Haros v Linfox

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FEDERAL COURT OF AUSTRALIA

Haros v Linfox [2011] FCA 699

Citation: Haros v Linfox [2011] FCA 699
Parties: GEORGE GABRIEL HAROS v LINFOX AUSTRALIA PTY LTD (ACN 004 718 647) and TIMOTHY ANDERSON
File number: VID 868 of 2009
Judge: TRACEY J
Date of judgment: 22 June 2011
Catchwords: TRADE PRACTICES – representations alleged to be made during the course of negotiations between employer and prospective employee – explicitly and by omission - whether representations were misleading or deceptive or likely to mislead or deceive – representations not considered to be made – causes of action not made out
Legislation: Fair Trading Act 1999 (Vic) ss 9, 13
Trade Practices Act 1974 (Cth) ss 51A, 52, 53B
Cases cited: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 referred to
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 referred to
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 cited, applied
Fraser v NRMA Holdings Limited (1995) 55 FCR 452 cited
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216 referred to
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 referred to
Kimberley NZI Finance Limited v Torero Pty Ltd[1989] ATPR 46-054 cited, applied
McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230 cited
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 referred to
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 cited, applied
Dates of hearing: 10-14 May, 9-13 August, 16-17 August 2010 & 1 September 2010
Date of last submissions: 25 August 2010
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 107
Counsel for the Applicant: Mr S Wood & Mr J Snaden
Solicitor for the Applicant: Holding Redlich
Counsel for the Respondents: Mr J Bourke SC & Mr A Weinstock
Solicitor for the Respondents: Lander & Rogers

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 868 of 2009
BETWEEN:

GEORGE GABRIEL HAROS
Applicant
AND:

LINFOX AUSTRALIA PTY LTD (ACN 004 718 647)
First Respondent

TIMOTHY ANDERSON
Second Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

22 JUNE 2011

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1. The application be dismissed with costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 868 of 2009
BETWEEN:

GEORGE GABRIEL HAROS
Applicant
AND:

LINFOX AUSTRALIA PTY LTD (ACN 004 718 647)
First Respondent

TIMOTHY ANDERSON
Second Respondent

JUDGE:

TRACEY J

DATE:

22 JUNE 2011

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

  1. Towards the end of 2008 the Applicant, Mr George Haros was recruited by the First Respondent (“Linfox”) as business manager of Avalon Airport (“Avalon”).  He commenced employment in that role on 24 November 2008. 

  2. Mr Haros is a lawyer who has also…

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Details
Case
[2011] FCA 699
Decision Date

CaseChat Overview and Summary

Mr Haros initiated proceedings against Linfox, seeking damages for alleged misleading or deceptive conduct under the Trade Practices Act 1974 (Cth). The crux of his claim was that he resigned from his previous employer, Schiavello, in reliance on certain representations made by Linfox during the recruitment process. These representations purportedly led him to believe that he would be responsible for managing the commercial operations at Avalon Airport and would have the opportunity to progress into a more senior role. Linfox, on the other hand, argued that the representations were not misleading and that Mr Haros was terminated due to his conduct and not because the role he was hired for did not exist or was not as described.

The court was required to determine whether the representations made by Linfox to Mr Haros were misleading or deceptive under sections 52 and 53B of the Trade Practices Act. Specifically, the court had to assess whether Linfox had reasonable grounds for making the representations, particularly those concerning the nature and scope of the business manager’s position at Avalon Airport. Additionally, the court had to consider whether the alleged omissions by Linfox during the recruitment process amounted to misleading or deceptive conduct.

The court found that Linfox did not make the representations that Mr Haros claimed were misleading. Even if such representations had been made, they were not misleading or deceptive. The court further held that Linfox had reasonable grounds for making any representations concerning future matters, thus absolving them of liability under section 51A of the Trade Practices Act. Ultimately, the court found that Mr Haros' claims under sections 52 and 53B of the Trade Practices Act were not substantiated.

In light of these findings, the court dismissed Mr Haros' application with costs. The court concluded that there was no basis for the claims of misleading or deceptive conduct and that Linfox was not liable for the damages sought by Mr Haros.

