibilities.
Alex Whitecross
Mr Whitecross is the business manager at Gregory’s Ford, Braddon. He has worked there since 11 April 1994. He is responsible at Gregory’s Ford for the finance section of the business. Mr Whitecross deposes that in early January 2001 he was introduced to Duncan and Kate Beaton in the office of Trevor Steenholdt. He denies that the Beatons were introduced to him as employees of Gregory’s Ford and denies any knowledge at the time that Duncan and Kate Beaton were to be employed at Gregory’s Ford.
Under cross-examination Mr Whitecross admitted that he was relying upon his memory and that his memory could be faulty. He impressed as a frank and honest witness. He contradicted the evidence of Ms Fletcher in that he stated that as of 9 January 2001 he was not the new car sales manager.
John Starke
I permitted Mr Starke to be called on behalf of the applicants and to give oral evidence. Mr Starke is a senior figure in the motor trades industry in the ACT and controls dealerships which account for about 50 per cent of new car sales in the ACT. At all material times he was the dealer principal at Canberra Toyota. Mr Starke stated that he had known Mr Steenholdt for 14 years and that they had first met when they worked in the car sales industry in Sydney. Mr Starke stated that both Gregory’s Ford and Canberra Toyota are now operated by Janrule. Mr Starke stated that his relations with Mr Steenholdt had soured in around June 2000 at the time that Janrule had purchased Gregory’s Ford from the Cusack Group. Because of difficulties with Toyota Australia it had been arranged that Mr Steenholdt, rather than Mr Starke, would be dealer principal at Gregory’s Ford but that, in reality, Gregory’s Ford would be controlled by John Starke. However, on the day of settlement of the purchase, Mr Steenholdt had reneged on the agreement and in the circumstances Mr Steenholdt was able to extract a variation to the agreement whereby he would work independently as dealer principal at Gregory’s Ford. Mr Starke denied hating Mr Steenholdt and denied being frightened of him.
Mr Starke stated that he became concerned in the latter half of the year 2000 about Mr Steenholdt recruiting staff from dealerships controlled by Mr Starke. He stated that he objected in principle to this practice because it was bad for the company (Janrule). As Janrule controlled directly or indirectly all of the relevant dealerships the poaching of staff from within dealerships controlled by the company would impose an additional cost on the company. This was because staff would normally only move from one dealership to another if they received better remuneration. Mr Starke stated that in early January 2001 when Duncan and Kate Beaton resigned he suspected that they had been poached by Mr Steenholdt and confronted Mr Steenholdt about it. He also stated that he raised the issue at a company board meeting in late January and, in response to his concerns, the company adopted a “no poaching” policy. Under cross-examination, Mr Starke said that he was furious with Mr Steenholdt at the time but admitted that Mr Steenholdt had denied offering employment to the applicants at the board meeting. Nevertheless, Mr Starke said that Mr Steenholdt had been told by the directors at the board meeting words to the effect:
For God’s sake, if you want to poach somebody do it from another dealership, not one of ours.
Mr Starke said that the applicants were all excellent employees and he was angry to lose them in January 2001. Now that they had returned to Canberra Toyota he was happy with their performance and Mr Beaton in particular was performing exceptionally well.
A number of documents were also tendered in the proceedings. At the conclusion of the trial of the matter I called for the company record of the board meeting in late January 2001. I also called for a copy of the anti poaching policy and employee car policy of Janrule. What I actually received was a copy of a standard form of agreement used by Janrule for the provision of a courtesy vehicle to a customer, and a statutory declaration dated 5 August 2003 by Denis Alan Aitken and George Polites that as directors of both the respondent and Janrule they attended a company meeting during January 2001 during which the matter of poaching staff by Mr Steenholdt was raised by Mr Starke. They state that they verbally (orally) directed Mr Steenholdt that “those staff of Janrule Pty Ltd were not to be employed by [the respondent] at that time”. By letter dated 30 July 2003 the solicitor for Janrule informed the Court that this discussion was not included in the minutes of the meeting. I already had received as evidence a copy of the Janrule instructions to employees about the use of company vehicles (exhibit A2).
Submissions
The applicants filed the following written submissions in support of the applications on 23 June 2003:
Contract
1. On 8 or 9 or 10 January 2001 conditional offers of employment were made to each of the plaintiffs.
2. The condition in short was that the plaintiffs resign from their current employment. All plaintiffs accepted that offer and resigned pursuant to the agreement.
3. (a) Duncan Beaton and Dominic Darmody were given motor vehicles in pursuance of the conditional offer of employment.
(b) Kate Beaton was offered a vehicle but declined.
(c) Darmody took possession of a Ford Futura on 10 January 2001.
(d) Duncan Beaton took possession of a Ford Fairmont Ghia on 9 January 2001 [return of car was 4-6 weeks later]
4.(a) Dominic Darmody was to start as second-in-charge (2IC) of used cars at Gregory’s Ford Braddon on 29 January 2001.
(b) Duncan Beaton was to start as New Car Sales Manager on 22 January 2001.
(c) Kate Beaton was to start in fleet car sales on 22 January 2001.
5.All the applicants resigned from their then jobs pursuant to the offer and representations made by the defendant.
6.The defendant breached the contract by failing to provide employment to the plaintiffs.
7. It is a notorious fact of Australian commercial life that many contracts of significance to individuals are concluded orally. What is clear here is that there was an offer that was accepted. One only has to ask the question, namely, why would each of the plaintiff’s resign and why did the defendant offer and give motor vehicles. The explanation in reply is a powerful submission FOR the plaintiffs.
Damages
8.(a) The onus of proof of damages rests on the plaintiffs. The loss must be caused by the defendant’s breach.
(b) In contract in general terms damages are assessed so as to protect the plaintiff’s expectation of receiving the defendant’s performance Wenham v Ella (1992) 127 CLR 454 at 471. Gibbs J after referring to the rule in Hadley v Baxendale (1854) 9 Exch 354 and the dicta of Lord Reid in Czarnikow v Koufos (1969) 1AC 385 with approval. Phrases considered with approval on that the damages which the plaintiff ought to receive are those:-
i) that arise naturally from the breach in a fair and reasonable way;
ii) that may reasonably be supposed to have been in the contemplation of both parties as the probable result of the breach;
iii) that are recoverable if its occurrence was a serious possibility.
9.Finn J in a very recent case of GEC Marconi v BHP Information Technology [2003] FCA 50 said at para 933.
There is no real dispute between the parties as to the principles governing the proper measure of contractual damages. … Those principles I would state for present propose as follows:
Principles
(a) The general principle governing the measure of damages for breach of contract is that where a party sustains a loss by reason of such a breach that party is, so far as money can do it, to be placed in the same situation with respect to damages as if the contract had been performed: Robinson v Harman (1848) 1 EX 850 at 855; Wenham v Ella (1972) 127 CLR 454 at 471; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64.
(b) The usual rule is that damages for breach of contract are assessed as at the date of the breach: Amann Aviation, above, at 161-162;Cheshire and Fifoot, Law of Contract, para 23.24 (8th Aust ed). “[T]his rule is not universal”: Johnson v Perez (1988) 166 CLR 351 at 355; and if following it would give rise to injustice, the court may fix such other date as is appropriate in the circumstances to give the innocent party the amount in damages which will most fairly compensate that party for the wrong suffered: Johnson v Agnew [1980] AC 367 at 400-401; Johnson v Perez, above, at 355-356. A common example of another date being fixed is where, after one party fails to provide goods or services, the other party thereafter seeks or proposes to seek substitute performance and claims damages for the cost of such doing: eg: Radford v De Froberville [1977] 1 WLR 1262; Cormier Enterprises Ltd v Costello (1980) 108 DLR (3d) 472; Conquest v Ebbetts [1896] AC 490; Chitty on Contracts, vol 1, paras 27-014, 27-052 (28th ed).
(c) If a contract was a profitable one (proof of the likelihood of which rests on the innocent party: Amann Aviation, at 80), but was terminated for breach or repudiation, the profits lost and the costs actually and reasonably incurred in performance are proper subjects of compensation: Amann Aviation, at 81, 99, 134-135. If the contract was a loss making one, the innocent party’s recovery will be limited to the extent (if at all) to which expenditure would have been recouped through continued performance: Amann Aviation, at 99.
