Hampton v BHP Billiton Minerals Pty Ltd [No 2]

[2012] WASC 285

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   HAMPTON -v- BHP BILLITON MINERALS PTY LTD [No 2] [2012] WASC 285

CORAM:   EDELMAN J

HEARD:   22-24 MAY 2012

DELIVERED          :   9 AUGUST 2012

FILE NO/S:   CIV 2292 of 2011

BETWEEN:   NEVILLE CHARLES HAMPTON

First Plaintiff

NANCY EDITH LUMSDEN
Second Plaintiff

AND

BHP BILLITON MINERALS PTY LTD
First Defendant

MITSUI-ITOCHU IRON PTY LTD
Second Defendant

ITOCHU MINERALS & ENERGY OF AUSTRALIA PTY LTD
Third Defendant

Catchwords:

Contract - Construction - Clause in long term contract for sale of land providing that if the employee ceases to be employed by the Company then the Purchaser may elect to terminate this Agreement no later than the effective date the Employee ceases to be in the Company's employ - Meaning of provision that 'if the Purchaser fails to make such election then the Purchaser shall on the last day on which the Purchaser was entitled to do so be deemed to have made such election and this Agreement shall be terminated' - Whether 'election to terminate' means 'election to affirm' - 'Rule' in Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418

Contract - Affirmation - Whether contract affirmed by conduct - Whether compliance with formal requirements of letter or notice

Contract - Implied terms - Whether a term can be implied for reasonable notice - Implied term cannot contradict express term of the contract

Contract - Implied terms - Whether a term can be implied requiring the defendants to 'act reasonably in respect to their dealings with the plaintiffs' - Nature of implied terms of reasonableness - Content of implied term said to be that the defendants could not take advantage of automatic termination of contract - No such implied term exists - No breach of any such implied term

Equity - Unconscionable conduct - Elements of equitable doctrine - Requirement of special disability not proved - Requirement of unconscientious taking advantage of any special disability not proved - Transaction fair, just and reasonable

Trade practices - Trade Practices Act 1974 (Cth) s 51AA - Meaning of 'unconscionable conduct in the unwritten law' - Whether three elements satisfied

Trade practices - Trade Practices Act 1974 (Cth) s 51AB - Unconscionable conduct - Mere reliance by defendants upon their contractual rights under a contract which is objectively beneficial to the plaintiffs is not unconscionable - No unconscionability arising from statements concerning the operation of the contract to one of the plaintiffs which were not misrepresentations and which were not relied upon by the plaintiffs

Equity - Relief against forfeiture - Unavailability of relief against forfeiture unless termination of contract arises from the exercise of a party's power to terminate - Relief against forfeiture unavailable when plaintiffs have no interest to restrain from forfeiture due to termination of contract - Circumstances would not lead to relief against forfeiture

Torts - Trespass - Elements of tort of trespass - Requirement of occupation or control over land prior to alleged trespass before a claim can be brought for trespass - Meaning of occupation or control - No trespass where the defendant occupies property by consent - Nature of award of mesne profits

Damages - Mesne profits as damages for trespass - Characterisation of mesne profits as either a compensatory award of damages or a restitutionary award of damages - Both awards to be assessed at a subsidised rate where any trespass occurred in the context of a failure to enter into a lease at subsidised rates

Legislation:

Australian Consumer Law
Fair Work Act 2009 (Cth), s 117
Industrial Relations Act 1988 (Cth)
Property Law Act 1969 (WA), s 92
Sales of Reversions Act 1867 (Imp)
Trade Practices Act 1974 (Cth), s 51AA, s 51AB

Workplace Relations Act 1996 (Cth)

Result:

Claim dismissed
Counterclaim dismissed

Category:    A

Representation:

Counsel:

First Plaintiff                :     Ms W F Gillan

Second Plaintiff            :     Ms W F Gillan

First Defendant             :     Mr A C Willinge & Mr P A Walker

Second Defendant         :     Mr A C Willinge & Mr P A Walker

Third Defendant           :     Mr A C Willinge & Mr P A Walker

Solicitors:

First Plaintiff                :     Gibson & Gibson

Second Plaintiff            :     Gibson & Gibson

First Defendant             :     Ashurst Australia

Second Defendant         :     Ashurst Australia

Third Defendant           :     Ashurst Australia

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

Actall Pty Ltd v Pacific Bay Developments Pty Ltd [2006] NSWCA 190

Anderson v Bowles [1951] HCA 61; (1951) 84 CLR 310

Aqua-Max Pty Ltd v M T Associates Pty Ltd [2001] VSCA 104; (2001) 3 VR 473

Attorney-General of New South Wales v World Best Holdings Limited [2005] NSWCA 261; (2005) 63 NSWLR 557

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99

Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491

Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51

Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCA 62; (2002) 117 FCR 301

Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435

Barber v Brown (1856) 1 CB (NS) 120; 140 ER 50

Barnett v The Earl of Guildford (1855) 11 Ex 19

Bilambil‑Terranora Pty Ltd v Tweed Shire Council [1980] 1 NSWLR 465

Black v Garnock [2007] HCA 31; (2007) 230 CLR 438

Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362

Body Bronze International Pty Ltd v Fehcorp Pty Ltd [2011] VSCA 196; (2011) 282 ALR 571

Body Bronze International Pty Ltd v Soleil Tanning Oxford Pty Ltd [2007] FCA 371

Bone v Commissioner of Stamp Duties [1972] 2 NSWLR 651

Boustany v Piggott (1995) 69 P & CR 298

Bowtell v Goldsbrough, Mort & Co Ltd [1905] HCA 60; (1905) 3 CLR 444

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Brand v Chris Building Co Pty Ltd [1957] VR 625

Bromley v Smith (1859) 26 Beav 644; 53 ER 1047

Browne v Dunn (1893) 6 R 67

Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342

Burke v Corruption and Crime Commission [2012] WASCA 49

Butcher v Butcher (1827) 7 B & C 399; 108 ER 772

Butler v Egg and Egg Pulp Marketing Board [1966] HCA 38; (1966) 114 CLR 185

Butts v O'Dwyer [1952] HCA 74; (1952) 87 CLR 267

Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410

Byron Bay Retirement Villages Pty Ltd v Zandata Pty Ltd [2008] NSWSC 1123

Champtaloup v Thomas [1976] 2 NSWLR 264

Chinery v Viall (1860) 5 H & N 288; 157 ER 1192

Clough Engineering v Oil & Natural Gas Corporation [2007] FCA 881

CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd [2011] TASSC 71

Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337

Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447

Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389

Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 176 ALR 693

Council of the City of Sydney v Goldspar Australia Pty Limited (2006) 230 ALR 437

Davis v Duke of Marlborough (1818) 2 Swans 108; 36 ER 555

Delaney v Staples [1992] 1 AC 687

Dixon v Stenor Ltd [1974] ICR 157

Doe v Hare (1833) 2 Cr & M 145; 149 ER 709

Dunlop v Macedo (1891) 8 TLR 43

Earl of Chesterfield v Janssen (1751) 2 Ves Sen 123; 28 ER 82

Earl of Portmore v Taylor (1831) 4 Sim 182; 58 ER 69

Ebbels v Rewell [1908] VLR 261

Elderslie Property Investments No 2 Pty Ltd v Dunn [2007] QSC 372

Elliott v Boynton [1924] 1 Ch 236

Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 86 ALJR 296

Evans v Llewellin (1787) 1 Cox 333; 29 ER 1191

Finesky Holdings Pty Ltd v Minister for Transport for Western Australia [2002] WASCA 206; (2002) 26 WAR 268

Gange v Sullivan [1966] HCA 55; (1966) 116 CLR 418

Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395

Gardiner v Orchard [1910] HCA 18; (1910) 10 CLR 722

GEC Marconi Systems v BHP Information Technology (2003) 128 FCR 1

Georgeski v Owners Corporation SP49833 [2004] NSWSC 1096

Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] HCA 36; (1972) 128 CLR 529

GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd [2001] FCA 1761; (2001) 117 FCR 23

Greek Macedonian Club Ltd v Pan Macedonian Greek Brotherhood NSW Ltd [2007] NSWSC 92

Hampton v BHP Billiton Minerals Pty Ltd [2012] WASC 133

Hampton v BHP Billiton Pty Ltd [2011] FWA 3335

Haniotis v Dimitriou [1983] 1 VR 498

Harrison v Schipp [2001] NSWCA 13

Hey v Moorehouse (1839) 6 Bing NC 32; 133 ER 20

Hines v Hines [1999] QCA 149

Hurley v McDonalds Australia Ltd [1999] FCA 1728

Insight Oceania Pty Ltd v Phillips Electronics Australia Ltd [2008] NSWSC 710

International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151

Inverugie Investments Ltd v Hackett [1995] 1 WLR 713

Islam v South Sydney City Council (1998) NSW Conv R 16‑865

J A Pye (Oxford) Ltd & Ors v Graham [2002] UKHL 30; [2003] 1 AC 419

Jones v Chapman (1849) 2 Ex 803; 154 ER 717

Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

Kayserian Nominees (No 1) Pty Ltd v J R Garner Pty Ltd [2008] NSWSC 803

Lahoud v Lahoud [2009] NSWSC 623

Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432

Langley v Foster (1909) 10 SR NSW 54

Leech v Preston Borough Council [1985] ICR 192

Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406

Lock v Pearce (1893) 2 Ch 271

Lollis v Loulatzis [2007] VSC 547

Lows v Telford (1876) 1 All Cas 414

MacIntosh v Lobel (1993) 30 NSWLR 441

Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268

Maynard v Moseley (1676) 3 Swan 653; 36 ER 1010

McCourt v Cranston [2012] WASCA 60

MI Design Pty Ltd v Dunecar Pty Ltd [2000] NSWSC 996

Mineaplenty Pty Ltd v Trek 31 Pty Ltd [2006] NSWSC 1203

Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1

Ministry of Defence v Ashman (1993) 25 HLR 513

Ministry of Defence v Thompson (1993) 25 HLR 552

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Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; (2002) 122 FCR 110

Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583

Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723

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Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353

Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1179

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R v Birks (1990) 19 NSWLR 677

Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209

Ray Mullins & Sons Pty Ltd v Skycorp Investments Pty Ltd [2011] WASCA 49

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Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516

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Schipp v Harrison [1998] NSWSC 997

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Shi v Jiangsu Native Produce Import and Export Corp [2009] EWCA Civ 1582

Siagian v Sanel Pty Ltd (1994) 122 ALR 333

Smith v Milles (1786) 1 TR 475; 99 ER 1205

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The Mediana [1900] AC 113

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Water Wine & Juice Pty Ltd v Konstantopoulos [2010] NSWSC 312

Waters v Maynard (1924) 24 SR (NSW) 618

Western Australia v Ward [2002] HCA 28; (2002) 213 CLR 1

Western Export Services Inc v Jireh Pty Ltd [2011] HCA 45; (2011) 282 ALR 604

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Wilson v Kelly [1957] VR 147

Wynne v Green (1901) 1 SR (NSW) 40

Table of Contents

Introduction

The case in summary
The legal issues

The factual background

The 28 June 2010 'Suspension Meeting'
The 16 July 2010 'Dismissal Meeting'

Mr Hampton's proceedings in Fair Work Australia and the plaintiffs' continued presence at the Property by consent
Last minute amendments alleging statements at the Housing Office

Mr Hampton's evidence of his visit to the Housing Office in January 2009
Mr Hampton's second visit to the Housing Office around July 2010
Conclusions of fact about the meetings

Issue 1:  When did Mr Hampton's employment terminate?

When did the relationship of employment terminate?
Was it possible for the relationship of employment to terminate with immediate effect?

