FEDERAL COURT OF AUSTRALIA
Hockey v WIN Corporation Pty Ltd [2013] FCA 772
Citation: Hockey v WIN Corporation Pty Ltd [2013] FCA 772 Parties: RODNEY HOCKEY v WIN CORPORATION PTY LTD ACN 000 737 404 File number: NSD 994 of 2012 Judge: ROBERTSON J Date of judgment: 8 August 2013 Catchwords: CONTRACTS – construction of contract of employment – whether term of contract contrary to provisions of Taxation Administration Act 1953 (Cth) requiring withholding of amount from employment termination payment – whether contract invalid or unenforceable – whether term severable
CONSUMER LAW – misleading and deceptive conduct – whether representations made as to performance of and lawfulness of contractual termsLegislation: Competition and Consumer Act 2010 (Cth) Sch 2 ss 4, 31, 236
Income Tax Assessment Act 1997 (Cth) ss 82–130, 82‑135(e), 83-175
Judiciary Act 1903 (Cth) s 39B(1A)(c)Taxation Administration Act 1953 (Cth) Sch 1 ss 12-85, 15-10, 15-25, 16-5, 16-20, 16-25, 16-30, 16-70, 250-10, 298-10, 298-15, 298-20, 298-25, 298-30
Cases cited: Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1
Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212
Carney v Herbert [1985] 1 AC 301
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337Concrete Constructions Group v Litevale Pty Ltd (2002) 170 FLR 290
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498
Felton v Mulligan (1971) 124 CLR 367
McFarlane v Daniell (1938) 38 SR (NSW) 337
McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230
Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101Miller v Miller (2011) 242 CLR 446
Nelson v Nelson (1995) 184 CLR 538Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516
Thomas Brown and Sons Ltd v Fazal Deen (1962) 108 CLR 391
Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410Dates of hearing: 25, 26, 27 March 2013 Date of last submissions: 23 April 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 135 Counsel for the Applicant: Mr AR Moses SC with Mr Y Shariff Solicitor for the Applicant: Laxon Lex Counsel for the Respondent: Mr NC Hutley SC with Mr R Scruby Solicitor for the Respondent: Atanaskovic Hartnell
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 994 of 2012
BETWEEN: RODNEY HOCKEY
ApplicantAND: WIN CORPORATION PTY LTD ACN 000 737 404
Respondent
JUDGE:
ROBERTSON J
DATE OF ORDER:
8 AUGUST 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The parties confer as to the quantum of damages to which the applicant is entitled, including what should be netted off and interest. Failing agreement, the applicant is to notify my associate by 15 August 2013 so that the matter may be relisted for up to half a day on a date not before 19 August 2013.
2.As…
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Details
- Case
- [2013] FCA 772
- Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, the case of Hockey v WIN Corporation Pty Ltd involved a dispute between Mr Hockey and WIN Corporation over the terms of Mr Hockey’s employment contract. The primary issue was the interpretation of clause (a)(ii) in the addendum to the employment contract dated 29 March 2011. The court was tasked with determining whether this clause meant that Mr Hockey would be paid the balance of his employment term until 3 September 2013. Additionally, the court examined whether any part of the contract was contrary to the Taxation Administration Act 1953 (Cth), and if so, what the consequences of such illegality would be. The court also considered if the allegedly illegal provision was severable from the rest of the contract. Finally, the court assessed whether WIN engaged in conduct that misled Mr Hockey regarding his employment.
The court concluded that clause (a)(ii) unambiguously indicated that Mr Hockey would be paid for the balance of his term until 3 September 2013. The court found it unnecessary to address the illegality and severability issues due to its interpretation of the clause. However, it indicated that if the clause was indeed contrary to the Taxation Administration Act, the contract would not be rendered invalid or unenforceable. The court also noted that if the contract was deemed invalid or unenforceable, the words “as a redundancy” would not be severable. Importantly, the court found that WIN did not engage in any misleading conduct towards Mr Hockey.
The court ordered that the parties should confer to determine the quantum of damages to which Mr Hockey was entitled, including any netting-off and interest. If they could not agree, the matter would be relisted for a hearing. The court provisionally indicated that costs should follow the event, meaning that WIN would pay Mr Hockey’s costs unless otherwise argued.