(d) If the innocent party can establish expenditures which would not have been sustained, or other detriments which would not have been suffered, but for the breach or repudiation, damages for those losses will be recoverable (subject to the remoteness rule): Amann Aviation, at 128; Carr v J A Berriman Pty Ltd (1953) 89 CLR 327; TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd (1963) 180 CLR 130. As was said in Tito v Waddell (No 2) [1977] Ch 106 at 332:
if the plaintiff can establish that his loss consists of or includes the cost of doing work which in breach of contract the defendant has failed to do, then he can recover as damages a sum equivalent to that cost.
(e) Loss or damage will not be recoverable if it is too remote, the tests of remoteness being those stated in what are described as the two limbs of Hadley v Baxendale (1854) 9 Ex 341 at 354. For present purposes those tests can be expressed in the statement of principle formulated by Lord Reid in C Czarnikow Ltd v Koufos [1969] 1 AC 350 at 385 and which has been adopted in this country: see Baltic Shopping Co v Dillon (1993) 176 CLR 344 at 368:
The crucial question is whether, on the information available to the defendant when the contract was made he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation.
(f) The question whether a loss was of a kind that should have been within the contemplation of the party in breach commonly arises where property or services the subject of a contract is/are being acquired for a particular use or for resale by the innocent party and loss is suffered because that use or resale is prevented, delayed or can only reasonably be secured by substituted performance. In such cases the contract can give rise to two separate expectations, the one being receipt of the promised performance, the other being the putting of that performance to some particular use: see Trietel, Law of Contract, 831 (8th ed); Greig and Davis, The Law of Contract, 1379; McGregor on Damages, paras 279-280 (16th ed); and see eg Alucraft Pty Ltd (in liq) v Grocon Ltd (No 2) [1996] 2 VR 386 at 389ff. As McHugh J observed in Amann Aviation, at 163:
In such a case, a plaintiff may be able to recover for both moneys expended and loss of profit, although great care needs to be taken that double counting does not occur.
On the rule against “double recovery” see generally Tilbury, Civil Remedies, vol [13027] ff.
(g) In cases of back-to-back or relational contracts, one particular species of damages of some importance. It is that which arises where one party’s breach of, for example, a sub-contract puts the other party to that contract in breach of the head contract as, for example, for breach of warranty or for delayed delivery: see eg Agius v Great Western Colliery Company [1899] 1 QB 413. Where legal proceedings are taken under the head contract against the party so put in breach and damages and costs are recovered against it, that party may in turn (subject to considerations of remoteness) recover those damages and costs in proceedings under the sub-contract against the party in breach as part of its damages occasioned by the breach: Hammond & Co v Bussey (1887) 20 QBD 79; see generally, McGregor on Damages, para 758ff, para 769ff (16th ed); Jacobs, Damages in a Commercial Context, [6.54]; Burrows, Remedies for Torts and Breach of Contract, 154-155 (2and ed); for the quite different situation that obtains where earlier proceedings are brought between the same parties, see Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1.
10.Here of course the plaintiff’s claim damages beyond the date of breach on the obvious ground that if that was not done obvious injustice would arise. This has to be tempered by the court accepting that the plaintiff’s losses were properly mitigated to minimise the consequential loss. This we claim we have reasonably and responsibly done.
Trade Practices
11.(a) The test for “misleading”, “deceptive” is whether the conduct/statement would leave one ordinary member of the public likely to appraise the conduct or read the statement to be influenced by it into error or alternatively “capable” of leading people into error.
(b) The test if objective:-
Ammand v Thompson (1979) 25 ALR 91
(c) The plaintiffs must prove that the deceptive misleading conduct came about because of the conduct of the defendants. Hornsby (1978) 140 CLR 216.
(d) There is no need to prove a mental element for s.52 purposes.
(e) It is essential for the plaintiffs who seek damages to prove they relied on the conduct and that this reliance caused damage: Pappas (1983) ATPR 40-411
12.(a) In O’Neill v Medical Benefits Fund of Australia Ltd (2002) ATPR 41-882 the Court accepted that the applicant’s loss, where misleading conduct had caused him to leave secure employment for a position which turned out not to be secure, could be assessed as follows:-
One way that loss could be quantified would be to ascertain the difference (if any) between the salary he would have been earning in employment with National Mutual and the income he then received in the position with MBF and in the employment he entered or might enter after being made redundant by MBF. The damages would be the difference over the period it was likely Mr O’Neill would have stayed in employment with National Mutual.
(b) The standard of proof is that the applicant must prove that it has suffered loss or damage on the balance of probabilities: Sellard v Adelaide Petroleum NL (1994) 179 CLR 332. While the amount of damage must be proven with certainty, this only requires that the amount of damage be proven with as much certainty as is reasonable in the circumstances: O’Neill v Medical Benefits Fund of Australia Ltd.
Quantum
13.The quantum claimed for each plaintiff is set out in their affidavits.
Further written submissions were filed on behalf of the applicants on 11 August 2003 but amended submissions were filed on 18 September 2003 following the removal of Janrule as a respondent. Those amended submissions, including the schedule of damages filed on 11 August 2003, are as follows:
In addition to the applicants’ written submissions dated 23 June 2003, the Applicants now submit as follows:
Quantum
Duncan Beaton
1. The applicant was offered the position with Gregory’s Ford as ‘New Car Sales Manager’ by Mr Trevor Steenholdt on 8 January 2001. At that time, it was agreed between Mr Steenholdt and the applicant that, in this position, the applicant would earn a base salary of $40,000.00 plus a further $40.00 per car sold and 2% of the gross car sales per month.
2. On average, a yard would sell 40 cars per month earning the applicant $1,600.00 for his unit sales and $1,200.00 for his percentage profit. In total, the applicant would therefore have been able to earn a total of $73,600.00 or $6,133.33 per month.
3. Due to the actions of the respondent, the applicant was unable to find further employment until March 2001. This means he was unemployed for 12 weeks.
4. In March 2001 the applicant suffered a broken ankle. He did, however, find a position with Belconnen Cars and Boats as a salesperson earning approximately $3,000.00 per month. He continued working in that position until 3 July 2001.
5. During this period, the applicant and his wife had financial commitments of at least $1,068.72 per week. Their total combined income for that period was $840.00 net per week. Please refer to exhibit “A9”. As a result, they listed their home known as 3 Read Place, Evatt for sale.
6. The property was sold in July 2001 for $242,000.00.
7. In June 2001, the applicant and his wife moved to Bateman’s Bay, New South Wales and began work with Flacks Auto on 4 July 2001, again as a salesperson. His previous employer at Belconnen Cars and Boats arranged this position. He continued to work at Flacks until 5 September 2001 when he broke his arm. During this period, his total earnings were $4,880.00.
8.It was submitted by the applicant, that the move to the coast was a life-style change and a financial decision needed after their recent experiences.
9.The applicant and his wife then moved back to Canberra where he was unemployed until 27 December 2001. It is the applicants’ contention that if he was working as a sales manager and not a sales person, he would have been able to continue with his employment as he is not required to drive in that position.
10.On 27 December 2001 the applicant was re-employed with Canberra Toyota. However, he was not re-employed in his old position as sales manager, but as a sales person. His actual earnings over that period were $15,610.00 or $2,601.66 per month.
11. From June 2002 to August 2002 the applicant travelled to Scotland.
12. When the applicant returned to Australia in August 2002 he was given the sales manager position at Canberra Toyota. He continues in this position and is earning approximately $70,000.00 per annum. Being a base salary of $36,500.00 plus commission.
13. The applicant’s property would sell in today’s market for approximately $380,000.00 to $420,000.00.
14.The applicant’s exact losses are set out in the schedule attached hereto and marked with the letter “A”. It is reasonable to say that the losses arise naturally from the breach in a fair and reasonable way. It is also reasonable to say that this now places the applicant in the position he would have been in, but for the respondent’s breach.
Kate Beaton
15. On 8 January 2001, the applicant was offered the position with Gregory’s Ford in ‘Fleet Sales and Finance’ over the telephone, by Mr Trevor Steenholdt. In this position, the applicant would have been able to earn a base salary of $28,000.00 plus commission, being approximately $73,000.00.