Issue 2:  The construction of the Sale Contract

The operation of the Sale Contract in broad overview
The Sale Contract terminated on 16 July 2010

(1)      The literal meaning of the key words in cl 9(d)
(2)      The meaning of cl 9(d) in its entirety
(3)      Contrast with cl 9(a) and cl 9(b)
(4)      Clause 9 read as a whole
(5)      The cl 9(e) exception
(6)      The need for consistency between cl 9(d) and cl 11
(7)      The Sale Contract is tied to the employment of the Employee
(8)      Extrinsic materials and common knowledge of the parties

Submissions concerning difficulties with this construction

(1)      Clause 9(d) adds nothing to cl 9(c)
(2)      The election in cl 9(d) involves no real 'choice'
(3)      The contract is expressed as a contract of sale, not a long term lease
(4)      The construction has apparently harsh consequences for a Purchaser
(5)      The construction of automatic termination clauses

The implied term argument
The argument that the defendants affirmed the Sale Contract

Whether the plaintiffs complied with formalities of notice

Issue 3:  Unconscionable conduct

Unconscionable conduct under the unwritten law
Unconscionable conduct under s 51AA of the Trade Practices Act
Unconscionable conduct under s 51AB of the Trade Practices Act

The operation of the section
The particulars of unconscionable conduct generally
The particulars concerning statements at the Housing Office

Conclusions on unconscionable conduct

Issue 4:  Relief against forfeiture

A preliminary matter:  relief against forfeiture as an alternative claim
(1)      The doctrine of relief against forfeiture does not apply in cases of automatic termination
(2)      Relief against forfeiture depends upon continued existence of accrued rights
(3)      In any event, the plaintiffs cannot establish a liberty for relief against forfeiture

The 'surprise' of the plaintiffs
The alleged windfall to the defendants

Issue 5:  Breach of an implied term of 'reasonableness'?
The counterclaim:  'mesne profits' for trespass

The first fundamental problem with the counterclaim:  no intention to occupy to the exclusion of the plaintiffs
The second fundamental problem with the counterclaim:  no physical occupation to the exclusion of the plaintiffs

The manner in which the case proceeded
Physical occupation is necessary for a claim for trespass
The physical element of occupation in a claim for mesne profits

Quantification of the counterclaim

The different quantifications of the award
The decisions in Ministry of Defence v Ashman and Ministry of Defence v Thompson
The different characterisations of mesne profits
Assessment of mesne profits as compensatory damages
Assessment of mesne profits as restitutionary damages

Conclusion

EDELMAN J: 

Introduction

The case in summary

1. Underlying the numerous legal issues raised in this case is an unfortunate story.

2. Mr Hampton was employed by BHP Billiton Iron Ore Pty Ltd (BHPBIO) for more than 20 years.  He worked in Newman in the north of Western Australia on mine sites.  He took pride in his work.  He proudly recounted his congratulations from BHPBIO after a project he supervised, involving 30,000 to 40,000 man hours, had been completed without a single safety 'incident'.[1]

   [1] Exhibit A (witness statement of Mr Hampton) [22].

3. The defendant companies are related to Mr Hampton's employer.  The defendants seek to evict Mr Hampton and Ms Lumsden despite having entered into a contract, described as a Sale Contract, with them.  The Sale Contract involved payments by instalment over 15 years during which Mr Hampton and Ms Lumsden occupied the Property which was the subject of the Sale Contract.  The defendants say that the Sale Contract was tied to Mr Hampton's employment and that it was terminated when Mr Hampton was dismissed from employment, for a serious driving safety infringement.  At the time of his dismissal Mr Hampton had just over a year of the contract term remaining.  He and Ms Lumsden had been living in the Property for nearly 20 years.

4. Counsel for the defendants, Mr Willinge, accepted that there were difficulties with the construction of the Sale Contract which he urged.[2]  Although there is ambiguity, I accept that Mr Willinge's construction is the better approach to the Sale Contract.  This construction has extreme consequences for Mr Hampton and Ms Lumsden.

   [2] ts 191, 194 ‑ 195.

5. Counsel for the plaintiffs submitted:  'what is conscientious or reconcilable with good conscience about the [d]efendants taking the [p]laintiffs' home of 20 years where the [p]laintiffs were not in breach of the [Sale Contract] and at that time they only had to pay $3,511.63 ... to complete the sale'?[3]  Apart from the fact that the defendants had title to the Property, the assumption underlying this submission was that there exists an idiosyncratic discretion to rewrite a contract to relieve the plaintiffs from undesired consequences arising from the operation of agreed provisions of the contract.  If this assumption were correct then it might not have been difficult for such a discretion to be exercised in this case.  But the assumption is incorrect.

   [3] Plaintiffs' closing submissions [254].

6. As I explain in the conclusion to these reasons it is a matter for the defendants whether in the circumstances of this case they will rely upon the interpretation of an ambiguous agreement which they have succeeded in establishing to deprive a former employee of his home and community after he has devoted two decades of his life to working for their related company.

7. The defendants also say that the plaintiffs should pay them nearly $70,000 for the nine months in which the plaintiffs stayed in the property after the date on which the defendants allege that the Sale Contract was terminated.  Although damages are not confined to financial loss, any financial loss suffered by the defendants from alleged trespass was about $2,500.  The defendants claim damages for trespass despite a letter in which the defendants say, in relation to the relevant period of alleged trespass, that 'the Company has allowed you to occupy the above property'.  Although the defendants raised difficult issues of liability and quantification of damages for trespass, their claim of liability fails.  The assessment of liability in any event would only have been approximately $2,900.

The legal issues

1. There were some difficulties with the manner in which this case was presented, including last minute amendments to the plaintiffs' pleadings which raised important new facts.  Numerous legal issues were also raised by the plaintiffs, some very briefly.  Subsequent to the hearing it was also necessary to call for further submissions from the parties concerning matters relating to the counterclaim for trespass.

2. The legal issues which emerged were as follows:

   (i)the time at which a termination of an employment relationship takes effect when a payment is promised in lieu of notice ([50] ‑ [78]);

   (ii)the construction of various ambiguous clauses in the 'Sale Contract' involving a sale of a property by instalments and issues concerning alleged affirmation of a terminated contract ([79] ‑ [169]);

   (iii)the suggested implication of terms of 'reasonable notice' and 'reasonableness into the Sale Contract ([149] ‑ [150] and [259] ‑ [269]);

   (iv)the scope and operation of the doctrine of 'unconscionable conduct' in equity and under s 51AA of the Trade Practices Act 1974 (Cth) ([173] ‑ [191]);

   (v)the scope and operation of the broader doctrine of statutory unconscionability in s 51AB of the Trade Practices Act ([192] ‑ [227]);

   (vi)the operation of relief against forfeiture, including where a contract terminates without exercise by a party of a power to terminate ([228] ‑ [258]);

   (vii)the elements and operation of the tort of trespass to land ([270] ‑ [323]);

   (viii)whether an award of mesne profits for trespass should be characterised as restitutionary, compensatory, or both, and quantification of that award ([324] ‑ [359]).

The factual background

1. With the exception of one matter, the facts in this trial were largely uncontroversial.  The exception was conversations that Mr Hampton said that he had with the Housing Office operated by BHPBIO.  That issue was the subject of a last minute amendment by the plaintiffs to their unconscionable conduct claim.  It is considered separately in these reasons.

2. The defendants are the owners of the Mount Whaleback Mine in Newman, Western Australia.[4]  The Mount Whaleback Mine is operated and managed by BHPBIO for the defendants.[5]  BHPBIO is not a party to these proceedings although it is a related company to the defendants.  BHPBIO employed Mr Hampton.

   [4] Further re‑amended statement of claim [3]; Re‑amended defence and counterclaim [3(a)].

   [5] Further re‑amended statement of claim [3]; Re‑amended defence and counterclaim [3(b)],[3(c)].

3. On 30 August 1989, Mr Hampton commenced employment with BHPBIO as a mobile plant operator (graders, excavators, dumpers, loading shovels, rigs).[6]  His work for BHPBIO involved maintaining and grading the haul roads,[7] working on excavators and training others in this work,[8] working on mines by building roads for light vehicles,[9] and supervising projects.[10]

   [6] Further re‑amended statement of claim [4]; Re‑amended defence and counterclaim [4(a)].

   [7] Exhibit A (witness statement of Mr Hampton) [16].

   [8] Exhibit A (witness statement of Mr Hampton) [18].

   [9] Exhibit A (witness statement of Mr Hampton) [21].

   [10] Exhibit A (witness statement of Mr Hampton) [19], [22].

4. From 1992 until 1996, Mr Hampton leased a house at 25 Gandawarra Crescent in Newman (the Property).[11]  He lived there with his partner, Ms Lumsden (the second plaintiff), and their child.  In 1996, Mr Hampton heard of a home ownership scheme which was run by the defendants.  He enquired about this and a housing officer wrote to him enclosing explanatory information.  The reply letter emphasised that '[y]ou should note that the Mt Newman Joint Venturers remain the owners of the property until the full purchase price has been paid'.[12]

   [11] Exhibit 1.

   [12] Exhibit 2.

5. On 22 October 1996, Mr Hampton and Ms Lumsden entered a contract with the defendants in relation to the Property.  The terms of that Sale Contract are discussed below.  Broadly, the Sale Contract permitted Mr Hampton to remain in the Property, making regular payments, with the power to call for title and settle a transfer of the Property subject to conditions.  The defendants were, and are, the registered proprietors of the Property.[13]

The 28 June 2010 'Suspension Meeting'

[13] Further re‑amended statement of claim [5]; Re‑amended defence and counterclaim [5].

1. The following matters concerning the 28 June 2010 meeting were admitted on the pleadings.[14]

   [14] Re‑amended defence and counterclaim [10(a)]; Further re‑amended reply [1B(a)].

2. On 28 June 2010, Mr Hampton was called to a meeting with Messrs Bell, Jones and Carroll of BHPBIO.

3. Mr Hampton was advised at that meeting of allegations that he had been speeding on the Mount Whaleback mine site on 12 June 2010, by travelling 120 km per hour in a 60 km zone in breach of BHPBIO's Light Vehicle Policy.  He was told that the breach was a serious one and that it could lead to termination of his employment.  He was also told that he would be stood down immediately pending an investigation into the allegation and that it was possible that his employment would be terminated following the outcome of the investigation.

4. Mr Hampton was also given a written memorandum entitled 'Confirmation of Stand Aside Procedures' which said that '[d]uring any meetings regarding this matter it will be important for you to consider information that you provide in response to allegations carefully as the consideration of your response to the allegations may lead to the termination of your employment'.

The 16 July 2010 'Dismissal Meeting'

1. On 16 July 2010, Mr Hampton was called to attend a meeting with representatives of his employer.  He met with Mr Whittington (Manager of Mining) and Mr Harding (Manager of Human Resources).  Mr Hampton attended with Mr Roulston who supported him.[15]

   [15] Exhibit A (witness statement of Mr Hampton) [94] ‑ [95].

2. I generally accept Mr Hampton's account of the events which then occurred about which there was little dispute.[16]

   [16] Exhibit A (witness statement of Mr Hampton) [96] ‑ [111].

3. Mr Harding presented the case against Mr Hampton.  He explained that the incident had been investigated and that it had been determined that the speed data was correct.  He then told Mr Hampton to leave the room and think about his response which Mr Hampton did.  When Mr Hampton returned he disputed the allegations; he said that it was not possible for that kind of speed to have occurred.  Mr Roulston asked how they knew that the driver was Mr Hampton.  There was then another five minute break.

4. When Mr Hampton returned to the room after the second break, he was told by either Mr Whittington or Mr Harding that it was hard to sack him because of his record but that they had no option.  Mr Whittington said that they had taken everything into consideration but 'if that is your answer then you are terminated'.  It is admitted on the pleadings that Mr Whittington said that Mr Hampton's employment was 'terminated today with 5 weeks' pay in lieu of notice' and that the 'seriousness of the incident requires this'.[17]  Mr Whittington then handed him a letter in an envelope.

   [17] Re‑amended defence [10(b)(i)]; Further re‑amended reply [1B(b)].

5. Mr Hampton begged BHPBIO not to terminate his employment.  He was told that the decision had been made.  Mr Hampton did not read the letter.

Mr Hampton's proceedings in Fair Work Australia and the plaintiffs' continued presence at the Property by consent

1. On 16 July 2010, after the Dismissal Meeting, Mr Hampton took advice about commencing legal proceedings for unfair dismissal.[18]  He was told that he had a case, and he started proceedings in Fair Work Australia.

   [18] ts 150 (Mr Hampton).

2. On 9 August 2010, Mr Ian Baker, the Housing Manager at BHPBIO, wrote to Mr Hampton and Ms Lumsden and explained that vacant possession of the Property was required on or before 31 August 2010.[19]  However, on 27 August 2010, Mr Harding for BHPBIO wrote again to the plaintiffs and confirmed that they were permitted to reside in the Property until the later of 31 December 2010 or 14 days after Fair Work Australia had determined their claim.  A lease agreement, with that term, was enclosed for them to sign.[20]

   [19] Exhibit 27.

