Griffin v Interchem Pty Ltd

[2012] VCC 1803

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-12-02574

GLEN GRIFFIN	Plaintiff
v.
INTERCHEM PTY LTD	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	20 November 2012
DATE OF JUDGMENT:	20 November 2012 (revised 20 November 2012)
CASE MAY BE CITED AS:	Griffin v Interchem Pty Ltd
MEDIUM NEUTRAL CITATION:	[2012] VCC 1803

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Summary judgment application – Counterclaim by defendant allegedly raising a “discrete” claim – Monies paid by mistake – Summary judgment not appropriate

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. D’Abaco	Mark Caldwell Lawyer
For the Defendant	Mr J. McDougall	Brian Ward & Partners

HIS HONOUR:

1The parties were employer and employee from about July 2006 until events in March 2012 led to the termination of the plaintiff’s employment with the defendant. The dispute between the parties relates primarily to events in March 2012, when allegations were made by the defendant about the plaintiff’s conduct during his employment with the defendant, which was said to constitute serious breaches of the Employment Agreement. As a consequence, the defendant required the plaintiff to take what is described in the written employment contract as “garden leave”. The plaintiff alleges that this action by the defendant constituted a repudiation of the Employment Agreement.

2The plaintiff, in his statement of claim, seeks the payment of remuneration which he says is owing pursuant to the Employment Agreement. This remuneration includes base salary payments, accrued annual leave, accrued long service leave, payment of expenses, payment in lieu of notice and a termination payment. The sums claimed total $749,137.25.

3The defendant has filed a defence and counterclaim. The defence puts in issue the plaintiff’s claim. In a separate counterclaim, the defendant claims that monies were paid to the plaintiff under a mistake. It is alleged that, pursuant to the Employment Agreement, superannuation contributions were to be included as part of the base salary payments, although during the six years of the plaintiff’s employment, by mistake, the superannuation contributions were made in addition to the base salary payments. The defendant counterclaims for the repayment of those contributions totalling $106,735.24.

4It is in respect of its counterclaim that the defendant brings a Summary Judgment application. The defendant primarily relies upon a provision in paragraph 4 of the Schedule to the written Employment Agreement, which reads as follows: “The base salary shall be inclusive of any liability of the employer under clause 4.4 (superannuation levy) and all leave payment entitlements under clauses 5 and 6 of this contract”.

5The affidavit material in support of the defendant’s application for Summary Judgment includes an affidavit by a company director Mr Lardner, who negotiated the Employment Agreement with the plaintiff. He said that he had instructed the defendant’s account manager as to the superannuation arrangements for the plaintiff. He says that he cannot recall what he instructed the account manager, “but I do recall reading the contract and mistakenly believing that the contract required the plaintiff’s superannuation to be paid in addition to the base salary. My belief was contrary to the terms of the contract, and during the plaintiff’s employment, I was never told by him that he was receiving superannuation payments over and above the amount agreed in the contract”.

6The plaintiff has sworn an affidavit in opposition to Summary Judgment. He said that between March 2006 and early July 2006, he had “at least ten telephone discussions and eight meetings [with Mr Lardner] during which we discussed what I would be paid and the various components of my remuneration package”. The plaintiff said that he and Mr Lardner “agreed that in addition to the annual salary, the defendant would provide to me statutory superannuation contributions of 9% of my salary, a laptop computer for business and personal use, a mobile telephone and a fully maintained motor vehicle for business and personal use”.

7The evidence is that during the course of the plaintiff’s employment, superannuation contributions were made in addition to the base salary payments. Defendant’s counsel, Mr McDougall, submitted that the claim for the payments made under a mistake in respect of the superannuation contributions is a separate and discrete issue, and no defence has been raised in respect of that issue which should prevent the entry of judgment at this stage.

8In my view, there are a number of matters which make it appropriate for the issue of whether the superannuation contributions were paid in addition to the base salary under a mistake should be determined at trial, rather than on a summary basis. Those reasons are as follows:

a.there is an issue as to what constitutes the Employment Agreement. As pleaded by the plaintiff in the statement of claim, the Employment Agreement is alleged to be partly oral, partly in writing and partly implied. The oral component is said to have “comprised discussions between the plaintiff and Ken Lardner on behalf of Interchem in or about early to mid 2006”. The written component is said to be the employment contract dated 18 July 2006. In the defence and counterclaim, the Employment Agreement, as alleged and particularised by the plaintiff, is admitted by the defendant;

b.there is an inconsistency between clause 4 of the Schedule to the written employment contract and what the plaintiff says was agreed in the discussions with Mr Lardner. At present, the defendant has agreed that the conversations form part of the Employment Agreement and are not simply to be regarded as “surrounding circumstances”, as Mr McDougall submitted;

c.from the affidavit material, it appears that from the time the Employment Agreement was entered into, both Mr Lardner and the plaintiff had a belief that the plaintiff was entitled to the payment of superannuation contributions, not as part of his base salary but in addition to it;

d.plaintiff’s counsel, Mr D’Abaco, submitted that the provision in paragraph 4 of the Schedule is inconsistent with clause 4 of the written document relating to remuneration, including base salary (paragraph 4.1), and superannuation (paragraph 4.2), and with paragraph 5 relating to leave entitlements. Paragraph 4 of the Schedule purports to include in the base salary the superannuation contributions and “all leave payment entitlements under clauses 5 and 6 of this contract”;

e.the issue as to whether the leave payment entitlements is included in the base salary arises for determination in relation to the plaintiff’s claim for leave payments totalling $177,523.33, and possibly in relation to the claim for long service leave entitlements of $60,770.18. The application of clause 4 in the Schedule to the employment contract will need to be determined at trial as part of the defence raised in relation to those claims;

f.although no specific claim for rectification of the written employment contract has been made at this stage, it is possible that the plaintiff may seek to amend its claim to rectify the agreement in line with what both the plaintiff and Mr Lardner believed at the relevant time following their extensive discussions, was to be the position in relation to the superannuation contributions;

g.the defendant’s counterclaim is only one of a number of disputes between the parties relating to the plaintiff’s employment with the defendant and his entitlement to be remunerated pursuant to the Employment Agreement.

9The authorities make it clear that, even as the test for Summary Judgment has been reformulated in the Civil Procedure Act 2010 (Vic), the Court should only enter judgment in the clearest of cases. The authorities since the Act came into force have suggested that only where a defence can be regarded as “fanciful” should it be concluded that a defence has no “real” prospect of success. I do not consider that the present application is one in respect of which Summary Judgment is appropriate.

10Accordingly, the defendant’s summons filed 11 October 2012 will be dismissed.

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Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 20 November 2012 and revised that day.

Dated: 20 November 2012

Catherine Kusiak  

Associate to His Honour Judge Anderson