16. Prior to the respondents breach, the applicant was working in aftermarket sales at Canberra Toyota, earning $28,000.00 and a further $250.00 per vehicle on aftermarket sales. Therefore, in total, the applicant was earning a total of $73,000.00 or $6,083.33 per month.
17. Due to the actions of the respondent, the applicant was unable to find further employment until February 2001. This means she was unemployed for 4 weeks.
18. In February 2001 the applicant then gained employment with McGrath Ford, in aftermarket sales only, earning approximately $450.00 per week, including commission. She remained there until June 2001.
19. During the period beginning March 2001, the applicant and her husband had financial commitments of at least $1,068.72 per week. Their total combined income for that period was $840.00 net per week. Please refer to exhibit “A9”. As a result, they listed their home known as 3 Read Place, Evatt for sale.
20. The property was sold in July 2001 for $242,000.00.
21.In June 2001, the applicant and her husband moved to Bateman’s Bay, New South Wales. She did not find employment until 5 September 2001 when she was employed by Flacks Auto Mart earning approximately $550.00 per week gross.
22. It was submitted by the applicant, that the move to the coast was a life-style change and a financial decision needed after their recent experiences.
23.On or about 27 December 2001, the applicant and her husband moved back to Canberra and she was re-employed, but only in sales, by Canberra Toyota earning approximately $37,000.00 per annum.
24.From June 2002 to August 2002 the applicant and her husband went to Scotland.
25. Upon her return from Scotland, the applicant returned to her position at Canberra Toyota earning approximately $37,000.00 per annum.
26. The applicant’s exact losses are set out in the schedule attached hereto and marked with the letter “B”. It is reasonable to say that the losses arise naturally from the breach in a fair and reasonable way. It is also reasonable to say that this now places the applicant in the position she would have been in, but for the respondent’s breach.
Dominic Darmody
27. On 9 January 2001, the Applicant was offered the position with Gregory’s Ford as ‘second in charge of used car sales’ by Mr Shane Steenholdt. It was assumed, and noted at that time by the applicant, that he would be earning a base salary of $32,000.00 plus commission. Commission would have been $25.00 per vehicle sold by any member of the sales team, being an average of 30 cars per month. Therefore, the applicant would have been able to earn $77,000.00 per annum or $6,416.66 per month.
28.As a result of the respondents actions, the applicant was unable to find suitable employment until 5 February 2001. This means he was unemployed for four weeks.
29.On 5 February 2001, the applicant gained employment with National Capital Motors in used car sales. In this position, he was earning $4,500.00 per month.
30.For the 2001-2002 financial year, the applicant earnt $58,500.00.
31.The applicant has now earned a promotion at National Capital Motors and his earning approximately $77,000.00.
32.The plaintiff’s exact losses are set out in the schedule attached hereto and marked with the letter “C”. It is reasonable to say that the losses arise naturally from the breach in a fair and reasonable way. It is also reasonable to say that this now places the applicant in the position he would have been in, but for the respondent’s breach.
Schedule of Damages – Duncan Beaton
Period Per Month Total Loss
Able to Earn $6,133.33
10 January 2001 to March 2001
Actual Earnings: Unemployed Nil $6,133.33 x 3 $18,399.99
March 2001 to June 2001
(broke ankle) but able to work as Sales Manager
Actual Earnings $3,000
per month loss of $3,133.33 x 4 $12,533.32
4 July 2001 to 5 September 2001
actual earning: $4,880
able to earn $12,266.66 $7,386.66
6 September to 27 December 2001
(Broken arm) still could have worked in position as sales manager
actual earnings: unemployed: nil $6,133.33 x 4 $24,533.32
27 December 2001 – June 2002
(Janrule P/L at Canberra Toyota employed in sales only)Actual earnings earning of $15,610 for 6 months,
or $2,601.66 per month
Loss of $3,531.67 per month $3,531.67 x 6 $21,190.02
June 2002 – August 2002
In Scotland
August 2002 – continuing
In position as Sales Manager – similar wage
Sub Total $84,043.31
Plus Superannuation @ 9% x $84,043.31 $7,563.89
Sale of House
Commission $9,130
Conveyancing $758.30
Capital Gain $128,000TOTAL LOSS CLAIMED $229,495.50
PLUS interest
Plus loss of vehicle January 2001 to February 2001
Schedule of Damages – Kate Beaton
Period Per Month Total Loss
Able to Earn $6,083.33
10 January 2001 to February 2001
Actual Earnings: Unemployed Nil $6,083.33 $6083.33
February 2001 to 30 June 2001
Actual Earnings $1,800 per month
loss of $4,283.33 x 5 $21,416.65
1 July 2001 to 5 September 2001
actual earning: unemployed: nil $6,083.33 x 3 $18,249.99
able to earn $12,266.66 $7,386.66
September to December 2001
actual earnings: $2,200 per month $3,883.33 x 4 $15,533.32
December 2001 – June 2002
Employed at Canberra Toyota $37,000paLoss of $37,000pa or $3,000 per month $3,000 x 6 $18,000
June 2002 – August 2002
In Scotland
August 2002 – continuing
Loss of $36,000pa or $3,000 per month
August 2002 – June 2003 $3,000 x 10 $30,000
Sub Total $109,283.29
Plus Superannuation @ 9% of $109,283.29 $9,835.49
TOTAL LOSS CLAIMED $119,118.78
PLUS interest
Schedule of Damages – Dominic Darmody
Period Per Month Total Loss
Able to Earn $6,416.6610 January 2001 to 5 February 2001
Actual Earnings: unemployed: nil $6,416.66 $6,416.665 February 2001 to 30 June 2001
Actual Earnings $4,500 $1,916.66 x 5 $9,583.301 July 2001 to 30 June 2002
Actual earnings: $58,500pa
Able to earn $77,000 $18,500Sub Total $34,499.96
Plus superannuation @ 9% of $52,999.96 $3,104.99TOTAL LOSS CLAIMED $37,604.95
PLUS interest
Plus loss of vehicle January 2001 to February 2001
Limited written submissions were filed on behalf of the respondent on 1 July 2003. The following written submissions were filed on behalf of the respondent on 17 October 2003 which substantially expand upon the initial submissions:
A. Liability
A1. Breach of contract
Each of the applicants has the onus to prove that a contract conditional upon their resignation was offered to each of them by Trevor Steenholdt on behalf of NCA and that by resigning each applicant accepted unequivocally a firm offer of employment. It is submitted that each applicant has failed to discharge the requisite evidentiary onus and in so far as reliance is placed on breach of contract, each application should be dismissed. On any analysis of the evidence the causes of action as set out in the second amended statements of claim are not made out.
No offer of employment to Mr Beaton prior to his resignation
2. Mr Steenholdt alleged that Mr Beaton:-
· Telephoned him on 5 or 6 January;
·Told him he wasn’t happy at Canberra Toyota and was ready to leave;
· Said “I’m sick of working for John Starke”;
· Said “I hate the guy”
· Said “We all want to leave, me, Kate and Dominic”
· Said “Can you get us jobs?” (t/script p.34 ln 1-13)
(See also t/script p.195 - 196)
3.Mr Beaton denied he telephoned Mr Steenholdt on 5 or 6 January (t/script p.33 ln 25) he denied he told him that he was unhappy and ready to leave (t/script p.34 ln 2-4) (though Mr Beaton conceded that he was unhappy with particular aspects of the way the company was running etc) (t/script p.34 ln 13-15)). Mr Beaton made no reference to any conversation on 5 or 6 January or prior to 8 January 2001 in his affidavit (see paragraph 3). He deposed to a telephone conversation on 8 January when “Trevor offered me the job of new car sales manager and informed me I had to resign from my current job as sales manager” and “particulars can (sic) be worked out later.”
4.Mr Beaton denied he asked for jobs for himself, Kate and Dominic (t/script p.34 ln 10-12) and denied he phoned Trevor on 5 or 6 January (t/script p.36 ln 9-11). He later changed his evidence and said there were discussions between Trevor and me prior to 8 January “Trevor had bandied it around for a while” (t/script p.37 ln 1-3) however he said he couldn’t recall anything that was said during the earlier discussions but rejected the matters put on instructions by Mr Steenholdt including “can you get us jobs” (t/script p.39 ln 15).