   [20] Exhibit 30.

3. On 29 September 2010, Mr Harding wrote again to the plaintiffs explaining that they had not returned the signed lease agreement and that if they do not return the signed lease agreement BHPBIO reserves its rights to evict them from the Property.[21]  The lease agreement was required to be signed and returned by 1 October 2010.

   [21] Exhibit 31.

4. No lease agreement was signed or returned, but the plaintiffs remained in the Property without demur from the defendants or BHPBIO.  In a letter dated 15 July 2011, Mr Baker, the Housing Manager at BHPBIO said to Mr Hampton and Ms Lumsden that 'in view of' Mr Hampton's unfair dismissal application, the Company had 'allowed you to continue to occupy the [Property] until Fair Work Australia made a determination in respect of your application'.[22]  As Mr Baker explained, BHPBIO had been notified on 17 June 2011 that Mr Hampton's unfair dismissal application had been unsuccessful.  He gave Mr Hampton and Ms Lumsden 28 days to vacate the property.

Last minute amendments alleging statements at the Housing Office

[22] Exhibit 40.

1. On 19 March 2012, Mr Hampton filed a witness statement.  In the witness statement he said that 18 months prior to the termination of his employment he became aware of the fact that he could call for the title to the Property.  He said that he knew a neighbour who was in the housing scheme who had called for title early and had sold his house.[23]

   [23] Exhibit A (witness statement of Mr Hampton) [38] ‑ [39].

2. Other matters in Mr Hampton's witness statement involving visits to the Housing Office were disputed by the defendants.

Mr Hampton's evidence of his visit to the Housing Office in January 2009

1. Mr Hampton said that about the time he discovered that he could call for the title to the Property he went to the Housing Office 'and questioned the girl behind the desk about being able to call for the title'.  He said that he could not recall the person to whom he spoke but he remembered being told that he was wasting his time.  The words he quoted in his witness statement were 'even though [he] had the title, it still belongs to BHP'.[24]  Mr Hampton said that he did not pursue the matter any further at that time.

   [24] Exhibit A (witness statement of Mr Hampton) [40].

2. In a supplementary witness statement,[25] Mr Hampton said that on this first visit to the Housing Office (which was three years before his supplementary witness statement) he had met with a 'round faced, heavier set woman' who he estimated was in her mid twenties.[26]  He said that he had told the woman who he was and where he lived and asked her '[i]s it possible to get the title deeds to the house early?'.  She asked why he was bothering with this; she read out clauses on early settlement; and she said words to the effect that 'we can do this but there's no point, even if you have title, it still belongs to BHP'.[27]

Mr Hampton's second visit to the Housing Office around July 2010

[25] Exhibit A1 (supplementary witness statement of Mr Hampton).

[26] Exhibit A1 (supplementary witness statement of Mr Hampton) [2(b)].

[27] Exhibit A1 (supplementary witness statement of Mr Hampton) [2(d)] ‑ [2(f)].

1. Mr Hampton said that between the Suspension Meeting on 28 June 2010 and the Dismissal Meeting on 16 July 2010 he went again to the Town Office to see if he could 'call in the deeds to the Property'.  He said that he was told words by a person behind the desk who he did not know and whose name he did not know:  '[y]ou're on a 15 year contract.  Unless the 15 years passes, it's BHP's house'.[28]  Mr Hampton said that he thought he was wasting his time by pursuing the matter.[29]

Conclusions of fact about the meetings

[28] Exhibit A (witness statement of Mr Hampton) [92].

[29] Exhibit A (witness statement of Mr Hampton) [93].

1. I am satisfied that Mr Hampton was an honest witness.  He was genuinely trying to assist the court and would answer questions to the best of his ability.  However, he struggled with his recollection in a number of important matters.  And his grasp of detail was not strong and was sometimes inconsistent.  For example:

   (i)he mixed up the Suspension Meeting and the Dismissal Meeting dates during cross‑examination;[30]

   (ii)he was inconsistent in his evidence concerning the person who spoke critical words at the Dismissal Meeting;[31]

   (iii)his evidence was that he did not call Ms Lumsden after the 16 July 2010 meeting because she was away and he did not want to ruin her holiday.[32]  This was inconsistent with Ms Lumsden's evidence, which I accept, that Mr Hampton called her that day and said words to the effect of 'they've sacked me'.[33]

   [30] ts 144 (Mr Hampton).

   [31] ts 146 (Mr Hampton).

   [32] ts 147 ‑ 149 (Mr Hampton).

   [33] Exhibit B (witness statement of Ms Lumsden) [61].

2. It is unsurprising that Mr Hampton's evidence was not clear or consistent about events surrounding his employment and the Sale Contract.  He was stunned and felt sick after the Dismissal Meeting.[34]  He had been dismissed from a job which he had held for the previous two decades.  And, at least in relation to the second visit to the Housing Office, the first time he was asked to recall the details was nearly two years later.

   [34] ts 147 (Mr Hampton).

3. Mr Hampton's instructing solicitors also may not have taken any fresh instructions when they earlier made an application for an interlocutory injunction to restrain the defendants from evicting the plaintiffs from the Property.[35]  Mr Hampton had left school after year 10.[36]  He did not have any formal qualifications and was not used to lengthy legal documents.[37]  He was heavily reliant upon his lawyers.

   [35] ts 157 (Mr Hampton).

   [36] ts 157 (Mr Hampton).

   [37] ts 157 (Mr Hampton).

4. I am satisfied that the two visits to the Housing Office to which Mr Hampton referred did occur and that Mr Hampton enquired about calling for title to the Property.  It is unlikely that Mr Hampton was (falsely) told that he could not call for title.  Indeed, the general tenor of Mr Hampton's evidence about the first conversation, and in his supplementary witness statement, suggests that he was told that he could call for title.  I am satisfied that he was told on both occasions that he could call for the title.

5. I also consider that it is likely, especially from the evidence that Mr Hampton was read out 'clauses' (plural) about early settlement, that Mr Hampton was read some of the conditions or qualifications which attached to the transfer of title which would persist until the expiry of the 15 year term.  It may be that Mr Hampton somehow inferred from the reading out of such clauses of the Sale Contract that despite a transfer of title the Property would still 'belong' to the defendants.  But I am not satisfied that words were spoken to him to the effect that 'we can do this but there's no point, even if you have title, it still belongs to BHP' or that '[y]ou're on a 15 year contract.  Unless the 15 years passes, it's BHP's house'.

6. Although this is sufficient to set out my findings of fact on this issue, it is necessary to say something about the background to Mr Hampton's witness statement.  This is because counsel for the plaintiffs appeared to submit that it was not open to disbelieve Mr Hampton, for any reason, on any matter of his evidence in relation to these last minute amendments.

7. On 2 May 2012, fewer than three weeks before trial, counsel for the plaintiffs sought to amend the plaintiffs' case.  The new pleading sought to raise the two visits by Mr Hampton to the Housing Office.  Counsel for the plaintiffs observed[38] that the first visit to the Housing Office had been mentioned in an affidavit of Mr Hampton on 14 July 2011 in which he sought an interlocutory injunction to restrain the defendants from evicting him.[39]  No mention had been made of the second visit in that affidavit.

   [38] ts 57.

   [39] Exhibit A3 (affidavit of Mr Hampton in support of chambers summons for interlocutory injunction) [51]. Tendered without objection.

8. This proposed last minute amendment was a very significant pleading concerning the plaintiffs' allegations of unconscionable conduct.  On 2 May 2012, counsel had been acting for the plaintiffs for at least eight months since she appeared before me at the first directions hearing.  On 2 May 2012, she asserted from the bar table that the reason for the long delay in seeking to amend was that she had only just begun 'to appreciate the importance of this point'.[40]

   [40] ts 67.

9. It was not a clear cut decision to allow the amendment.  But due to the potential significance of the amendment and also due to my view that it was still likely that the defendants could deal with the issue before trial, the amendment was allowed without the usual affidavit material to explain the delay in pleading these matters almost a year on from the interlocutory injunction.

10. On 8 May 2012, two weeks before trial, Mr Hampton filed his supplementary witness statement.[41]  He added further details to the conversations which he alleged to have occurred on each occasion at the Housing Office which I have discussed above.

    [41] Exhibit A1 (supplementary witness statement of Mr Hampton).

11. Two weeks later, at trial, no evidence was called to contradict Mr Hampton on these matters.  Remarkably, counsel for the plaintiffs then relied upon the decision in Jones v Dunkel.[42]  She asserted that an inference should be drawn against the defendants for their failure to call evidence to contradict Mr Hampton.[43]  Her submissions did not mention any of the following:

    (1)That this significant allegation had been pleaded fewer than three weeks before trial.

    (2)That, as part of her submissions in support of the very late amendment based on counsel's late appreciation of the significance of the point, she had submitted that no inference could be drawn against the defendants for an inability to call witnesses.[44]  Counsel never explained in her closing submissions why the assurances she had given to the defendants should be revoked.

    (3)The additional details of Mr Hampton's alleged conversations had been provided in a supplementary witness statement only two weeks before trial.

    (4)The first conversation to which Mr Hampton was referring was more than three years ago and the second conversation was nearly two years ago.

    (5)Mr Hampton had not provided the names of either of the persons to whom he spoke and his description of their physical features was vague.  Mr Hampton took no notes from those meetings.[45]

    (6)That, in opposition to the application to amend, the defendants had explained that the person identified by Mr Hampton at the first meeting might have been one of five women; at the second meeting, one of three women.  Two women in both groups were on extended maternity leave and only one other was still employed by BHPBIO.[46]

    [42] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

    [43] Plaintiffs' closing submissions [233] ‑ [238].

    [44] ts 58.

    [45] ts 134 (Mr Hampton).

    [46] Affidavit of Mr Paul Walker sworn 2 May 2012 [14] ‑ [19].

12. There is no basis for any inference to be drawn against the defendants for their failure to call evidence to rebut Mr Hampton's account of the two visits to the Housing Office.  The rule in Jones v Dunkel only applies where a party is required to explain or contradict something:[47]

    What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts 'requiring an answer'.

    [47] Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; 200 CLR 121, 143 [51] (Gleeson CJ & McHugh J) quoting JD Heydon (ed), Cross on Evidence (6th Australian ed, 2000) [1215].

1. In the circumstances which I have explained above it cannot be said that the failure of the defendants to call any witnesses in response to Mr Hampton's last minute evidence was that 'the most natural inference is that the [defendants] feared to do so'.[48]

   [48] The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239 [1022] (Owen J); Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389, 418 ‑ 419 (Handley JA).

2. Counsel for the plaintiffs also asserted, in apparent reliance upon the 'rule' in Browne v Dunn,[49] that it is not open to the defendants to challenge Mr Hampton's accounts of the two meetings at the Housing Office by alleging that there is no contemporaneous account of those events or that Mr Hampton is unreliable.[50]

   [49] Browne v Dunn (1893) 6 R 67.

   [50] Plaintiffs' closing submissions [229] ‑ [230].

3. This submission misunderstands the 'rule' in Browne v Dunn.  The principle is one of fairness; the court has a broad discretion as to how to respond to any breach of the 'rule'.[51]  In any event there is no unfairness in the challenge by the defendants to the reliability of the evidence of Mr Hampton or their challenge to whether the two meetings occurred (although I have concluded that they did).

   [51] Burke v Corruption and Crime Commission [2012] WASCA 49 [181] ‑ [182] (Buss JA, Martin CJ & Mazza JA agreeing); The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239 [1036] (Owen J); R v Birks (1990) 19 NSWLR 677, 688 ‑ 689 (Gleeson CJ).

4. The tenor of the cross‑examination of Mr Hampton was to the effect that his evidence concerning the two meetings was not reliable.  Indeed, in relation to the second meeting, it was put to Mr Hampton that in neither his witness statement in the Fair Work Australia proceedings, nor in his affidavit in support of the interlocutory injunction, had he mentioned the second visit to the Housing Office.[52]  Mr Hampton had understood the line of questioning as raising a dispute concerning whether the second visit to the Housing Office occurred.  He said '[t]he meeting that I say happened, happened'.[53]

   [52] ts 154 ‑ 155.