Orders

Orders of the court

1. The application be dismissed with costs.

Note:

Background

Background to the litigation

Mr Haros claims damages under various heads. The most significant claim is for losses he sustained by resigning from Schiavello, a step he contends he would not have taken but for the representations allegedly made to him.BACKGROUND Following a period as as solicitor in a major law firm, where he practised employment law, Mr Haros commenced employment in July 2005 with Schiavello as general legal counsel. In 2007 he was offered and accepted employment as the general manager of Mobi Living Pty Ltd, one of the companies within the group. He held this position until he resigned to take up employment with Linfox.THE RECRUITMENT OF MR HAROS The alleged representations on which Mr Haros relies were said to have been made to him in the period between late June 2008 when he commenced discussions with an agency, engaged by Linfox to find a commercial manager for Avalon, and 29 September 2008 when, having agreed on contractual terms with Linfox, he tendered his resignation to Schiavello. During that period Mr Haros dealt with a number of agency personnel and senior managers at Linfox. Much of what passed between them appears from contemporaneous records such as advertisements, e-mail exchanges, contractual documents and press statements. There were differences in accounts of some of the verbal communications which Mr Haros had with those representing Linfox. These differences will be outlined in the following account of the process by which Mr Haros was recruited to Linfox. Ultimately, nothing turns on them. Towards the middle of 2008 Linfox determined that it required the services of a business manager at Avalon. It engaged a recruitment agency (Mahlab) to assist it to obtain a suitable person. On 19 June 2008 a press advertisement appeared for the position of business manager at Avalon. Mr Haros saw the advertisement and, shortly afterwards, contacted Mahlab and expressed interest in being considered for the position. On 30 June 2008 Mr Haros attended a meeting with an employee of Mahlab, Ms Vivienne Rekas. In the course of that meeting Ms Rekas explained the nature of Linfox’s business at Avalon Airport. She said that the business was in the process of expanding. She outlined the business structure under which three operational managers reported to Mr Anderson. The new business manager would start at the same level as the operational managers but, once he or she gained a greater understanding of the business, it was intended that he or she would move into a more senior management role. According to Mr Haros she also said that “Mr Anderson had been employed at Avalon for a considerable amount of time and [there would be] the opportunity for this role, the successful person in the business manager role, to one day possibly be a candidate for Mr Anderson’s current general manager role …” Either at the meeting on 30 June 2008 or shortly before it took place Ms Rekas gave Mr Haros a document which described the role of the business manager as follows: “The role involves working closely with the General Manager to manage and expand all aspects of Avalon Airport’s commercial interests. The role will form part of a team that is to take Avalon Airport into its next exciting growth phase and become recognised as one of Australia’s top ten airports”. The document also recorded that “[i]n the medium to long term, the successful candidate will have actively assisted the General Manager in managing Avalon airport, and have secured and implemented business opportunities for Avalon airport.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Section 51A of the TP Act affected both ss 52 and 53B. Relevantly, it provided that:“(1)For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or refusing to do, and act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (2)For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.(3)…”CONSIDERATIONThe competing cases The gist of Mr Haros’ case under s 52 of the TP Act was that his discussions with Messrs Anderson, Fox and Vary and the terms in which the position was advertised had led him to conclude that the Business Manager’s position was an attractive one for a number of reasons: Linfox conducted a high profile business; he would be responsible for managing its commercial operations at Avalon airport; and, in due course, he would assume a more senior role as ‘the future of the business.’ None of this was true: Mr Anderson was actively engaged in negotiating alternative employment and would not, as a result, be in a position to influence Mr Haros’ later promotion within the business; and Mr Haros was not to have control (subject to Mr Anderson’s supervision) of the commercial activities at Avalon airport because others (including Mr Giddings and Mr Grant) were already involved in such activities. Mr Haros’ case under s 53B of the TP Act was founded on the allegation that he had been misled as to the nature of the Business Manager’s position. By reason of the pleaded misrepresentations (including the omissions) the position which he took up in November 2008 was “profoundly different” from the position which had been described to him during the recruitment process. On one analysis, there was no position at all because the other employees of Linfox who were performing commercial work were doing the work which would otherwise have fallen to be performed by the business manager. The substance of Linfox’s case was that it did want a business manager to work at Avalon. The incumbent had to be flexible and prepared to perform a wide range of commercial work. There was plenty of such work available. Mr Haros’ services were terminated, not because Linfox did not want anyone to perform the role of business manager, but rather because he had fallen out with Mr Giddings as a result of his attempts to ingratiate himself with Mr Fox and to elevate his status within the organisation to a level equivalent to that accorded to Mr Giddings. Faced with a choice of retaining Mr Giddings or Mr Haros, it opted to terminate Mr Haros’ services. In doing so it assigned a false reason for the termination because redundancy was perceived as an easier option.The legislative requirements