5.Mr Beaton changed his evidence and said firstly he was offered the job of new car sales manager on 5 or 6 (t/script p.41 ln 3-4) but was not given any precise details about the job (t/script p.41 ln 10). He later said he was offered the job twice (t/script p.41 ln 15-17). Mr Beaton said the only details he was given on 8 January 2001 was “it would be better than what I’m (sic) on and would discuss it the following day” (t/script p.41 ln 20-25). He did not recall if Trevor offered anyone else a job on 8 January (t/script p.42 ln 8-9).
6.Mr Beaton said in his affidavit and to his Counsel that he and Mr Steenholdt discussed particulars of his salary ($40,000 p.a. plus $40 per unit sold and delivered). He contradicted this evidence in cross examination and said that on 8 January he was told he would be given a job “better than what I was currently on and that we’d discuss it the following day” (t/script p.41 ln 18-26). No further terms and conditions of any contract were discussed. He later said that terms were discussed (i.e. $40,000 p.a. and $40 per unit sold) on 9 January 2001 after he had resigned. Having regard to this evidence there was no breach of a conditional contract as on Mr Beaton’s own version terms were not discussed until 9 January 2001 (t/script p.56 ln 20 -24).
7.Mr Steenholdt alleged that on 5 January 2001 he employed John Wright as “new car, fleet, government sales manager” (t/script p.196 ln 8 – 9) and tendered into evidence a signed contract of employment in support of this contention (exhibit R8).
Issues of credit
8.Mr Beaton said in February 2000 he was offered the position of “second in charge” not “car sales manager with Canberra Toyota” (t/script p.30 ln 10). He later said that he was employed “in the position of sales manager” on probation for the period February to May 2000 (t/script p.32 ln 12).
9.He said that the contract of employment (in February 2000) “was not presented to me (and signed) when I accepted the position …….these (referring to the documents) are all on the day of commencement of employment” (t/script p.31 ln 6-8). He later said that he signed the contract of employment in front of the company solicitor …”it was through the induction process…that was used ….when I started” (t/script p.31 ln 17-18) but he could not recall if the day he started was 28 February 2000 (the date the contract was signed). He had previously told his Counsel “once the position was accepted by myself the car was given to me pretty well immediately” (t/script p.14 ln 10-11) and that he was given the car “before the documents were signed” (t/script p.14 ln 20-26).
Motor vehicle as part of a package
10.Mr Beaton’s said he did not go through a probation period at Canberra Toyota before getting a vehicle (as part of his package) (t/script p.20 ln 24-25). He said in early 2000 when he was employed he was given a car before the induction process (t/script p.27 ln 19). He said “a package is offered and if you accept it you start and the paperwork’s done at a later date” (t/script p.22 ln 5-8). He said in relation to his contract of employment (exhibit R1) those documents were not presented to me when I accepted the position immediately. He changed his evidence and said he signed the paperwork on 28 February but that was not his first day of employment…..He was not given a car before that date “for legal reasons” (t/script p.33 ln 5-15). It is submitted that Mr Beaton lied on oath regarding the practice of receiving a motor vehicle as “part of a package.” It is submitted that the Court should not elevate the loan of a motor vehicle to a term of a contract in the absence of any other evidence. It may be inferred that Mr Steenholdt intended to make good a promise to find employment for the applicant but was prevented from doing so by the action taken by John Starke.
Subsequent offer of employment – terms and conditions
11.Mr Beaton changed his evidence about the alleged starting date with Gregory’s Ford first alleging that when he attended the premises on 9 January 2001 he was told (by Mr Steenholdt) that his starting date was 22 January 2001 (t/script p.50 ln 9-14 and Duncan Beaton’s affidavit) and then later saying that he was given the date over the telephone (t/script p.50 ln 24-27) a suggestion he made for the first time in cross examination. Notwithstanding the attempt to rectify this issue in re‑examination Mr Beaton’s evidence was patently false.
12.He confirmed that on 19 January 2000 Mr Steenholdt telephoned him and said “I cannot employ you even if I wanted to” (t/script p.26 ln 23-27). It is submitted that if any contract is found to exist then it was at this point that the contract was repudiated. Mr and Mrs Beaton took a week’s holiday and were in Jindabyne on 19 January 2001. This is consistent with what they told John Starke they were going to do.
13.Mr Beaton said he had two interviews for the position in February 2000 (t/script p.30 ln 15). It is submitted that this was normal practice for the formation of a contract of employment in the industry and the discussions which took place on 9 January 2001 were of a preliminary nature and subject to a second interview and a written contract being offered.
14.Mr Beaton agreed that he was aware of the applicable termination provisions whilst employed with Canberra Toyota (t/script p. 32 ln 1-2) which are identical with the termination provisions in the contracts offered by Gregory’s Ford. Any contract could therefore be terminated on giving the required notice.
15.In summary Mr Beaton’s evidence reveals that:-
There were no agreed terms or conditions in relation to any employment contract between Mr Beaton and Gregory’s Ford prior to Mr Beaton’s resignation. He had a reason for leaving John Starke as he was unhappy at “the way things were run.” The conversations between Mr Beaton and Mr Steenholdt prior to 9 January 2001 constitute no more than an invitation to treat or offer to further discuss or negotiate a future contract of employment. There was no offer and acceptance of a contract on 9 January 2001. No written contract was entered into and no formal interview process took place. If the Court finds that a contract was formed on 9 January 2001 this was after Mr Beaton had resigned. If the Court finds that Mr Steenholdt repudiated the contract on 19 January 2001 (prior to any commencement) then at best damages should be assessed in accordance with the required periods of notice. Mr Beaton’s second amended statement of claim in relation to contract must fail.
No offer of employment to Kate Beaton
16.Kate Beaton agreed that prior to 9 January 2001 Mr Steenholdt had not said that he could only consider her for a position if she resigned from Canberra Toyota (t/script p.171 ln 14 – 16). The first she was aware that there may be a job for her at Gregory’s Ford was through her husband (t/script p.174 ln 3-4). She said in her affidavit that Duncan had said to her “Trevor had a job for her too” (affidavit paragraph 5). She said Mr Steenholdt had said “I cannot offer you the business manager’s job…..if you are interested you can sell fleet vehicles…” (affidavit paragraph 5). However she agreed that she had not spoken to Mr Steenholdt since he had left in June 2000 (t/script p.175 ln 1-4) and that in June 2000 the only experience she had was in after market sales (and she says “new cars”) (t/script p.174 ln15 – 25).
17.In evidence in chief she said ‘Trevor did discuss the fleet position with me. He didn’t discuss a business manager’s job.” (t/script p.163 ln 9-11). Later in response to a question from Mr Purnell she said “I agree that he didn’t discuss fleet manager or business manager because they are not the jobs he was offering me. He had offered me fleet sales and finance.” (t/script p.164 ln 11-14). Later in cross-examination she said she had not advised Mr Steenholdt she was interested in the business manager’s job (t/script p.175 ln 15 – 25) and could not explain why he would say he was not offering her the job as business manager and said “somewhere in the discussions on the telephone Trevor asked me what I was doing…” (t/script p.176 ln 9 -12). She agreed that no terms and conditions about any employment were discussed prior to her resignation (t/script p.164 ln 15-20). She said he didn’t put the job in writing for her at all (t/script p.165 ln 3-4). She said she “knew (she) wouldn’t be able to find a job within that group” (which included Gregory’s Ford) (t/script p.161 ln 1-6). Trevor Steenholdt denied that any conversation as alleged took place. He said he had just employed a person to sell fleet vehicles and Kate Beaton had no experience in that area.
18.Kate Beaton’s evidence at its highest is that prior to her resignation she was offered the job of “fleet sales and a bit of finance” without any discussion about terms and conditions. That evidence should be rejected. She had no experience in that area, she was aware that if she resigned she would not get employment with any dealership John Starke was associated with including Gregory’s Ford, she said she resigned “due to unforeseen circumstances” where in fact she “told John (she) was leaving due to promises not realised that were made to me by him” (t/script p.160 ln 19-20). On Kate Beaton’s own evidence none of the particulars set out in the second amended statement of claim were discussed prior to her resignation. In fact no terms and conditions were discussed at all and no job offer in writing was made. There were no subsequent discussions about particulars of employment. Kate Beaton’s second amended statement of claim in relation to contract must therefore fail.