   [53] ts 154 (Mr Hampton).

5. In summary, the findings on this point which I have set out at [36] ‑ [37] are the only conclusions of fact and inferences which can be drawn based upon an 'actual persuasion that the fact does … exist'.[54]

   [54] Nguyen v Cosmopolitan Homes (NSW) Pty Ltd [2008] NSWCA 246 [55] (McDougall J, McColl & Bell JJA agreeing).

Issue 1:  When did Mr Hampton's employment terminate?

1. The first question in this case was when Mr Hampton's employment with BHPBIO ceased.  Counsel for Mr Hampton and Ms Lumsden suggested that the date of termination of Mr Hampton's employment was not the date of the Dismissal Meeting (16 July 2010) but was the later date of 5 August 2010 when payment in lieu of notice was made.

2. There were difficulties caused by the manner in which this question was raised.  First, Mr Hampton's employer, BHPBIO, was not a party to these proceedings but had been a party to proceedings in Fair Work Australia where it was held that Mr Hampton had been dismissed on 16 July 2010 and that the dismissal was not 'harsh, unjust or unreasonable'.[55]

   [55] Hampton v BHP Billiton Pty Ltd [2011] FWA 3335.

3. Secondly, there was very little consideration given in submissions to whether the relevant question was when the employment relationship ended or whether the question was when the contract of employment might have terminated.  The two concepts are often coterminous.  But they are not always the same.

4. The language of the Sale Contract was redolent of a relationship of employment (ie the effect of the contract of employment) rather than a concern with the time at which strict contractual rights operate.  The Sale Contract used words such as 'the effective date the Employee ceases to be in the Company's employ' and 'employed by the Company'.  I explain below that the structure and context of the Sale Contract was also concerned with the relationship of employment and the date at which that relationship came to an end rather than the date of termination of the specific contract of employment.

5. Ultimately, the resolution of this issue does not affect my conclusions in this case because of the conclusion I reach below in [213] ‑ [226] where I explain that re‑transfer would have been required in any event.  However, this question precedes, and illuminates, the construction issues which follow and I have expressed my conclusions on it.  Therefore, the question to be addressed in this part of my reasons is the date when the relationship of employment ceased.  The answer is 16 July 2010.

When did the relationship of employment terminate?

1. I have explained above that at the conclusion of the 16 July 2010 Dismissal Meeting, Mr Hampton was told by Mr Whittington that he was 'terminated today with 5 weeks' pay in lieu of notice' and that the 'seriousness of the incident requires this'.  Mr Whittington handed him a letter in an envelope.  Although Mr Hampton did not read the letter, it was part of the objective communications to him on 16 July 2010.  It would have been reasonable for BHPBIO to expect that it would be read on that day.

2. The letter was authored by Mr Whittington.  In the letter, Mr Whittington referred to the 28 June 2010 Suspension Meeting and the allegations that a company vehicle was driven at speeds of up to 125 km per hour.  He described Mr Hampton's response which denied that he was speeding and then concluded:[56]

   The Company has given serious consideration to this matter, however, given the severity of the breach, the Company has elected to terminate your employment.  You should take this letter as confirmation of the termination of your employment.  You will cease work immediately, 16th July 2010 and you will receive five weeks pay in lieu of notice.

   [56] Exhibit 17.

3. The first matter raised by the plaintiffs in relation to this issue was whether Mr Hampton's employment relationship with BHPBIO was terminated immediately on 16 July 2010 or whether it was terminated at the end of the period of notice.

4. In Siagian v Sanel Pty Ltd,[57] in the Industrial Relations Court of Australia, Wilcox CJ explained that there is ambiguity in the words 'payment in lieu of notice'.  One meaning of those words describes a lump sum payment to an employee whom it is proposed to dismiss summarily.  On this meaning, the payment represents the wages the employee would have been given if the notice period required by law had been given.

   [57] Siagian v Sanel Pty Ltd (1994) 122 ALR 333.

5. A second meaning is a 'shorthand way of telling an employee that he is being given the full period of notice to which he is entitled by law but is at the same time excused any duty (and refused any right) that he would otherwise have under his employment contract to attend at the workplace during the notice period'.[58]  This second meaning is sometimes colloquially described as 'gardening leave'.  The employment relationship does not terminate until the end of the period of notice.[59]

   [58] Siagian v Sanel Pty Ltd (1994) 122 ALR 333, 352 (Wilcox CJ); Leech v Preston Borough Council [1985] ICR 192, 196 (Waite J).

   [59] Siagian v Sanel Pty Ltd (1994) 122 ALR 333, 352 (Wilcox CJ); Dixon v Stenor Ltd[1974] ICR 157, 159 (Donaldson J).

6. The first meaning, ie summary termination, is the grammatically correct meaning.  It is sometimes referred to as the 'prima facie position'.[60]  Ultimately, however, the question is one of construction of the words of termination used.[61]  The words used in this case plainly have this construction.

   [60] Siagian v Sanel Pty Ltd (1994) 122 ALR 333, 353 (Wilcox CJ).

   [61] Delaney v Staples [1992] 1 AC 687, 692 (Lord Browne‑Wilkinson); Portal Software International Pty Ltd v Bodsworth [2005] NSWSC 1179 [95] (Brereton J).

7. Mr Whittington had said that Mr Hampton was 'terminated today with 5 weeks' pay in lieu of notice'.  The letter also referred to termination of employment twice in the context of ceasing work immediately.  To use the example of Sir John Donaldson, if BHPBIO had changed their mind and said to Mr Hampton the next day that it wanted him to come in to work, Mr Hampton would have been entitled to say 'I am not employed by you.  I was dismissed'.[62]

   [62] Dixon v Stenor Ltd[1974] ICR 157, 158 (Donaldson J).

8. The words used by Mr Whittington, and in the letter, also contrast with the words used at the 28 June 2010 Suspension Meeting when Mr Hampton was told that he would be 'stood down'.

9. The test is objective but, in any event, Mr Hampton understood the words at the Dismissal Meeting as having that effect.  He said in his witness statement that he knew his employment was over and that he was not to return to work again.[63]  Eleven days later he commenced new employment with a different employer.[64]

   [63] Exhibit A (witness statement of Mr Hampton) [113].

   [64] Exhibit A (witness statement of Mr Hampton) [139].

10. Counsel for the plaintiffs relied upon Mr Hampton's receipt of his usual fortnightly pay the day following the 16 July 2010 Dismissal Meeting, ie 17 July 2010, including the deduction of $106.41 for payment of the Property.[65]  This automated payment is insufficient to alter retrospectively the fact of termination of the employment relationship.  Nor could the mere act of payment contradict the clear and express words of immediate termination which had been used the previous day.

Was it possible for the relationship of employment to terminate with immediate effect?

[65] Exhibit A (witness statement of Mr Hampton) [115].

1. The second issue raised by the plaintiffs was whether it was possible for Mr Hampton's employment to be terminated with immediate effect. Section 117 of the Fair Work Act 2009 (Cth) relevantly provides:

   117Requirement for notice of termination or payment in lieu

   Notice specifying day of termination

   (1)An employer must not terminate an employee's employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).

   Amount of notice or payment in lieu of notice

   (2)The employer must not terminate the employee's employment unless:

   (a)the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or

   (b)the employer has paid to the employee (or to another person on the employee's behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee's behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.

2. Counsel for the plaintiffs focused upon the words 'has paid' in s 117(2)(b). She submitted that the termination had no effect until payment was made on 5 August 2010.[66]  She made the same argument in relation to the use of the words 'or by payment by the Company to you' in Mr Hampton's Australian Workplace Agreement.  Mr Hampton's contract of employment with BHPBIO was dated 27 September 2007.  It was incorporated into Mr Hampton's Australian Workplace Agreement.[67]  It provided as follows:

   Subject to any greater notice period required to be given pursuant to the Workplace Relations Act 1996 (Cth) your employment may be terminated by either party giving four weeks' notice in writing, or by payment by the Company to you or the forfeiture by you of four weeks' salary in lieu of such notice, as the case may be.

   In the case of serious misconduct, the Company may terminate your employment immediately and in such circumstances payment shall be made up until the time of dismissal only.  (emphasis added)

   [66] Plaintiffs' written closing submissions [155].

   [67] Exhibit 11.

3. It was common ground that the opening words '[s]ubject to any greater notice period' applied the greater notice period of five weeks which was required by s 117(3) of the Fair Work Act, which replaced the Workplace Relations Act 1996 (Cth).

4. Counsel for the plaintiffs argued that Mr Hampton's employment could not have terminated until 5 August 2010 because until that date BHPBIO had not made actual payment of the promised payment in lieu of notice.

5. I do not accept this submission. If there were a failure to comply with s 117(1) then this would place BHPBIO in breach of its statutory obligations. But it would not prevent the employment relationship from terminating. The same is true of the words 'or by payment by the Company to you' in Mr Hampton's employment contract. BHPBIO would be in breach of its contractual obligations by failing to make immediate payment if actual payment in lieu of notice were required. But this would not prevent the employment relationship from coming to an end.

6. In Byrne v Australian Airlines Ltd,[68] Brennan CJ, Dawson and Toohey JJ explained that, apart from exceptional situations, it has not been doubted in Australia that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract.

   [68] Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 427 (Brennan CJ, Dawson & Toohey JJ); Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435, 454 (Latham CJ), 469 (Dixon J); Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177, 191 ‑ 192 (the Court); Siagian v Sanel Pty Ltd (1994) 122 ALR 333, 342 ‑ 345 (Wilcox CJ).

7. An exceptional situation where a wrongful dismissal did not terminate the employment relationship was in Automatic Fire Sprinklers Pty Ltd v Watson.[69]  But, as Brennan CJ, Dawson and Toohey JJ explained in Byrne, that case was quite exceptional.  In the majority, Dixon J had explained that it was only due to previous authority, which he considered binding, that he applied a construction of wartime regulations which prevented the unlawful discharge of the employment relationship.[70]

   [69] Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435.

   [70] Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435, 471.

8. This case is not such an exceptional circumstance.  The termination of the employment relationship by BHPBIO, even if wrongful, brought the employment relationship to an end.  As Heydon, Crennan, Kiefel and Bell JJ reiterated in Visscher v Honourable President Justice Giudice,[71] termination of an employment relationship and the discharge of a contract of employment are different concepts.

   [71] Visscher v Honourable President Justice Giudice [2009] HCA 34; (2009) 239 CLR 361, 379 [53].

9. A different approach was taken in Byrne by McHugh and Gummow JJ.  Their Honours started from the position that where an act is prohibited by statute then in the absence of some indication of intention to the contrary, the purported act is illegal and void.  However, their Honours held that the employment relationship still terminated even if the termination were prohibited because it was 'harsh, unjust or unreasonable'.  They said that 'it would be an impractical intention to impute to the award‑maker that the validity, as distinct from the lawfulness, of a termination of employment would have to await the outcome of proceedings for breach of an award'.[72]

   [72] Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 457.

10. The same result applies in this case even on the alternative approach of McHugh and Gummow JJ.  It would be an extremely impractical intention to impute to the legislature that a relationship of employment could not terminate if the employer did not make timely payment of the sum promised to be paid in lieu of notice.

11. In summary, even if an immediate termination at the 16 July 2010 Dismissal Meeting was in breach of s 117(2)(b) of Mr Hampton's Australian Workplace Agreement, the words used by BHPBIO at the Dismissal Meeting could only reasonably have had the effect of communicating an immediate termination of the employment relationship. It is impossible to construe them otherwise. Therefore the employment relationship between Mr Hampton and BHPBIO terminated on 16 July 2010.

12. For these reasons, the effect of this conclusion is the same irrespective of whether BHPBIO (which was not a party to this case) was in breach of s 117(2)(b) of the Fair Work Act or in breach of Mr Hampton's Australian Workplace Agreement by failing to pay Mr Hampton five weeks of pay in lieu of notice at the time of termination.  Therefore, it is not necessary to decide whether BHPBIO was in breach of either of those obligations.  It suffices to mention two reasons why it might not have been in breach.