The court concluded that clause (a)(ii) unambiguously indicated that Mr Hockey would be paid for the balance of his term until 3 September 2013. The court found it unnecessary to address the illegality and severability issues due to its interpretation of the clause. However, it indicated that if the clause was indeed contrary to the Taxation Administration Act, the contract would not be rendered invalid or unenforceable. The court also noted that if the contract was deemed invalid or unenforceable, the words “as a redundancy” would not be severable. Importantly, the court found that WIN did not engage in any misleading conduct towards Mr Hockey.
The court ordered that the parties should confer to determine the quantum of damages to which Mr Hockey was entitled, including any netting-off and interest. If they could not agree, the matter would be relisted for a hearing. The court provisionally indicated that costs should follow the event, meaning that WIN would pay Mr Hockey’s costs unless otherwise argued.
Orders
Orders of the court
1. The parties confer as to the quantum of damages to which the applicant is entitled, including what should be netted off and interest. Failing agreement, the applicant is to notify my associate by 15 August 2013 so that the matter may be relisted for up to half a day on a date not before 19 August 2013.
2. As to costs, I indicate provisionally that costs should follow the event such that the respondent should pay the applicant’s costs. If it is necessary to argue that question it may also be relisted to be heard on the same half day as the quantum of damages.
Note: Entry of orders is dealt with in Order 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
The main issues and my conclusions in relation to those issues are as follows:(i)What is the correct construction of cl (a)(ii) of the addendum letter dated 29 March 2011? The language was not ambiguous and meant that Mr Hockey would be paid the balance of the term to 3 September 2013.(ii)Was the contract of employment or any part of it contrary to the provisions of the Taxation Administration Act 1953 (Cth) and, if so, what was the consequence of that illegality?In light of my conclusion on issue (i), it is unnecessary to answer this question. I nevertheless indicate my conclusion that if cl (a)(ii) of the contract was contrary to the provisions of the Taxation Administration Act 1953 (Cth) the contract was not invalid or unenforceable. (iii) Assuming illegality, was the relevant provision of the contract severable?In light of my conclusions on issues (i) and (ii), it is unnecessary to answer this question. I nevertheless indicate my conclusion that if the contract was invalid or unenforceable the words “as a redundancy” were not severable.(iv)Did WIN engage in conduct that was liable to mislead Mr Hockey as to any matter relating to his employment? WIN did not engage in such conduct.The facts On about 18 May 2010, Mr Hockey and WIN entered into a written contract of employment. The employment contract was contained in a letter of offer dated 10 May 2010, executed on 18 May 2010 by Mr Hockey and by Mr Andrew Gordon and Mr John Hatcher on behalf of WIN. The position was described as “General Manager NSW/QLD, Station Manager Wollongong WIN Television NSW”. The employment contract stated that it would commence on 3 September 2010. In its original form the employment contract stated that it would expire on 3 September 2012. In about March 2011 an amendment was made to the employment contract which changed the original expiry date to 3 September 2013. The relevant terms of the employment contract were as follows:19. Termination:You may provide notice of termination of employment through the provision of four (4) weeks’ noticeHowever, the Company may terminate your employment, (apart from circumstances allowing the Company to summarily terminate your employment):(a) on such terms as may be mutually agreed between the parties;(b)by the Company, at its absolute discretion, giving you twelve (12) weeks' notice in writing (or a payment in lieu of notice) or by giving you notice for the balance of the Term, whichever is the lesser if:(i) in the reasonable opinion of the Chief Executive Officer, of the Company, you do not carry out the duties and responsibilities of the Position, in a satisfactory manner, and you fail to remedy the deficiencies after notice has been given of those deficiencies and a reasonable period (not less than 14 days) has been provided for you to remedy them; or(c) by the Company, at its absolute discretion, giving you four (4) weeks' notice in writing (or a payment in lieu of notice) or by giving you notice for the balance of the Term, whichever is the lesser if: (i)in the Company's opinion you become mentally or physically unfit or unable to perform your duties, or(ii)without the consent of the Chief Executive Officer, or other appropriate executive officer of the Company, you absent yourself or fail to perform your duties for an aggregate period of sixty (60) days in any consecutive fifty-two (52) week period, in circumstances which do not constitute a temporary absence because of illness or injury as defined in the Fair Work Act 2009 (Cth); or(iii)if you receive, accept or solicit substantial gift or reward for the performance of your duties, without the consent of the Company.In the event of termination of your employment or resignation prior to the Expiry Date, the Company may elect to make a payment to you in lieu of part or all of your notice period. Alternatively, the Company may require you not to report for work, or provide you with altered duties (which you agree to fulfil), during part or all of your notice period.Any payments made to you in respect of your notice period or other statutory entitlements will be calculated on your gross annual Base Salary.Where you provide the Company with less than the required period of notice of your resignation, you agree that the Company may withhold from your final payment (including, but not limited to, any payment in lieu of accrued and unpaid annual leave) an amount equal to the shortfall in the notice period.…24. General:…Each provision of this contract is separable from the others and the severance of a provision does not affect the remainder of the contract