19.No offer of employment to Dominic Darmody
In relation to Dominic Darmody no offers of employment were made by Mr Trevor Steenholdt conditional upon his resignation. Nor is it asserted by Mr Darmody that Mr Trevor Steenholdt made any offer of employment prior to his resignation. Mr Darmody claims that Shane Steenholdt discussed future employment with him prior to his resignation on 10 January 2001 from Canberra Toyota (affidavit paragraph 7). Mr Darmody said that the reason he resigned was because “six or seven different sales managers (had resigned) during his two and a half years” at Canberra Toyota (t/script p.133 ln 19-23). No terms and conditions were discussed. He agreed that he was told not to resign by Shane Steenholdt “until (Shane) called him tomorrow.” (t/script p.137 ln 24-30). He did not contact either Trevor or Shane Steenholdt before resigning on 10 January 2001. He said Duncan Beaton called him on 10 January 2001 and said he had spoken with Trevor and “everything was fine and he should go ahead and resign.” (affidavit paragraph 10). This evidence does not appear anywhere in Duncan Beaton’s affidavit nor did he offer it in oral evidence. Mr Darmody said (somewhat surprisingly) he was unaware of the threat made to the Beatons regarding future employment (t/script p.136 ln 1-8).
20.Duncan Beaton was not authorised by Trevor or Shane Steenholdt to convey any offer of employment (conditional or otherwise) to Mr Darmody as no offer of employment had been made by Trevor Steenholdt. It is submitted that Mr Darmody resigned because he was dissatisfied with the general running of Canberra Toyota. No offer of employment conditional or otherwise was made to Mr Darmody on the basis of his resignation. To the contrary he was advised not to resign until he had spoken to Shane Steenholdt. No particulars of employment were discussed with Mr Darmody after he resigned from his employment with Canberra Toyota. Further, if one accepts the evidence of John Starke, Dominic Darmody had asked for the position made available by Duncan Beaton’s resignation but John Starke had said “his ability wasn’t ready at that stage” (t/script p.307 ln 13-16) and his oral application was rejected. This evidence remains uncontradicted.
Implied Terms and conditions – termination clause
21.In the absence of any formal contract the actual terms of the contract must first be inferred before any question of implication arises. No contractual terms were discussed with any of the applicants prior to each resigning. In the event that the Court rejects the respondents contention as set out above, it is submitted that where “the parties have not spelled out all the terms of their contract but have left some or most of them to be implied or inferred some terms may be implied by established custom and usage, other terms may satisfy the criterion of being so obvious that they go without saying…..” (Byrne v Frew (1995) 185 CLR 410 at 442). The High Court held that in the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach (Byrne v Frew at 422 - 423).
22.An award regulates what would otherwise be governed by Statute. It is unnecessary that the contract of employment should provide for those matters already covered by (an) award (Supra at 421). It is submitted that if a contract is said to exist then the custom that the parties would agree was part of their bargain would be a termination clause. It is submitted that the applicable terms and conditions are those set out in the Industry Award (exhibit R10). The relevant clause set out in the award includes a probation period of 3 months and thereafter 1 weeks notice by either employer or employee who has no more than 1 years experience. In the event that the award is not accepted it is submitted that a reasonable period of notice for termination would be between four to six weeks. It should be noted that each of the applicants tendered their resignations without notice and each resignation was accepted and effective immediately.
No breach of contract by Mr Steenholdt
23.The respondent contends that there was no offer of employment prior to each of the applicants resigning. None of the applicants advised Mr Starke that they had been offered employment with Mr Steenholdt. Each of the applicants claimed to be unaware of the animosity between the men. Mr and Mrs Beaton resigned due to unforeseen circumstances. Both expressed unhappiness in working at Canberra Toyota. Both intended to have a holiday which they did. Both had been involved in family law matters. Mr Darmody expressed his decision to resign as a hard one involving a lengthy process. He had just returned from holidays. He expressed concern at the resignation of Mr Beaton and the frequency of resignations of new car sales managers over the preceding two and a half years. If that evidence is to be believed none of the applicants were telling John Starke the truth.
24.The evidence of Mr Steenholdt should be preferred. He contends that following the approach by Duncan Beaton he indicated a willingness to discuss future employment opportunities. He attempted to find Dominic Darmody employment with Lennock Motors (t/script p.150 ln 2-8) and indicated his intention to make good his promise to discuss future employment “after the dust settled.” He was prevented from employing any of the applicants by John Starke.
Evidence of John Starke
25.In January 2001 John Starke was dealer principal of Canberra Toyota owned by Janrule Pty Limited. Trevor Steenholdt was dealer principal of Gregory’s Ford owned by National Capital Automotive Pty Limited. He said on the day of settlement (of the Gregory’s Ford dealership) Trevor had told Nick Polites that he would not work for me in any way (t/script p.302 ln 15-22). He said he was not aware of any reason as to why Trevor Steenholdt would not want to work with him…they had had “a very close relationship for upwards of 10 years (t/script p.302-303). He said that although his and Trevor’s relationship had soured “he had not done anything to cause a change in the relationship” (t/script p.303 ln 17-18) and had never felt threatened by him challenging his authority.
26.He confirmed in cross examination that he was telling the truth and there was no reason whatsoever why Mr Steenholdt would not have wanted to work for him (t/script p.314 ln 1-5). He then changed his evidence and agreed that in January 2000 there was a reason why Mr Steenholdt did not want to work for John Starke and that Trevor had put those reasons in writing (t/script p.315 ln 16-20) (exhibit R11)
27.Regarding the Ford dealership and the fact that Mr Steenholdt runs the operation he said he had no feeling about Trevor running his own show (t/script p.318 ln 17-25). He then agreed that he was furious with him (t/script p.318 ln 29). He said he had never interfered with Gregory’s Ford (t/script p.320 ln 1-5) but later agreed that at sales meeting prior to January 2001 he advised staff that they need not bother applying for jobs with Gregory’s Ford because they wouldn’t get one.
28.He agreed that none of the applicants had said they had been offered jobs at Gregory’s Ford and that he (John Starke) had made that assumption (t/script p.320 ln 24-25). He agreed Mr Beaton had responded “are you threatening me?” when told he wouldn’t get a position at Gregory’s Ford. He agreed that he was going to make sure Mr Beaton would not get a position with Gregory’s Ford and he made sure they did not by involving the directors (t/script p.322 ln 1-5). A non poaching policy was introduced at the instigation of John Starke following the director’s meeting.
29.It is submitted that Mr Steenholdt behaved appropriately at all times as dealer principal or as agent for NCA. The applicants were free to seek alternate employment if they wished and to make enquiries about future employment prospects with Gregory’s Ford. It is submitted that this is what occurred and that no contracts were entered into prior to the resignation of the applicants. If the Court finds that conditional contracts were entered into by each of the applicants then it was due to the unilateral action of John Starke that the contracts were frustrated in that he prevented employees of Janrule from applying for and accepting employment with NCA.
30.No minute was produced into evidence by John Starke. Mr Aitken deposed on 5 August 2003 that in January 2001 a meeting of directors was held and during that meeting “the matter of poaching of staff by Mr Steenholdt of NCA was raised by John Starke of Janrule and we did verbally direct Mr Steenholdt that those staff of Janrule were not to be employed by NCA at that time.” Mr Starke agreed that Mr Steenholdt denied poaching staff or offering anyone any employment. (t/script p.322 ln 1-5). Any failure to make good a promise had nothing to do with Trevor Steenholdt. It is submitted that each of the claims alleging breach of contract, should be dismissed.