13. First, it is arguable, and I put it no higher than that, that the words that 'the employer has paid' could mean 'the employer has undertaken to pay'. The original form of s 117 of the Fair Work Act was s 170DB of the Industrial Relations Act 1988 (Cth). That section also required that the employee 'has been given either the period of notice … or compensation instead of notice'. The international convention to which s 170DB gave effect was concerned to provide an employee with an entitlement to payment in lieu of notice.[73]

    [73] Convention Concerning Termination of Employment at the Initiative of the Employer (reproduced as sch 10 to the Industrial Relations Act 1988 (Cth) article 11 'shall be entitled to a reasonable period of notice or compensation in lieu thereof' (emphasis added). See also the Recommendation Concerning Termination of Employment at the Initiative of the Employer (reproduced as sch 11 to the Industrial Relations Act 1988 (Cth)).

14. Secondly, it is also arguable, and again I do not put it any higher than that, that if a claim were brought against BHPBIO for breach of s 117(2)(b) or for breach of Mr Hampton's Australian Workplace Agreement, then BHPBIO could defend the claim on the basis that no payment was required to be made at all. The defendants submitted that the basis of this defence would be that even though BHPBIO promised five weeks' pay in lieu of notice it had a power to terminate Mr Hampton's employment without notice for serious misconduct.[74]

    [74] Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 176 ALR 693, 701 [28] ‑ [29] (Gleeson CJ, Gaudron & Gummow JJ).

Issue 2:  The construction of the Sale Contract

1. The central issue raised by the plaintiffs was that the proper construction of the Sale Contract permitted the plaintiffs to affirm it at any time before termination or, if termination was immediate, to affirm for a reasonable period afterwards.

The operation of the Sale Contract in broad overview

1. In very broad overview, the Sale Contract is between the Purchaser (the plaintiffs) and the Vendor (the defendants).

2. The first substantive clause of the Sale Contract is cl 2, entitled 'Sale and Purchase'.  It provides that the 'Vendor agrees to sell and the Purchaser agrees to purchase the Property for the Purchase Price on the following terms and conditions'.  Those terms and conditions impose numerous restrictions upon the purchase of the Property.  They also confer numerous benefits on the Purchaser.

3. An example of a restriction on the Purchaser is cl 8.  That clause provides that even if the Purchaser has paid the full purchase price and obtained title to the Property, the Purchaser cannot assign, sell, transfer, or mortgage the Property during the 15 year term of the Sale Contract without the Vendor's prior written consent.

4. An example of a benefit to the Purchaser is that if the contract is terminated under cl 9, the Purchaser is entitled to a Net Termination Refund.  The Net Termination Refund is contained in an appendix to the Sale Contract.  It is a refund of the total of all the principal payments made by the Purchaser ($41,500 if the contract proceeds to the end of the 15 year term) with an additional premium amount ($70,135 if the contract proceeds to the end of the 15 year term), as well as an amount representing the cost of approved improvements made by the Purchaser.

The Sale Contract terminated on 16 July 2010

1. At the heart of the case is cl 9 of the Sale Contract.  That clause was the focus of detailed submissions and it is necessary to set it out in full:

   9TERMINATION OF THIS AGREEMENT

   (a)The Purchaser may, at any time during the Guarantee Period whilst the Employee is employed by the Company and occupies the Property, terminate this Agreement by letter to the Vendor referring to this Clause and calling upon the Vendor to pay the Net Termination Refund and the Agreement shall be terminated as at the date vacant possession of the Property is given to the Vendor.

   (b)If during the Term of this Agreement the Employee ceases to occupy the Property for more than 7 consecutive days then, unless the non‑occupation is due to illness or Company authorised activities including Company business, or during the Employee's annual holiday and long service leave or during public holidays, the Vendor may by letter to the Purchaser referring to this Clause terminate this Agreement on 14 days' notice and shall upon such termination retake possession of the Property and pay the Net Termination Refund to the Purchaser.

   (c)Subject to paragraph (e), if during the first 10 years of the Term of this Agreement the Employee ceases to be employed by the Company for any reason including dismissal or resignation but not including death or retirement at the Retirement Age then the Vendor and Purchaser agree that this Agreement shall be deemed to be terminated on the date of such cessation of employment with vacant possession of the Property to be given to the Vendor within 28 days of the effective date the Employee ceases to be in the Company's employ.

   (d)Subject to paragraph (e), if during the last 5 years of the Term of this Agreement the Employee ceases to be employed by the Company for any reason including dismissal or resignation but not including death or retirement at the Retirement Age then the Purchaser may elect to terminate this Agreement no later than the effective date the Employee ceases to be in the Company's employ unless the Purchaser has sold the Property to a third party as set out in Clause 10 PROVIDED THAT if the Purchaser fails to make such election then the Purchaser shall on the last day on which the Purchaser was entitled to do so be deemed to have made such election and this Agreement shall be terminated with vacant possession of the Property to be given to the Vendor within 28 days of the effective date the Employee ceases to be in the Company's employ.

   (e)The provisions of paragraphs (c) or (d) shall not apply if, and only if:

   (i)the Employee on ceasing to be in the Company's employ commences in the employ of a Related Corporation; and

   (ii)prior to the Employee ceasing to be in the Company's employ, the Purchaser is issued with written notice by the Company (such issue of notice being in the Company's absolute discretion) that the provisions of this paragraph (e) are to apply; and

   (iii)within 45 days (or such longer period agreed to in writing by the Company in its absolute discretion) of the Employee ceasing to be in the Company's employ, the Purchaser executes such document or documents, in a form approved by the Company, whereby the Purchaser's purchase of the Property ceases to be tied to the Employee being in the employ of the Company and instead is tied to the Employee being in the employ of a Related Corporation.

   (f)Upon termination of this Agreement pursuant to this Clause or Clause 11:

   (i)the Purchaser shall deliver vacant possession of the Property to the Vendor in the same reasonable standard of maintenance as existed at the Possession Date within 14 days of termination under paragraph (b) or within 28 days of termination under paragraph (a);

   (ii)the Vendor shall pay the Net Termination Refund to the Purchaser within 1 calendar month of vacant possession being given to the Vendor under this Clause, by ordinary cheque either delivered to the Employee or posted to a forwarding address notified to the Vendor by the Employee;

   (iii)the Vendor shall be liable for all rates and taxes from the date vacant possession of the Property is given to the Vendor.

2. Focusing upon cl 9(d), it is uncontroversial that:

   (i)Mr Hampton was in the last five years of the term of the Sale Contract (he was almost at 14 years of the 15 year term);

   (ii)Mr Hampton had ceased to be employed by BHPBIO 'for [a] reason including dismissal'; and

   (iii)Mr Hampton had not sold the Property to a third party.

3. For the eight reasons below, the proper construction of cl 9(d) is that the Sale Contract terminated upon the termination of Mr Hampton's employment on 16 July 2010.

4. The first seven reasons involve a close focus upon the words of cl 9(d) and their context within the Sale Contract:  'the whole of the instrument has to be considered since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another'.[75]  The eighth reason involves consideration of the surrounding circumstances and object of the Sale Contract.

1. The literal meaning of the key words in cl 9(d)

   [75] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 (Gibbs J).

1. There is a plain literal meaning of the words of cl 9(d) that 'the Purchaser may elect to terminate this Agreement no later than the effective date the Employee ceases to be in the Company's employ'.  The literal meaning of the words is that the plaintiffs (as Purchaser) had an election to terminate the Agreement no later than 16 July 2010, which I have found to be the effective date that Mr Hampton ceased to be in the employ of BHPBIO.  'Elect to terminate' does not mean 'elect to affirm' or 'elect to continue'.  Its meaning is precisely the opposite.

2. If the plaintiffs failed to make an election to terminate then the Sale Contract was deemed to have been terminated on 16 July 2010.

1. The meaning of cl 9(d) in its entirety

1. Another reason why the reference to an 'election to terminate' in cl 9(d) means only what it says is that later in that clause the deeming provision provides that 'the Purchaser shall ... been deemed to have made such election and this Agreement shall be terminated' (emphasis added).  The words 'such election' in the deeming provision show that the election of the Purchaser is only an election which has the effect of terminating the Sale Contract.

1. Contrast with cl 9(a) and cl 9(b)

1. A further reason why cl 9(d) is concerned only with an election of the Purchaser to terminate, or otherwise automatic termination, is the contrast between that provision and cl 9(a) and cl 9(b).  The latter two sub‑clauses are concerned with voluntary termination.  They have different mechanisms for, and consequences of, termination from the mechanisms in cl 9(d).  The contrast illustrates the nature of the election in cl 9(d) as, effectively, an election to terminate which will still occur otherwise, although not necessarily at the time of election.

2. Clauses 9(a) and 9(b) provide for a choice by, respectively, the Purchaser and the Vendor whether to terminate or not without the alternative of automatic termination.  Neither cl 9(a) nor cl 9(b) uses the language of election to describe this unforced choice.  Both sub‑clauses say that the relevant party 'may' terminate.  Both sub‑clauses require a letter to the other party advising of such a decision to terminate.  Specific provision is also made in cl 28 for the nature of such a letter.  Both of these provisions provide for a period before the termination takes effect.  In cl 9(a) it takes effect only upon vacant possession; in cl 9(b) it takes effect only after 14 days' notice.  Further, when cl 9(f)(i) refers to the standard of maintenance required upon vacant possession after termination of the Sale Contract, it refers only to cl 9(a) and cl 9(b).

3. In contrast, there is no provision in cl 9(c) or cl 9(d) for the manner in which the Vendor will be notified of any 'election' to terminate the Sale Contract, whether by letter or notice.  Nor is there any provision for a period of time before the termination will take effect.  Nor is there any reference in cl 9(f)(i) for the standard of maintenance required upon vacant possession.  All of these matters suggest that both cl 9(c) and cl 9(d) are concerned with automatic termination.  They suggest that the 'election' in cl 9(d) is a means only to achieve a termination which must otherwise occur.

1. Clause 9 read as a whole

1. Clause 9, read as a whole, is concerned with only one subject:  termination, not affirmation.

2. First, cl 9 is headed 'Termination of this Agreement'.

3. Secondly, cl 9(a) is essentially concerned with termination of the Sale Contract by the Purchaser during the Employee's employment.

4. Thirdly, cl 9(b) is essentially concerned with termination of the Sale Contract by the Vendor if the Employee ceases to occupy the Property.

5. Fourthly, cl 9(c) is concerned with termination of the Sale Contract during the first 10 years of the Sale Contract.

6. Fifthly, cl 9(e) is concerned with exceptions to termination of the Sale Contract including an exception to termination under cl 9(c).

7. Sixthly, cl 9(f) is concerned with matters following termination including (1) the standard of maintenance for vacant possession where the Purchaser or Vendor has terminated (cl 9(f)(i)); (2) the payment of a Net Termination Refund (cl 9(f)(ii)); and (3) the Vendor's liability for all rates and taxes from the date of vacant possession (cl 9(f)(iii)).

8. Seventhly, elsewhere in the Sale Contract where reference is made to cl 9, it is assumed that the subject matter of that clause is only termination and not the possibility of affirmation.  For instance, cl 13 provides for a power for the Purchaser to require the Vendor to repurchase after settlement with payment of the Net Termination Refund as if the agreement had 'been terminated pursuant to Clause 9'.

9. In light of these seven matters, the overwhelming inference is that the subject matter of cl 9(d) is also concerned only with the circumstances which will bring the Sale Contract to an end.  There is nothing in the remainder of cl 9 which could suggest that cl 9(d) is concerned with a circumstance in which the Sale Contract could be continued or affirmed.

1. The cl 9(e) exception

1. The conclusion immediately above is further reinforced by cl 9(e).  That sub‑clause is concerned with the circumstances in which the Sale Contract will not terminate.

2. If cl 9(d) involved a power to elect to continue the Sale Contract then this would be inconsistent with the exception in cl 9(e).  Clause 9(e) is expressed as a narrow exception to cl 9(d) ('if and only if').  It applies only if:

   (i)the employee commences new employment in a related corporation;

   (ii)prior to the employee ceasing to be in BHPBIO's employ, BHPBIO exercises a discretion to issue a notice that cl 9(e) applies; and

   (iii)within 45 days of the employee ceasing to be in BHPBIO's employ, the Purchaser executes a document providing that the purchase of the Property is no longer tied to BHPBIO and is now tied to employment with the related corporation.

