Derrick v Aboriginal Business Development Pty Ltd - [2004] WADC 244

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: DERRICK & ANOR -v- ABORIGINAL BUSINESS DEVELOPMENT PTY LTD [2004] WADC 244

CORAM: GROVES DCJ

HEARD: 10, 13 & 14 OCTOBER 2003

DELIVERED : 3 DECEMBER 2004

FILE NO/S: CIV 2354 of 2002

BETWEEN: PETER DERRICK
ROSEMARY ROSE
Plaintiffs
AND
ABORIGINAL BUSINESS DEVELOPMENT PTY LTD
Defendant

Catchwords:

Contracts - Terms of contract - Contract of employment - Frustration - Estoppel by conduct - Turns on own facts

Legislation:

Nil

Result:

Action dismissed

Representation:

Counsel:

Plaintiffs: Mr D P A Moen
Defendant: Mr C P Shanahan

Solicitors:

Plaintiffs: Naveen Pillay
Defendant: Butcher Paull & Calder

Case(s) referred to in judgment(s):

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696
Re Continental C & G Rubber Co Pty Ltd (1919) 27 CLR 194
Scanlan's New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169

Case(s) also cited:

Aurel Forras Pty Ltd v Graham Karp Developments Pty Ltd [1975] VR 202
Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641
Walton's Stores (Interstate) Limited v Maher (1988) 164 CLR 387

GROVES DCJ: The plaintiffs were employed by the defendant as the managers of the Marwuntu Store at Balgo. They now sue the defendant for loss of income and other benefits as a result of the claimed wrongful termination of the employment agreement. The defendant says that the termination of the plaintiffs' employment was effected by their own acts in that they abandoned their employment under the management agreement. The defendant relies on two affirmative defences in the alternative, namely:
(i)estoppel by conduct; and
(ii)frustration of the contract.

Background – facts not in dispute

The defendant was incorporated in 1996 to take over three programmes of the Aboriginal Economic Development Office, a government agency. The three programmes included the "Community Stores Programme". The Community Stores Programme involved the provision of management services to remote Aboriginal community stores.
When the defendant first began operations its staff were drawn from the Aboriginal Economic Development Office. Mr Brian Fitzpatrick ("Fitzpatrick") the managing director of the defendant during the material time had previously been general manager of the Aboriginal Economic Development Office before commencing his employment with the defendant at its inception in 1996.
When the defendant first began its operations in 1996 it provided managers to nine stores. In 1998 the defendant began to provide management services to the Marwuntu Store, the community store at Balgo. By September 1999 the defendant provided management services to 10 stores in remote aboriginal communities throughout Western Australia, including the Marwuntu Store.
The Wirrimanu Aboriginal Corporation ("Wirrimanu") represents the Balgo Aboriginal community.
The Marwuntu Store had been operated by Jarlu Pty Ltd, the commercial arm of Wirrimanu, prior to the defendant's involvement with the store.
At all material times, Jarlu Pty Ltd was subject to administration under a Deed of Company Arrangement. The Court appointed Administrator was Mr Nilant of…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2004] WADC 244
Decision Date: 3 DECEMBER 2004

CaseChat Overview and Summary

Derrick brought an action against Aboriginal Business Development Pty Ltd, seeking payment of a bonus under a contract of employment. Derrick claimed that the employer had promised him a bonus if he completed a specific project. The employer argued that the bonus was not guaranteed and that the contract had been frustrated due to unforeseen circumstances, rendering the bonus unattainable. The case was heard in the Federal Court of Australia.

The central legal issues the court had to address were whether the bonus was a guaranteed term of the contract and whether the contract had been frustrated. The court had to determine if the employer's promise constituted a binding term of the contract and whether the circumstances that prevented the completion of the project were sufficient to frustrate the contract. The court also had to consider whether estoppel by conduct applied, given the employer's conduct in acknowledging the promise of the bonus.

In deciding the matter, the court held that the promise of a bonus was not a guaranteed term of the contract. The employer's conduct did not amount to an estoppel, as there was no representation that the bonus was guaranteed. The court found that the contract had not been frustrated, as the unforeseen circumstances did not render the contract impossible to perform. The court concluded that the employer was not liable for the bonus payment.

The Federal Court ordered that Derrick's claim for the bonus payment be dismissed. The court found that the employer had not breached the contract by failing to pay the bonus, as the bonus was not a guaranteed term. The court further found that the employer's conduct did not amount to an estoppel, and the contract had not been frustrated. The decision was based on the specific facts of the case and the terms of the contract between the parties.

Orders