A2.Breach of s.51A, s.52 and s.53B of the Trade Practices Act
31.In Barto v GPR Management Services [1992] ATPR 40,205 Justice Wilcox said that “the conduct of a corporation in the course of negotiations for the employment of …staff is conduct potentially falling within section 52.” In James v ANZ Banking (1986) 64 ALR 347 Toohey J summarised the position in relation to forecasts or predictions under s.52:
2. The mere fact that representations as to future conduct or events do not come to pass does not make them misleading or deceptive…;
…3. Nevertheless a statement relating to the future may contain an implied statement as to present or past fact. It may represent impliedly that the promisor has a present intention to make good the promise and it may represent impliedly that he has the means to do so…..
……If the meaning contained in or conveyed by the statement is false in that or in any other respect, there will have been a contravention of s.52…
32.There was no challenge to the evidence of Trevor Steenholdt that at the time he made the representation to Duncan Beaton (to discuss employment in the future) that he had a present intention to make good his promise (perhaps on his evidence in the more distant future). As such, it is apparent that on either case there was no intention to mislead or deceive on Mr Steenholdt’s part at the time of making the representations (whether for future negotiations for employment or an offer of a specific job). Factors intervened (following a complaint by John Starke about the poaching of staff) which had a direct effect on Mr Steenholdt’s future conduct. As a consequence of a direction from the directors of Janrule Pty Limited that no employees of Janrule were to be poached or employed by NCA at that time, Mr Steenholdt was prevented from continuing to discuss offers of employment with employees of Janrule in mid January 2001. None of the applicants approached Mr Steenholdt for employment subsequent to that time though they had clearly ceased to be employees of Janrule and were not prevented from doing so.
33.The fact that the prediction (regarding offers of future employment) proved to be false was beyond the control of Mr Steenholdt and at the instigation of John Starke. It cannot be said that any loss or damage was caused by the conduct of Mr Steenholdt. But for the intervention of John Starke the applicants may have successfully negotiated contracts of employment with Mr Steenholdt in the future. It is clear that at the time Mr Steenholdt made representations about employment in the future he had reasonable grounds for doing so and his conduct cannot be taken to be misleading.
I find that on or about 5 January 2001 Duncan Beaton raised with Trevor Steenholdt the question of Mr Beaton getting a job at Gregory’s Ford. That discussion was sufficiently encouraging for both parties that they had a second conversation on 8 January 2001 when details were discussed. Mr Steenholdt told Mr Beaton that before he could employ him Mr Beaton must resign his employment at Canberra Toyota. Mr Steenholdt represented to Mr Beaton that if he resigned his employment Mr Beaton could expect to be employed at Gregory’s Ford on financial terms more attractive than those he currently enjoyed.
On 8 January 2001 Mr Beaton and Mr Steenholdt also discussed the possibility of Ms Beaton and Mr Darmody being employed at Gregory’s Ford. Mr Steenholdt gave Mr Beaton to understand that positions could be found for Ms Beaton and Mr Darmody provided that they resigned their employment at Canberra Toyota. The likelihood of that employment and the terms of the employment of Mr Darmody and Ms Beaton were less clear than those proposed for Mr Beaton but Mr Steenholdt and his son later represented to Ms Beaton and Mr Darmody that if Ms Beaton and Mr Darmody came across they would be no worse off financially than they were at Canberra Toyota.
I reject Mr Steenholdt’s evidence that it was not his practice to offer motor vehicles to employees at the outset of their employment. Mr Steenholdt acted inconsistently with his evidence in the case of Mr Wright. I also reject Mr Steenholdt’s evidence that the applicants would have been placed on probation. That probably would be the case in respect of new employees who were unknown quantities. However, Mr Beaton was well known to Mr Steenholdt and had already established his capacity in his employment at Canberra Toyota. The same was true of Ms Beaton and Mr Darmody. Given their experience in the industry, the circumstances of their proposed recruitment and Mr Steenholdt’s knowledge of them, none of the applicants would have been expected to serve a period of probation.
I find that it was Duncan Beaton who informed Kate Beaton of the representation by Mr Steenholdt to Mr Beaton that if Kate Beaton resigned her employment at Canberra Toyota she would be employed at Gregory’s Ford. The nature of the job and the terms of employment were uncertain. Duncan Beaton had informed Trevor Steenholdt that if he was changing his employment he would want his partner to change hers as well. Mr Steenholdt accepted that. However, Ms Beaton confirmed the offer of employment in a telephone conversation with Mr Steenholdt later on 8 January 2001. Ms Beaton understood that whatever it was she was going to be doing at Gregory’s Ford, she would be no worse off financially than she was at Canberra Toyota.
Dominic Darmody also found out about the offer of employment from Mr Steenholdt through Duncan Beaton. I find that Mr Darmody also spoke to Trevor Steenholdt later on 8 January 2001 by telephone. Mr Steenholdt advised Mr Darmody to speak to Mr Steenholdt’s son the following day to discuss details. Shane Steenholdt did not give evidence. I find that his evidence would not have assisted the respondent. I find that Mr Darmody met with Shane Steenholdt on 9 January 2001 and at that meeting Shane Steenholdt told Mr Darmody that if he wished to be employed at Gregory’s Ford he must first resign his employment at Canberra Toyota. Shane Steenholdt went so far as to advise Mr Darmody about the manner in which he should resign so as not to arouse suspicion. There was no finalisation as to the details of Mr Darmody’s employment but Mr Darmody understood that he would be no worse off than he was at Canberra Toyota and expected to be somewhat better off. He expected to receive a car. Shane Steenholdt was authorised to negotiate with Mr Darmody by his father. Nothing Shane Steenholdt said detracted from Mr Darmody’s understanding, gained from Trevor Steenholdt through Duncan Beaton, that there would be a job for him at Gregory’s Ford if he resigned his employment at Canberra Toyota. In fact, the conversation between Mr Darmody and Shane Steenholdt confirmed that understanding.
Duncan Beaton and Kate Beaton both resigned their employment with Canberra Toyota on 9 January 2001. They acted in reliance upon the representations they had received from Trevor Steenholdt that if they resigned they could expect to be employed at Gregory’s Ford. Later on the same day Duncan and Kate Beaton went to Gregory’s Ford and met with Trevor Steenholdt. I find that he provided a motor vehicle to Mr Beaton and offered a motor vehicle to Ms Beaton in confirmation of his intention to employ them both. The offering of a motor vehicle to Mr Beaton and the provision to Mr Beaton of a motor vehicle as part of the terms of a contract of employment was a further representation by Mr Steenholdt to Duncan and Kate Beaton that they would be employed at Gregory’s Ford.
I find that Dominic Darmody resigned his employment at Canberra Toyota on 10 January 2001 after speaking to Duncan Beaton. Duncan Beaton informed Dominic Darmody that “everything was fine”. Duncan Beaton was led to that view by his conversation with Trevor Steenholdt the previous day and the provision of a motor vehicle to him. Duncan Beaton thought that both he and his wife had jobs and was confident, based upon the representations from Trevor Steenholdt, that Dominic Darmody would have a job as well.
I accept that at the time Mr Steenholdt represented to the applicants between 5 January 2001 and 10 January 2001 that he would employ them his intention was sincere. He did mean to give them jobs. Mr Steenholdt had the authority from the respondent to hire and fire at Gregory’s Ford and, in the ordinary course, he would have been able to honour his promise. However, the proposed recruitment by the respondent of the applicants was unusual in that they were being recruited from within a structure ultimately controlled by Janrule. The respondent was and is a subsidiary of Janrule. The two companies have common directors. Mr Steenholdt’s decision making authority was subject to the control of the directors.
It did not take long for the situation to unravel. John Starke suspected when the applicants resigned that they were going to Gregory’s Ford.
I accept John Starke’s evidence that there had been earlier instances of Mr Steenholdt recruiting staff from dealerships controlled by Mr Starke during the latter half of 2000. The two had become hostile to one another as a result of Mr Steenholdt obtaining independence from Mr Starke as dealer principal of Gregory’s Ford. By 13 January 2001 Mr Starke had found out the truth. By that stage, Mr Steenholdt had started to back pedal, although he had not yet given up upon his promise to employ the applicants. At that stage Mr Steenholdt knew that there would be a reckoning with the directors at a board meeting later in January. The meeting was meant to take place on or about 18 January 2001 but was deferred to 23 January 2001.