3. It would be inconsistent with this narrow and particular exception to termination of the Sale Contract if under cl 9(d) the Purchaser had a general power to continue or to affirm the Sale Contract, without any specific requirements, upon the employee ceasing employment with BHPBIO and not taking up any employment with a related corporation.

1. The need for consistency between cl 9(d) and cl 11

1. Clause 11 provides for the possibility for settlement of the Property in two circumstances after the employee has ceased to be employed by BHPBIO.  The first is death.  The second is retirement.  These are two specific exclusions from the operation of termination under cl 9(d).

2. Clause 11(a) provides that a Legal Personal Representative can call for settlement after the death of the employee, provided that (i) the call for settlement is within six months of the employee's death; (ii) the call for settlement is by written notice to the vendor; (iii) the call for settlement is accompanied by a bank cheque to the vendor for the outstanding balance and interest; and (iv) the Vendor is satisfied that a dependent of the deceased employee intends to remain in occupation.

3. Clause 11(b) provides that a retiring employee can call for settlement provided that (i) at least five years exists between the Possession Date and retirement; (ii) the Vendor is satisfied that the retired employee intends to remain in occupation of the Property, and (iii) within 28 days of retirement the Purchaser gives the Vendor written notice and a bank cheque for the balance of the purchase price and any outstanding interest.

4. Clause 11(c) provides that if the spouse of the deceased employee is also a full time employee of BHPBIO then he or she can 'at that Purchaser's option', and by written notice to the Vendor, take over the Sale Contract.

5. There are two aspects of cl 11 which illustrate that the 'election' in cl 9(d) must be construed only as an election to terminate and not as including an election to affirm.

6. The first aspect of cl 11 that illustrates the narrow nature of the cl 9(d) election to terminate is as follows.  Clause 11 exempts the Sale Contract from termination despite the cessation of employment but only in very limited and particular situations of retirement and death.  It subjects those two situations to significant limitations.  As an exception to cl 9(d) it is very limited.  The corollary is that it is not reasonable for cl 9(d) to be construed to provide for a general, unrestrained power for a dismissed employee to continue the Sale Contract upon dismissal.

7. The second aspect of cl 11 that illustrates the narrow nature of the cl 9(d) election to terminate is the stark contrast between, for instance, an employee dismissed for serious misconduct and an employee who retires or dies after long service to BHPBIO.  It would be an astonishing result if cl 9(d) permitted the dismissed employee to continue the Sale Contract but cl 9(d) imposed significant restrictions upon the retiring employee (such as satisfying the Vendor of an intention to remain in the Property) or deceased employee's representative (such as satisfying the Vendor of a dependent's intention to remain in the Property).

1. The Sale Contract is tied to the employment of the Employee

1. Read as a whole, the Sale Contract demonstrates a strong association between (i) the occupation of, and power to purchase, the Property, and (ii) a continued relationship of employment between Mr Hampton and BHPBIO.

2. First, under cl 9(b), if the employee ceases to occupy the Property during employment for only seven days, then the Vendor can retake possession of the Property.  The exceptions to this non‑occupation are all employment related:  illness; BHPBIO authorised activities, including BHPBIO business; annual holidays; long service leave; and public holidays.

3. Secondly, cl 9(e)(iii) specifically describes the purchase of the Property as 'tied to the Employee being in the employ of [BHPBIO]'.

4. Thirdly, cl 11 permits, subject to various restrictions, a retiring employee, or employee who dies, to call for settlement.  Again, the emphasis is upon the employment with BHPBIO.  Even the retiring employee is only entitled to call for settlement if more than five years of the Sale Contract has elapsed and the retiring employee satisfies the Vendor that he or she intends to live in the Property.

5. Fourthly, cl 28(a) of the Sale Contract provides, in part, that any letter or notice given by a Purchaser who is not an employee shall be of no force or effect whatsoever.  The effect of this is that joint purchasers such as Mr Hampton and Ms Lumsden could only act through the actions of the employee, Mr Hampton.  And those actions were only possible through the employee, Mr Hampton.

6. Fifthly, the extrinsic materials to which I refer below also support the tie between the employment relationship of the employee and BHPBIO and the Sale Contract.

1. Extrinsic materials and common knowledge of the parties

1. Counsel for the plaintiffs resisted the submission that the court could consider extrinsic materials on the basis that the meaning of the Sale Contract is unambiguous.[76]  Presumably, this submission was that an election to 'terminate' unambiguously includes an election to 'continue'.  I do not accept this submission.  'Continue' is a natural antonym of 'terminate'.  The highest that the plaintiffs' case can be put is that the words of cl 9(d), including 'elect' and 'terminate', are susceptible of more than one interpretation.

   [76] Plaintiffs' closing written submissions [83], relying upon Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 and Western Export Services Inc v Jireh Pty Ltd [2011] HCA 45; (2011) 282 ALR 604. The plaintiffs did not mention the important discussion in McCourt v Cranston [2012] WASCA 60 [13] ‑ [24] (Pullin JA, Newnes JA agreeing).

2. Prior to entry into the Sale Contract, Mr Hampton was provided with a promotional brochure which explained how the Sale Contract worked.[77]  In a section entitled 'The Offer and its advantages' the brochure said that '[i]f you are a Company employee you can take advantage of the Scheme'.  It continued '[i]f you leave your employment with the Company ... the Vendor will guarantee a termination refund'.

   [77] ts 136 (Mr Hampton); Exhibit 1 (witness statement of Mr Hampton) [33]; Exhibit 2; Exhibit A3 (affidavit of Mr Hampton) annexure NCH 13.

3. There was also a section entitled 'Termination from the scheme'.[78]  That section explained that the Sale Contract 'guarantees payment of pre‑determined termination sum by the Company at any time up to 20 years from the date of purchase'.  The section continued:

   If you terminate your employment, you will be required to terminate your Contract, and all monies due to you under the Scheme will be paid within 30 days of your giving vacant possession of the property to the Company.

   [78] Exhibit 2, page 11; Exhibit A3 (affidavit of Mr Hampton) annexure NCH 13, page 83.

4. Although that section spoke of the employee terminating employment and the employee leaving his or her employment, the brochure, read as a whole, conveyed the impression that the scheme was tied to the employment relationship between the purchasing employee and BHPBIO.

5. Further, a reasonable person would not expect that a hypothetical employee who chose to leave BHPBIO in circumstances of general goodwill would be in a worse position than a hypothetical employee whose employment relationship was terminated summarily for serious misconduct.  In cross‑examination, Mr Hampton also said that it was 'common knowledge' from the Sale Contract and the brochure that if he did not work for BHPBIO any more then he could lose the Property.[79]

Submissions concerning difficulties with this construction

[79] ts 138 (Mr Hampton).

1. For the eight reasons above, the construction of cl 9(d) has the effect that the Sale Contract terminated on 16 July 2010.  Although cl 9 involves some ambiguity, the terms of cl 9 and its object and purpose have the effect that the reasonable person would understand the language in which the parties have expressed their agreement[80] as requiring that the Sale Contract terminate upon the termination of Mr Hampton's relationship of employment with BHPBIO.

   [80] As the test has been reiterated in Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451, 461 ‑ 462 [22] (the Court); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, 179 [40] (the Court); International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151, 160 [8] (Gleeson CJ), 174 [53] (Gummow, Hayne, Heydon, Crennan & Kiefel JJ).

1. The 'correct view', as it was described by Dixon J in the context of trespass to goods (trespass de bonis) in Penfolds Wines Pty Ltd v Elliott,[244] is that the only situations where personal detention of the goods by the plaintiff before the trespass is not required are those where the plaintiff possesses through a servant, agent or bailee in possession.[245]

   [244] Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204.

   [245] Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204, 226 ‑ 227, see also 216 ‑ 217 (Latham CJ), 221 (Starke J), 234 (McTiernan J), 242 (Williams J).

2. As Lightwood explained a century ago, the same qualification, deriving from Roman law, applied to the requirement that persons could not bring a claim for trespass to land until they were in occupation.  A person could occupy land through his or her servant or agent.[246]

   [246] J Lightwood A treatise on the possession of land (1894) 2 ‑ 3.

3. In this case, the counterclaimants were not in physical occupation or control of the Property.  They never sought an order for possession entitling them to evict Mr Hampton and Ms Lumsden from occupation.  For this reason also, their counterclaim must fail.

The physical element of occupation in a claim for mesne profits

1. The counterclaimants also disputed that any physical element of occupation or entry was required for an action for mesne profits.  A simple answer might be that the action for mesne profits is no more than an action for damages for trespass.  If trespass is unavailable then so too is the action for mesne profits.  Unsurprisingly, this is exactly the position of long‑standing authority, and has been applied in the High Court of Australia.

2. Since trespass rested upon the requirement of actual occupation, the claim for mesne profits was always brought after re‑entry and usually after a successful writ of ejectment.  Wright LK explained in 1667 that mesne profits arise 'when one has a Title to the Possession of Lands, and makes an Entry, whereby he becomes intitled to recover Damages'.[247]  Bullen and Leake set out the pleading as:[248]

   That the defendant broke and entered a messuage [dwelling house] of the plaintiff, that is to say, and ejected the plaintiff from his possession thereof, and kept him so ejected for a long time, and during that time took and received to the use of the defendant all the issues and profits and the beneficial use and occupation of the said messuage and land; whereby the plaintiff during all that time lost and was deprived of the issues and profits and the beneficial use and occupation thereof, and was prevented from letting the same, and incurred great expense in bringing an action to recover possession of the said land and messuage, and in recovering possession thereof.

   [247] 'Mesne Profits' (1667 ‑ 1744) 2 Eq Ca Abr 588, 588; 22 ER 495, 495.

   [248] Bullen and Leake Precedents of Pleadings (3rd ed, 1868) 421 ‑ 422.

3. It has been observed that the requirement that a plaintiff must prove actual possession (occupation) in order to succeed in a claim for mesne profits caused an imbalance by giving great weight to actual possession over the right to possession.  As John Fleming explained in 1957,[249] in passages maintained in nine subsequent editions of his book, [250] a fiction arose which partially redressed this imbalance.  The fiction was that once the plaintiff had entered into occupation the plaintiff was deemed to have been in occupation since the right to possess accrued.[251]  This is the fiction of trespass by relation.  The corollary to this fiction was that it was necessary for the plaintiff to have re‑entered the land before suing for mesne profits or trespass.  Collins MR explained this principle allowing recovery of backdated profits in these terms:[252]

   The plaintiff may recover them if he proves his title to the possession at the time the profits were so taken, and also the execution of the writ of possession or actual possession taken ... the person so entering and taking possession was entitled thereby to those profits at the time they arose, and that there can only be relation back of the entry to the actual title against the wrong‑doer.

   [249] J Fleming, Fleming on Torts (1957) 47, 53.

   [250] See C Sappideen and P Vines (ed) Fleming's The Law of Torts (10th ed, 2011) 54 [3.50].

   [251] J Lightwood A treatise on the possession of land (1894) 7 ‑ 8.

   [252] Ocean Accident and Guarantee Corporation v Ilford Gas Company [1905] 2 KB 493, 498 ‑ 499.

4. In the context of mesne profits, the leading Australian case establishing the requirement of proof of occupation is the decision of Taylor J in the High Court of Australia in Minister of State for the Interior v R T Co Pty Ltd.[253]  In that case the Commonwealth compulsorily acquired land owned by R T Company Pty Ltd.  The compulsory acquisition occurred on 14 October 1948.  There was a multi‑storey building on the land called Rolfe's Building.  Although the Commonwealth obtained actual occupation of the other floors of Rolfe's Building, it did not obtain occupation of the basement.

   [253] Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1.

5. The occupation of the basement from 14 October 1948 was by defendants including Radio City Pty Ltd, which leased the basement to the defendant R T Company.  R T Company occupied part of the basement and sublet the remainder.

6. On 25 July 1956, the Commonwealth brought a claim for mesne profits arising from the defendants' occupation of the basement in trespass.

7. On 20 June 1957 the Commonwealth obtained occupation of the basement.  The statement of claim was then amended to seek mesne profits for the whole period of the defendants' occupation of the basement from 14 October 1948 until 20 June 1957.  The claim failed.

8. The reason why the claim failed was that at the time the writ was issued the Commonwealth had not entered into actual possession or occupation.  As Taylor J explained, a claim for mesne profits cannot succeed unless a plaintiff proved that 'pursuant to a right to do so he had entered into possession'.[254]  The writ was brought on 25 July 1956 but the Commonwealth did not obtain possession of the basement floor until 20 June 1957.