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
The case turned on the meaning of cl (a)(ii) of the addendum letter of 29 March 2011 and its effect on the contract.Summary of Issues and Conclusions The main issues and my conclusions in relation to those issues are as follows:(i)What is the correct construction of cl (a)(ii) of the addendum letter dated 29 March 2011? The language was not ambiguous and meant that Mr Hockey would be paid the balance of the term to 3 September 2013.(ii)Was the contract of employment or any part of it contrary to the provisions of the Taxation Administration Act 1953 (Cth) and, if so, what was the consequence of that illegality?In light of my conclusion on issue (i), it is unnecessary to answer this question. I nevertheless indicate my conclusion that if cl (a)(ii) of the contract was contrary to the provisions of the Taxation Administration Act 1953 (Cth) the contract was not invalid or unenforceable. (iii) Assuming illegality, was the relevant provision of the contract severable?In light of my conclusions on issues (i) and (ii), it is unnecessary to answer this question. I nevertheless indicate my conclusion that if the contract was invalid or unenforceable the words “as a redundancy” were not severable.(iv)Did WIN engage in conduct that was liable to mislead Mr Hockey as to any matter relating to his employment? WIN did not engage in such conduct.The facts On about 18 May 2010, Mr Hockey and WIN entered into a written contract of employment. The employment contract was contained in a letter of offer dated 10 May 2010, executed on 18 May 2010 by Mr Hockey and by Mr Andrew Gordon and Mr John Hatcher on behalf of WIN. The position was described as “General Manager NSW/QLD, Station Manager Wollongong WIN Television NSW”. The employment contract stated that it would commence on 3 September 2010. In its original form the employment contract stated that it would expire on 3 September 2012. In about March 2011 an amendment was made to the employment contract which changed the original expiry date to 3 September 2013. The relevant terms of the employment contract were as follows:19. Termination:You may provide notice of termination of employment through the provision of four (4) weeks’ noticeHowever, the Company may terminate your employment, (apart from circumstances allowing the Company to summarily terminate your employment):(a) on such terms as may be mutually agreed between the parties;(b)by the Company, at its absolute discretion, giving you twelve (12) weeks' notice in writing (or a payment in lieu of notice) or by giving you notice for the balance of the Term, whichever is the lesser if:(i) in the reasonable opinion of the Chief Executive Officer, of the Company, you do not carry out the duties and responsibilities of the Position, in a satisfactory manner, and you fail to remedy the deficiencies after notice has been given of those deficiencies and a reasonable period (not less than 14 days) has been provided for you to remedy them; or(c) by the Company, at its absolute discretion, giving you four (4) weeks' notice in writing (or a payment in lieu of notice) or by giving you notice for the balance of the Term, whichever is the lesser if: (i)in the Company's opinion you become mentally or physically unfit or unable to perform your duties, or(ii)without the consent of the Chief Executive Officer, or other appropriate executive officer of the Company, you absent yourself or fail to perform your duties for an aggregate period of sixty (60) days in any consecutive fifty-two (52) week period, in circumstances which do not constitute a temporary absence because of illness or injury as defined in the Fair Work Act 2009 (Cth); or(iii)if you receive, accept or solicit substantial gift or reward for the performance of your duties, without the consent of the Company.In the event of termination of your employment or resignation prior to the Expiry Date, the Company may elect to make a payment to you in lieu of part or all of your notice period. Alternatively, the Company may require you not to report for work, or provide you with altered duties (which you agree to fulfil), during part or all of your notice period.Any payments made to you in respect of your notice period or other statutory entitlements will be calculated on your gross annual Base Salary.Where you provide the Company with less than the required period of notice of your resignation, you agree that the Company may withhold from your final payment (including, but not limited to, any payment in lieu of accrued and unpaid annual leave) an amount equal to the shortfall in the notice period.…24. General:…Each provision of this contract is separable from the others and the severance of a provision does not affect the remainder of the contract
Ratio Decidendi
Legal Principle Established
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