I find that at the board meeting on or about 23 January 2001 the directors of both Janrule and the respondent instructed Mr Steenholdt that he was not to employ the applicants. I find that in making that instruction, the directors were misled by Mr Steenholdt, who stated that he told the directors that he had not employed the applicants. This was least misleading, if not untrue. I find that Mr Steenholdt was less than frank with the directors, probably in order to protect himself. If the directors had known of the representations made by Mr Steenholdt to the applicants and their reliance upon those representations, they may not have given their instruction to Mr Steenholdt not to employ the applicants. The directors would probably have adopted the anti poaching policy adopted on that day in any event. The need for the anti poaching policy is obvious from the circumstances and the logic of it is apparent from the evidence of John Starke.
Having regard to the above facts I find that the representations by Mr Steenholdt to the applicants that he would employ them were unreasonable, although honestly and sincerely made at the time. The representations were unreasonable because, at the time Mr Steenholdt knew of Mr Starke’s hostility. Mr Starke already suspected him of poaching his staff. Further poaching was likely to lead to a confrontation. Mr Steenholdt sought to avoid that confrontation by encouraging the applicants to conceal from Mr Starke their future employment at Gregory’s Ford. The attempt at concealment was pointless because Mr Starke was obviously going to find out sooner or later. By 13 January 2001 Mr Steenholdt knew that he was in trouble. He was less than frank at the board meeting on or about 23 January 2001. At the time Mr Steenholdt represented to the applicants that he would employ them he knew, or should have known, that he may have difficulty honouring the promise. He knew Mr Starke would be very angry once he found out. He knew that his directors could stop him employing the applicants. In the circumstances, Mr Steenholdt’s representations to the applicants were reckless and unreasonable.
I find that, s.51A of the Trade Practices Act applies and that in representing to the applicants that he would employ them, the respondent, through Mr Steenholdt, acted in breach of ss.52 and 53B of the Trade Practices Act. The applicants are entitled to damages for the breach.
An applicant, under s.82, must show that he or she suffered loss or damage by the conduct of another person that constitutes a contravention of Part V of the Act. This has been interpreted to mean that the loss or damage must be caused by reason of or as a result of that contravening conduct. Accordingly, it is only loss or damage that is caused by the contravening conduct which can be recovered under s.82. That is, there must be a causal connection between the conduct and the loss for which the applicant seeks to be compensated. Generally, the causal link will not be broken because of a failure on the part of the applicant to take reasonable care: Neilsen v Hempston Holdings Pty Ltd (1986) ATPR 40-686. In Antioniou v Karedis Enterprises Pty Ltd (1995) ATPR 41-400 at 40,421 his Honour Einfeld J expressed concerned that although damages under the Trade Practices Act are largely assimilated to damages in tort, one of the elements bearing on the assessment, namely contributory negligence, is not available. Nevertheless, the position was confirmed in Wardley v State of WA (1992) 175 ALR 514 and in Henville v Walker. In other words, the conduct of the applicants was relevant to establishing causation but not otherwise in the assessment of damages. Even if there are cases where the claimants’ own negligence or unreasonable behaviour may be relevant to indicating that a misrepresentation did not in fact cause the loss, that is not to say that a foolish or naïve person may not recover damages under s.82 upon being induced by a representation which no normal person would have taken seriously: Sullivan v Macquarie Pathology Services Pty Ltd (1995) ATPR (digest) 46-143 at 53, 132. The same view was taken in Sutton v AJ Thompson Pty Ltd (op cit).
Also meriting consideration is the decision of the High Court in Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191. The High Court there stated, at page 1999:
The heavy burdens which the section [s.52] creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will of course depend on all of the circumstances.
It is relevant, however, the High Court was there not referring to the issue of causation under s.82 but rather, to the issue of interpretation of s.52 in considering what conduct is misleading or deceptive or likely to mislead or deceive.
It is also material that Parkdale was followed by the Federal Court in Argy. Also, it is relevant that in Wardley v State of Western Australia at 525-527 the High Court found that the fact that a loss could have been avoided by the applicants exercising reasonable care does not mean that damages should be reduced. Nevertheless, it is possible that the conduct of an applicant can be so foolish, so heedless of his or her interests, as to break the chain of causation. The question that must be decided here is whether the chain of causation was broken by the actions of the applicants. Like Mr Steenholdt, the applicants knew that their resignation would cause trouble with Mr Starke. However, it was Mr Steenholdt who had imposed the condition that they must resign from Canberra Toyota in order to be employed at Gregory’s Ford. The applicants trusted Mr Steenholdt and relied upon him to make good his promise. He ostensibly ran Gregory’s Ford and so, although the applicants knew that there would be trouble, it was reasonable for them to suppose that Mr Steenholdt would be able to carry out his promise. The applicants had no reason to suspect that Mr Steenholdt would be directed not to employ them. The applicants relied upon Mr Steenholdt and did not act carelessly in protecting their own interests.
The contract claim
In order for there to be a contract between the parties, there must be an offer, acceptance and consideration. Mr Steenholdt imposed a condition precedent to the formation of a contract of employment. The condition precedent was that the applicants must each resign their existing employment. Each applicant did so and therefore satisfied the condition precedent. Duncan Beaton and Kate Beaton attended upon Mr Steenholdt on 9 January 2001 to inform him that they had satisfied the condition precedent and to finalise the terms of the contract. I find that the terms of the contract between the respondent and Duncan Beaton were finalised. His remuneration was discussed and agreed upon, as were his duties. Mr Beaton was given a car as part of his employment contract and the provision of that car was part performance of the employer’s obligations under the contract.
The terms of the contract between the respondent and Kate Beaton were not finalised. Her remuneration was not finally settled and neither were her duties. The same was true of Mr Darmody. He satisfied the condition precedent to the formation of the contract on 10 January 2001. However, his remuneration was not settled on 9 or 10 January 2001. As with the case of Mr Beaton, the respondent provided part performance of the employee’s contractual obligations by the provision of a motor car to Mr Darmody but in his case the provision of that vehicle anticipated rather than reflected the contract.
It was a further necessary term of the contract that there be a commencement date. As at 9 January 2001 the commencement date in relation to Duncan Beaton and Kate Beaton was intended to be 22 January 2001. However, by the following day, Mr Steenholdt and Mr Darmody had arranged that Mr Darmody’s employment commencing date would be 29 January 2001, after the “dust settled”.
In fact, none of the applicants ever started work at Gregory’s Ford.
I accept Mr Beaton’s evidence that as at 19 January 2001 Mr Steenholdt was still representing to Mr Beaton that he and Kate Beaton would commence employment at Gregory’s Ford at some future time although the starting date was by then uncertain. There is no evidence that Duncan and Kate Beaton rejected the deferral of the commencement date. Kate Beaton gave evidence, which I accept, that by that stage she had formed the view that she would probably not be starting employment at Gregory’s Ford at all. I also accept Duncan Beaton’s evidence that he spoke to Trevor Steenholdt on 23 January 2001 and at that time Mr Steenholdt told him that the applicants could not be employed at Gregory’s Ford but that he might be able to reconsider the position in a few weeks. I find that Mr Steenholdt had a similar conversation with Mr Darmody on the same day. The fact that Mr Beaton and Mr Darmody were permitted to retain the motor vehicles made available to them and that they did retain possession of them until the following month indicates to me that, as at 23 January 2001 neither they nor Mr Steenholdt had given up all hope of the commencement of their employment, notwithstanding the instruction from the directors.
The instruction given by the directors to Mr Steenholdt at the directors’ meeting was given in apparent reliance upon Mr Steenholdt’s statement to the directors that he had not employed the applicants. The directors were not purporting to repudiate contracts of employment because they did not know there was one. Mr Steenholdt did not categorically repudiate contracts of employment in his conversations with Duncan Beaton and Dominic Darmody on 23 January 2001. In effect, he was pushing back to some uncertain future date their commencement of employment. However, by the time they returned their motor vehicles it was clear to both of them, as it had been earlier to Kate Beaton, that the employment at Gregory’s Ford would not eventuate.
If there was a repudiation of existing contracts of employment, that repudiation occurred when Mr Steenholdt asked for the return of the motor vehicles. That repudiation would have been accepted when Mr Beaton and Mr Darmody returned the motor vehicles.