   [254] Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1, 6.

9. Although the claim for mesne profits involved the fiction that once in possession the plaintiff 'is deemed ... to have been in possession ever since his right to possession arose',[255]  it was clearly established that the 'relation back' fiction arose only once the plaintiff has entered into actual possession, ie occupation.[256]  Since the Commonwealth was not in occupation at the time the writ was issued there was no cause of action at that time; it was 'incumbent upon the plaintiff to establish the existence of his cause of action as at the date of his writ'.[257]

   [255] Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1, 5.

   [256] Tharpe v Stallwood (1843) 5 Man & G 760, 774 ‑ 775; 134 ER 766, 772 ‑ 773 (Coltman J); Barnett v The Earl of Guildford (1855) 11 Ex 19; Dunlop v Macedo (1891) 8 TLR 43; Ocean Accident and Guarantee Corporation v Ilford Gas Company [1905] 2 KB 493, 498 ‑ 499 (Collins MR); Wynne v Green (1901) 1 SR (NSW) 40; Ebbels v Rewell [1908] VLR 261.

   [257] Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1, 7 (Taylor J)

10. The decision in Minister of State for the Interior v R T Co Pty Ltd has been subsequently applied[258] and the High Court has iterated[259] and reiterated[260] that a claim for mesne profits is one which can only be brought when physical possession is recovered or after an action is brought to recover possession.

    [258] Oliveri v Jones [1999] NSWSC 154 [24] (Master Macready).

    [259] Bowtell v Goldsbrough, Mort & Co Ltd [1905] HCA 60; (1905) 3 CLR 444, 453 (Griffith CJ), 459 ‑ 460 (O'Connor J).

    [260] Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17, 39 (Brennan J).

11. The counterclaimants' supplementary submissions also sought the creation of a new exception to the requirement of occupation for an action for trespass.  The suggested exception was where 'entry is impossible because the plaintiff's title to possession has since terminated'.[261]  The 'authority' cited by the counterclaimants for this purported exception was a superseded edition of Fleming on Torts from 1998.  No mention was made of the latest edition of Fleming on Torts or of the passage in it which explains that trespass is not committed by 'a person lawfully in possession of land who omits or refuses to give it up at the termination of his interest:  a lessee, for example, who holds over may be liable in an action of ejectment, but not trespass'.[262]

    [261] Defendants' further supplementary submissions [27].

    [262] C Sappideen and P Vines (ed) Fleming's The Law of Torts (10th ed, 2011) 52 [3.40].

12. The exception the counterclaimants urged also goes some way beyond a possible new exception mooted by Taylor J in Minister of State for the Interior v R T Co Pty Ltd 'in the case of a plaintiff whose title had expired before an entry had been made'.[263]

    [263] Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1, 6 (emphasis added).

13. The basis upon which the counterclaimants urged the recognition of this new exception was by giving an example of a landlord who entered a new lease with a tenant who overstayed.  If the new lease did not include provision for the intermediate period in which the tenant overstayed then it was suggested that there would be an unjust outcome if the tenant could not be sued for trespass for mesne profits for the intermediate period.

14. It is enough to say that there is nothing unjust about the unavailability of such a claim.  The landlord has a choice whether to include provision for payment by the tenant for the intermediate term in the new lease, or to bring an action to retake possession from the tenant and subsequently to claim mesne profits, backdated to the time that his or her right to possession accrued.  And there is certainly no unfairness, or trespass, where the tenant's period of overstaying is with the consent of the landlord as occurred in this case.  But even if there were, it is unclear whether Mr Hampton and Ms Lumsden's current occupation of the Property is under a lease or a licence.  If it is a licence then the counterclaimants' right to possession has not been terminated.

15. The counterclaim must be dismissed.

Quantification of the counterclaim

The different quantifications of the award

1. Although the counterclaim must be dismissed, substantial submissions were filed by the parties concerning quantification of damages and it is appropriate that quantum be assessed.

2. The cooperation between the parties on this issue was laudable.  It saved considerable time and expense.  Counsel and legal representatives are to be commended on the manner in which this aspect of the case proceeded.

3. The parties agreed on two essential matters of quantification over the period of alleged trespass for which mesne profits were claimed:  1 September 2010 to 16 June 2011 inclusive:[264]

   (1)The market rent for the Property, exclusive of GST, for the period was $1,650 per week.  The total rent at this rate over the period would be $66,235.71.

   (2)If Mr Hampton and Ms Lumsden had not been in possession of the Property during the Period, the counterclaimants would have inspected the Property, performed maintenance, and then leased the Property to an employee of BHPBIO for a rent of $70 per week (excluding GST).  The total rent over the period would be $2,531.

   [264] Statement of Agreed Facts [1] ‑ [4].

4. A third possible quantification, very similar to the second, is the rental rate in the tenancy agreement that Mr Hampton and Ms Lumsden were offered prior to the period of alleged trespass, but which they did not accept.  That rate was $303.33 per month.  The total rent over the period would be approximately $2,900.

5. Mr Hampton and Ms Lumsden submitted that if any mesne profits were to be awarded against them then it should be $2,531.  The counterclaimants submitted that the amount should be $66,235.71.  If it had been necessary to determine this amount the correct award would have been approximately $2,900 ($303.33 per month).

The decisions in Ministry of Defence v AshmanMinistry of Defence v Thompson and

1. There are two authorities in England concerning a similar fact scenario to this case.  The plaintiff relied upon those cases.  They are Ministry of Defence v Ashman[265] and Ministry of Defence v Thompson.[266]  The cases involved relevantly identical circumstances.  They have not been considered in much detail in Australia although they have been mentioned in passing in the Full Court of this Court[267] and were described in passing by Santow JA in the New South Wales Court of Appeal as awards of damages on a 'quasi‑restitutionary basis'.[268]

   [265] Ministry of Defence v Ashman (1993) 25 HLR 513.

   [266] Ministry of Defence v Thompson (1993) 25 HLR 552.

   [267] Finesky Holdings Pty Ltd v Minister for Transport for Western Australia [2002] WASCA 206; (2002) 26 WAR 268, 382 ‑ 383 [58] ‑ [59] (Steytler J, Wallwork & Parker JJ agreeing).

   [268] Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353 [193].

2. Mr Ashman worked for the Ministry of Defence.  Mr and Mrs Ashman were tenants in Ministry of Defence housing at a subsidised rate of £95 per month.  A condition subsequent in the lease led to the termination of their lease when Mr Ashman moved out of the accommodation.  Mrs Ashman remained in the accommodation and the Ministry of Defence obtained a possession order against her and she vacated the premises.  An award of mesne profits was subsequently made against Mrs Ashman, relating back to the date from when Mrs Ashman was required to have vacated the premises.  The majority of the Court of Appeal held that the rate at which mesne profits should be awarded was not the £472 monthly market rate for the lease of the property.  Instead, it was the local authority concessionary rent that Mrs Ashman would have had to pay to lease a house elsewhere.  In the minority, Lloyd LJ considered that the award of mesne profits should have been confined to the loss to the Ministry of Defence.  That loss was the subsidised rate at which the premises would have been leased, approximately £95 per month.

3. In the majority, Hoffmann LJ explained the basis for this award.  His Lordship said that it was 'time to call a spade a spade' and that mesne profits should be understood as a claim for restitution.[269]  In assessing the measure of restitution, Hoffmann LJ suggested that Mrs Ashman should be able to 'subjectively devalue' the benefit according to its particular value to her.  This approach was subsequently applied by Hoffmann LJ, in the leading judgment in Ministry of Defence v Thompson[270] In that case the award was the amount of the concessionary Ministry of Defence rent payments only because there was no evidence at trial of the local authority rental rates that Mr and Mrs Thompson would have paid; the concessionary rent represented a minimum of what Mr and Mrs Thompson would have been willing to pay.

   [269] Ministry of Defence v Ashman (1993) 25 HLR 513, 519.

   [270] Ministry of Defence v Thompson (1993) 25 HLR 552.

4. The decisions in Ashman and Thompson are problematic.  There are two problems with them.  The first is that the use of the concept of subjectivity in the assessment of damages in Ashman is, at best, misleading.  Hoffmann LJ borrowed the concept from the late Professor Birks' use of that idea in the law of unjust enrichment.[271]  There are real difficulties with it in the context of unjust enrichment.[272]  But Birks' suggestion was confined to unjust enrichment.   Birks did not advocate the transplant of his idea from the law of unjust enrichment into the law of torts.

   [271] P Birks Introduction to the Law of Restitution (rev ed, 1989) 109 ‑ 114.

   [272] See A Lodder Enrichment in the Law of Unjust Enrichment and Restitution (2012) 152 ‑ 167.

5. The concept of 'subjective devaluation' is also plagued with semantic difficulty.  If 'subjective' means the personal beliefs of the defendant (the subject) then subjectivity should be irrelevant.  Like Mrs Ashman in Ashman, neither Mr Hampton nor Ms Lumsden gave any evidence of their personal views about the value of their accommodation.  If they had sought to give such evidence it would have been objectionable.

6. On the other hand, if 'subjective' means that damages should be assessed according to the value to a reasonable person in the position of the defendant then this begs the questions of which of the defendant's characteristics are relevant to the assessment of damages and how those characteristics should affect the award.

7. The second problem with the approach in Ashman is that both the majority and the minority assume that 'mesne profits' must be characterised in a binary manner.  As I have explained above at [271], mesne profits are simply an award of 'damages'.  Damages are a money award for wrongdoing; they are not tied to any particular measure.  As Serjeant Joseph Sayer wrote in the first sentence of what may have been the first English text on damages, 'damages are a pecuniary recompense for an injury'.[273]  The pecuniary award for violation of a defendant's rights might be in the form of compensatory damages, exemplary damages, nominal damages or restitutionary damages.

   [273] J Sayer The Law of Damages (1760).

8. Consistently with this approach, even in England where the law on this topic has been described as an 'unholy mess',[274] Ashman has been sidelined as only an alternative measure of damages.  Speaking of mesne profits in the leading judgment in the Court of Appeal in Shi v Jiangsu Native Produce Import and Export Corp,[275] Dyson LJ (as his Lordship was then) described an election by the claimant between a restitutionary award and a loss‑based award.

The different characterisations of mesne profits

[274] N McBride and R Bagshaw Tort Law (4th ed, 2012) 816.

[275] Shi v Jiangsu Native Produce Import and Export Corp [2009] EWCA Civ 1582 [20] ‑ [23].

1. The award of mesne profits has often been an award of compensation focussed upon the position of the plaintiff.  The common focus upon the plaintiff in an award of mesne profits is most apparent from the standard pleading of mesne profits.  That standard pleading included the losses incurred by the plaintiff in recovering occupation.  As Dixon, Williams, Fullagar and Kitto JJ explained in Anderson v Bowles,[276] in an action to recover mesne profits the plaintiff can 'include in the damages the costs, charges and expenses which are incurred in recovering possession'.

   [276] Anderson v Bowles [1951] HCA 61; (1951) 84 CLR 310, 322.

2. The compensatory approach to mesne profits is also illustrated by the allowance for deductions from an award of mesne profits to reflect expenses which the plaintiff would have incurred if the plaintiff had been in occupation.

3. In Doe v Hare,[277] an award of mesne profits for trespass was made against the defendant.  The jury, following the direction of Lord Lyndhurst, then Chief Baron, had allowed a deduction from the award of a ground rent payment made by the defendant during the period the defendant was in occupation.  The plaintiff appealed and submitted that the deduction should not have been allowed.  Baron Bayley, in the leading judgment, said that the defendant 'only paid what the plaintiff must have paid; and if so, the plaintiff is not hurt'.[278]  The decision was approved in Barber v Brown,[279] where the court explained that if, after ejectment, the defendants had been sued for mesne profits then an award would be reduced by the amount of any rates and taxes which had been paid by the defendant.

   [277] Doe v Hare (1833) 2 Cr & M 145; 149 ER 709. See also Peruvian Guano Co v Dreyfus Brothers & Co [1892] AC 166, 174 ‑ 177 (Lord MacNaghten).

   [278] Doe v Hare (1833) 2 C & M 145, 146; 149 ER 709, 709.