I find that a contract of employment between the respondent and Duncan Beaton was formed on 9 January 2001. All of the terms of the contract were established by that date. However, Duncan Beaton agreed to a variation of the contract on 19 January 2001 when Mr Steenholdt asked him, and he apparently accepted, to put off his commencement date, and the commencement date for Kate Beaton, until a future uncertain time. In the event, there was no repudiation of the contract as varied between the respondent and Duncan Beaton.
It was just that the commencement date was never made firm. The contract was mutually abandoned the following month.
I find that contracts of employment between Kate Beaton and Dominic Darmody were never formed. The duties and remuneration of Kate Beaton were never settled. The remuneration of Dominic Darmody was never settled. There was a mutual intention that those matters would be settled at or before their commencement dates but the time of their commencement never arose due to the intervention of John Starke and the directors.
In the circumstances, I find that there is no liability by the respondent to the applicants for breach of contract. As at 10 January 2001 it may well be that the respondent would have been estopped from denying the existence of contracts of employment but, as I have already noted at the outset of these reasons, estoppel was not argued and, as my offer to consider an amended application and submissions covering that issue was not taken up, I will not consider it.
Assessment of damages for breach of the Trade Practices Act
Section 82 does not itself set out how a court is to assess the amount of any loss or damage suffered by an applicant. There is no requirement that loss or damage be assessed in any different way than under the general law and neither is there any necessary restriction to common law conceptions as to the nature and extent of any damages recoverable. Financial loss as well as physical injuries to persons or property is clearly recoverable. It seems well settled that the measure of damages under s.82 approximates the damages recoverable in tort and in most cases, especially those involving misleading or deceptive conduct and the making of false statements, the measure of damages in tort is appropriate. In Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 351, Fox J set out the proper approach to the assessment of damages:
The correct way to approach the assessment of damages in this case, in my view, is to compare the position in which the applicants might have been expected to be if the misleading conduct had not occurred with the situation they were in as a result of acting in reliance on that conduct.
I accept the applicants’ submission that loss was assessed in O’Neill v MBF Australia Pty Ltd on the basis of the difference between what the applicant in that case would have earned in his former job and what he would have earned in the job he had been offered. However, in that case there was no doubt that a contract of employment with the respondent had been formed and the terms of that contract were certain. In this matter, I have found that the contract with Duncan Beaton was mutually abandoned and contracts with Kate Beaton and Dominic Darmody were never finalised. In any event, on the facts of this matter, if the misleading representations had not been made, the applicants would not have resigned their employment with Canberra Toyota. The measure of their loss is what they were induced to give up; that is, their employment at Canberra Toyota. Damages should be assessed from the date the applicants gave up that employment to the date they regained it, based upon the income that they would have earned over that period if they had remained at Canberra Toyota, less what they actually earned and their earning potential over that period, bearing in mind the obligation on the applicants to mitigate their loss and their availability for employment.
Duncan Beaton gave up his employment at Canberra Toyota on 9 January 2001 and regained it on 27 December 2001. I accept the respondent’s submission that at Canberra Toyota Duncan Beaton would have earned no more than $5,654 per month gross. His actual earnings over the relevant period were only $7,880 so that his nominal loss is in round figures $60,000. However, between March and June 2001 Mr Beaton suffered from the effects of a broken ankle which reduced his earning capacity, in my view, by about half. In addition, he broke his arm on 6 September 2001 and was unemployed until he resumed employment with Canberra Toyota. Again, his earning capacity was, in my view, reduced by about half. He could have earned approximately $3,000 per month notwithstanding his injury over this period but did not. On his own evidence, he had the capacity to work over that period as a sales manager. Accordingly, Mr Beaton failed to mitigate his loss over that period.
In addition, in June 2001 Duncan and Kate Beaton moved to Bateman’s Bay. This was a lifestyle choice, not forced upon them by the loss of their employment with Canberra Toyota. The opportunity to find equivalent employment was significantly less in Bateman’s Bay than it was in Canberra. The respondent should not have to bear their loss associated with that lifestyle choice. I find that during the period that Duncan Beaton lived at Bateman’s Bay when he was uninjured his earning capacity was reduced by about half by his own choice. To that extent also, he has failed to mitigate his loss.
Duncan Beaton should be fully compensated for his loss for a period of 12 weeks following the resignation of his employment. It had been agreed on 9 January 2001 that Mr Beaton would not start employment at Gregory’s Ford before 22 January 2001 but that, like his resignation from Canberra Toyota, was a consequence of his reliance upon the representation of Mr Steenholdt. Mr Beaton would have had no claim against the respondent under his contract of employment in respect of the period prior to his commencing work, but that does not disentitle him to recovering damages for that period as a consequence of the misrepresentation. Thereafter, I find that Duncan Beaton earned about as much as he could due to his broken ankle, and lifestyle choice associated with the move to Bateman’s Bay. He could have earned income while he had a broken arm but did not. Accordingly, his recoverable loss is limited to the 12 weeks until he found employment in March 2001. That loss is $15,657
Prior to the resignation of her employment at Canberra Toyota, Kate Beaton earned a base salary of $28,000 and further $250 per vehicle on after market sales. Her claimed earning capacity was $73,000 per year or $6,083.36 per month. The respondent submits she had an earning capacity of $5,731 gross per month. I accept that figure. Ms Beaton was unemployed for four weeks following her resignation. She then gained employment at a salary plus commissions of $450 per week, where she remained until June 2001. Ms Beaton voluntarily gave up that employment to move to Bateman’s Bay and was unemployed for approximately three months. That unemployment resulted from her lifestyle choice and the loss is not recoverable. On 5 September 2001 she gained employment on a salary of approximately $550 per week but probably could have earned significantly more than that if she had remained in Canberra. Again, I find that the loss is not recoverable. On 27 December 2001 Ms Beaton was re-employed by Canberra Toyota at a salary plus commissions of approximately $37,000 per annum. She remains on that level of income. I find that any liability to Ms Beaton ceased when she regained her employment with Canberra Toyota, notwithstanding that her income since then appears less than what she was earning prior to her resignation. The fact that she is still earning only $37,000 leads me to the view that there are reasons unrelated to her resignation on 9 January 2001 that restrict her earning capacity.
On this basis, Ms Beaton is entitled to be compensated for her loss for five months up to June 2001, less what she earned. I calculate Kate Beaton’s loss as $18,905.
Dominic Darmody was, prior to his resignation, earning a base salary of $24,598 or $49196 including commissions. His earning capacity was approximately $4,099 per month gross according to the respondent. I accept that figure. He was unemployed for four weeks. He gained employment on 5 February 2001 with National Capital Motors and in that position he earned approximately $4,500 per month. Mr Darmody acted promptly to mitigate his loss. He suffered no recoverable loss after 5 February 2001. On that basis, Dominic Darmody should recover $4,000 in respect of the four week period that he was unemployed.
The applicants’ other asserted losses are not recoverable. In particular, the claimed loss by Mr and Ms Beaton on the sale of their home in Canberra was not caused by Mr Steenholdt’s representations. It was the result of their decision to make a lifestyle move to Bateman’s Bay.
The applicants should also receive interest up to judgment. Interest should run from the date on which their respective causes of action were complete until the date of judgment. In the case of Duncan Beaton, that date was 1 March 2001. His cause of action was complete when he returned his Gregory’s Ford motor vehicle, gave up the prospect of securing employment with Gregory’s Ford and found alternative employment. In the case of Kate Beaton, interest should accrue from 1 February 2001. In the case of Dominic Darmody, interest is payable from 5 February 2001. Interest should be paid at the same rate as applies pursuant to s.230 of the Magistrates Court (Civil Jurisdiction) Act 1982 (ACT). Pursuant to that section, the rate of
pre-judgment interest is within the discretion of the ACT Magistrates Court. Since 1 May 1998 the general rate of pre-judgment interest applied in that court is 8.45 per cent. That is a reasonable commercial rate at the present time and I will apply that rate of interest in these proceedings.
I will hear the parties as to costs.
I certify that the preceding one hundred and ten (110) paragraphs are a true copy of the reasons for judgment of Driver FM
Associate:
Date: 23 December 2003
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