   [279] Barber v Brown (1856) 1 CB (NS) 120, 150; 140 ER 50, 64 (Creswell J).

1. On the other hand, the approach taken in mesne profits cases sometimes also involved a focus upon the benefit to the defendant.  For instance, in Doe v Hare,[280] Baron Bayley also asked the question, echoed in many other cases, 'what was the value of the occupation of the premises to [the defendant]?'  Some modern Australian cases, like the modern English ones, have also followed this restitutionary characterisation of mesne profits as damages which are concerned with the 'value of the property to the trespasser'.[281]

   [280] Doe v Hare (1833) 2 C & M 145, 146; 149 ER 709, 709.

   [281] Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432, 439 ‑ 441 (Cohen J) cited with approval by Giles JA in Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [198]; Lollis v Loulatzis [2007] VSC 547 [219], [229] (Kaye J leaving this possibility open).

2. These two lines of authority are not in conflict.  They are simply alternative measures of damages.  One focuses upon compensation to the plaintiff.  The other focuses upon the value of the benefit received by the defendant.  As I explain below, the different reasoning of Allsop P and Giles JA in Bunnings Group Ltd v CHEP Australia Ltd[282] reflects the two approaches.

Assessment of mesne profits as compensatory damages

[282] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342.

1. In the counterclaimants' careful and elaborate submissions on quantification, many authorities concerning the assessment of user damages were discussed in 32 paragraphs of submissions.  Most of those authorities make the point that an assessment of damages for the use of a plaintiff's land or chattel is not concerned with 'specific loss'[283] but is instead an objective assessment of the value of the use.  Allsop P has explained that 'if a property right has been invaded by wrongful user, the law should and does provide a remedy for the wrong, compensatory in character in the broad sense, focusing on the interference with the right in question'.[284]  Professor Stevens has coined the label 'substitutive damages' to describe the award of damages which he characterises in very similar terms.[285]

   [283] The Mediana [1900] AC 113, 117 (Lord Halsbury LC).

   [284] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [177].

   [285] R Stevens Torts and Rights (2007) 67 ‑ 68.

2. Lord Halsbury LC famously explained a century ago, in a point reiterated in many Australian cases,[286] that if a person takes a chair out of my room and keeps it for twelve months, my damages are not diminished if he or she can show that I would not have used the chair.[287]  In other words, the measure of use value is not limited to whatever financial losses are subsequently suffered by a plaintiff.  As a measure of compensation, the use value award focusses upon the immediate, objective loss of value to a reasonable person in the plaintiff's position.  And, as I have explained, a plaintiff can also recover further, subsequent losses such as the costs of ejectment.

   [286] Waters v Maynard (1924) 24 SR (NSW) 618, 621 (Campbell J); Bilambil‑Terranora Pty Ltd v Tweed Shire Council [1980] 1 NSWLR 465, 477 (Reynolds JA); Westwood v Cordwell [1983] 1 Qd R 276, 278 (McPherson J); Lahoud v Lahoud [2009] NSWSC 623 [188] (Ward J).

   [287] The Mediana [1900] AC 113, 117.

3. Finn J has explained that although Lord Halsbury LC's principle is clearly part of Australian law, there remains uncertainty about the method of calculation of rental value.[288]  Methods of calculation include costs of maintenance and depreciation and interest on capital value.  And it is often emphasised that the market rate is only the 'usual' or 'general' rate; it will not always be the reasonable rental rate in a claim for mesne profits.[289]  There may not even be a market rate.

   [288] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) FCR 1 [1572].

   [289] Inverugie Investments Ltd v Hackett [1995] 1 WLR 713, 717 (Lord Lloyd); Swordheath Properties Ltd v Tabet [1979] 1 WLR 285, 288 (Megaw LJ); Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432, 439 (Cohen J); Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [198] (Giles JA).

4. It may be that these different methods of calculation are just different techniques for answering either of two questions.  When the claim for user damages is for compensation then the central question is the price which would be demanded by a reasonable person in the plaintiff's position.  When the damages are sought on a restitutionary basis the question is upon the price which would be paid by a reasonable person in the defendant's position.  In this case the counterclaimants put their claims in the alternative.

5. The recent decision of the New South Wales Court of Appeal in Bunnings Group Ltd v CHEP Australia Ltd[290] illustrates each approach neatly.

   [290] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342.

6. In Bunnings, CHEP claimed damages from Bunnings for conversion of wooden pallets owned by CHEP.  Bunnings used some of the pallets for holding stock or stacking goods ready for exchange.  The pallets formed part of a pool which was used in Bunnings' business operations.

7. The Court of Appeal held that substantial damages were payable.  Allsop P (Macfarlan JA agreeing) took a compensatory approach and emphasised that the damages were based upon the use by the wrongdoer (Bunnings).[291] His Honour considered many of the cases on user damages, including those on mesne profits,[292] and focussed upon the 'interference with the right in question',[293] which required consideration of matters peculiar to CHEP, including that the pallets were 'profit earning chattels' for CHEP.[294]

   [291] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [177], [179], [180] ‑ [181].

   [292] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [178].

   [293] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [177].

   [294] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [169], [172].

8. In discussing the measure of recovery, Allsop P held that any orders about conversion prior to 8 August 2006 should apply the standard or market rate.[295]  However, the market or standard rate was not appropriate for the period of conversion from 8 August 2006.  During that period, the damages were assessed at the 'Wesfarmers' rate' which was 40% of the standard hire rate.  The Wesfarmers' rate was chosen because the conversion occurred in the context of a failure by Bunnings to accept an offer for hire based on the Wesfarmers' rate:[296]

   [T]he very act of conversion or detinue was failing to accept the offer effectively based on the Wesfarmers' rate. This is the appropriate rate from 8 August 2006 for the quantity of pallets withheld and used by Bunnings. To give a higher rate after 8 August 2006 would be to risk over‑compensation of the kind in Butler where to give damages by reference to the [market] value of the eggs sold by the grower would have given the [plaintiff] a sum greater than it would have received had the [defendant] complied with the law, breach of which law amounted to acts of conversion.

   [295] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [186].

   [296] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [185].

9. The reference to Butler is to the decision of the High Court of Australia in Butler v Egg and Egg Pulp Marketing Board.[297]  In that case, the appellants were producers of eggs.  Victorian legislation vested the ownership of the eggs in the respondent Marketing Board.  The appellants were required to deliver the eggs to the respondent which would sell the eggs at rates well below market value.  Part of the price would then be paid to the appellants.  The appellant did not deliver the eggs to the defendant but, instead, committed the tort of conversion by selling the eggs.  The eggs were sold at market rates.

   [297] Butler v Egg and Egg Pulp Marketing Board [1966] HCA 38; (1966) 114 CLR 185.

10. The question with which the High Court of Australia was concerned was whether the capital value of the converted eggs should be assessed at market rate.  The appellants pointed out that the capital value of converted goods is usually assessed at market value which was £4,000.  Similarly, market value is the usual measure for user damages for trespass or conversion.

11. The High Court rejected the argument that the damages for conversion should be measured by the market value of the eggs.  The High Court awarded damages of only £1,100.  This was the difference between the lower price for which the respondent would have sold the eggs and the amount which it would have had to pay to the appellants.  Taylor and Owen JJ held:[298]

    [T]he statement which appears so often in the books that the general rule is that the plaintiff in an action of conversion is entitled to recover the full value of the goods converted … should not be allowed to obscure the broad principle that damages are awarded by way of compensation.

    [298] Butler v Egg and Egg Pulp Marketing Board [1966] HCA 38; (1966) 114 CLR 185, 191, see also (192) (Menzies J). See also Chinery v Viall (1860) 5 H & N 288, 294; 157 ER 1192, 1195 (Bramwell B): 'it is not an absolute rule that the value of the goods is to be taken as the measure of damage'.

12. The same result reached by Allsop P in Bunnings should apply in this case.  Even if (which I do not accept) Mr Hampton and Ms Lumsden had committed the tort of trespass by remaining in the Property, then that tort would not have been committed if  they had accepted the terms of the lease offered by the counterclaimants.  Just as Allsop P considered that the lower Wesfarmers rate was the measure of damages for conversion where that had been offered to Bunnings, so too would the lower rental rate offered by the counterclaimants to Mr Hampton and Ms Lumsden have been the appropriate measure if they had been trespassers.  That amount represents the immediate, objective detriment to a reasonable person in the counterclaimants' position.

13. The appropriate award would be $303.33 per month for the period of any trespass.

Assessment of mesne profits as restitutionary damages

1. In the alternative, the counterclaimants put their case for assessment of damages as a restitutionary measure.

2. Matched approaches apply to assessment of damages on a restitutionary basis as on a compensatory basis.  The restitutionary assessment is based upon an objective, immediate assessment of the value obtained by the defendant.  As I have explained above, it is irrelevant to compensation whether the plaintiff subsequently suffered any actual financial loss.  So too, it is irrelevant to an assessment on a restitutionary basis whether the defendant subsequently obtained any actual financial profit from the use of the goods or land.

3. It will not always be the case that damages assessed on a restitutionary basis will reach the same result as those assessed on a compensatory basis.  In The Mediana, for instance, when the defendant collided with, and damaged, the plaintiff's lightship Comet, although the plaintiff lost the use of Comet, a reasonable person in the position of the defendant obtained no benefit from the collision.  Again, to borrow an example described by Lord Nicholls as 'restitution for wrongdoing',[299] the value of the use of money which a reasonable defendant wrongfully obtains might be different from the value of the loss of the use of that money to a reasonable plaintiff.  Different people will be offered different interest rates.

   [299] Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; (2008) 1 AC 561, 605 ‑ 606 [116].

4. In other cases, the application of each approach can lead to the same result.[300]  In Bunnings, the restitutionary approach to assessment of damages was applied by Giles JA.  His Honour reached the same result as Allsop P and Macfarlan JA.[301]  Giles JA focussed upon the damages as representing 'the expense saved by Bunnings through having the use of the pallets without paying for their hire'.[302]  A reasonable person in the position of Bunnings would pay the lower Wesfarmers' rate which was offered for the use of the pallets which Bunnings obtained.

   [300] Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246.

   [301] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [193].

   [302] Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 [205] (original emphasis).

5. The same is true in this case.  If Mr Hampton and Ms Lumsden had committed the tort of trespass then the benefit they would reasonably have obtained must be measured by the terms of the lease they were offered by the defendants.  It would have been reasonable for a person in their position to accept the below-market rate offered in that lease.  The appropriate award would again have been $303.33 per month for the period of any trespass.

Conclusion

1. The conclusion is that both the claim and the counterclaim must be dismissed.  The effect of this conclusion is that the defendants have succeeded in establishing that Mr Hampton and Ms Lumsden are not able to call for transfer of the title to the house in which they and their family have lived while Mr Hampton worked for BHPBIO for nearly two decades.

2. On the one hand, the dismissal of Mr Hampton from his employment with BHPBIO was not unfair.  Fair Work Australia held that Mr Hampton committed a very serious safety breach that placed himself and others on the mine site at very real risk of injury or death.[303]  Fair Work Australia took into account the grave economic and personal consequences for Mr Hampton and his family of termination, including what Mr Hampton submitted would be 'the significant financial loss he will suffer through not being able to realize on the benefits that would have otherwise accrued to him through the Respondents homeownership scheme'.[304]

   [303] Hampton v BHP Billiton Pty Ltd [2011] FWA 3335 [129] (Commissioner Williams).

   [304] Hampton v BHP Billiton Pty Ltd [2011] FWA 3335 [133] (Commissioner Williams).

3. On the other hand, Mr Hampton's and Ms Lumsden's lives are in Newman.  Mr Hampton is a life member and volunteer for the Newman Speedway.  He volunteers at the local primary school.  He and Ms Lumsden have raised their three children at the Property; their son still lives in Newman and one of their daughters lives in Port Hedland.  Mr Hampton devoted 20 years of his life to BHPBIO in Newman.  He has a new job working up to 60 hours a week driving a truck in Newman.  Without rights in relation to the Property he cannot afford to rent in Newman and he will lose his new job and his long associations in Newman.

4. Outside the strict application of the law, it remains within the power of the defendants and BHPBIO to decide whether they will temper justice with mercy and abstain from insistence upon the benefit of ambiguous provisions of a 'contract of sale' against a person who gave them nearly two decades of his life.