Kavanagh v Tasmania

[2002] HCATrans 167

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Hobart  No H4 of 2000

B e t w e e n -

WILLIAM DUDLEY KAVANAGH

Applicant

and

THE STATE OF TASMANIA

Respondent

Application for leave to re-open

GAUDRON J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

FROM HOBART BY VIDEO LINK TO CANBERRA

ON FRIDAY, 3 MAY 2002, AT 11.49 AM

Copyright in the High Court of Australia

GAUDRON J:   Yes, Mr Kavanagh, you appear for yourself?

MR W.D. KAVANAGH appeared in person.

GAUDRON J:   Just one moment and we will see if you have an opponent in Hobart.  Is there anyone in Hobart in this matter?

MR T.J. ELLIS, SC:   Yes, your Honour, I appear for the respondent. (instructed by the Director of Public Prosecutions (Tasmania))

GAUDRON J:   Mr Kavanagh, before you commence, we note, of course, the grounds upon which you seek to reopen your special leave application.  As you will know, Justices Gummow and I were also at the dinner of which you complain, as was every other member of the Court, except Justice McHugh.  That notwithstanding, it is impossible to empanel a special leave Bench, at least one of the Justices of which was not also at that dinner.  We take the view, therefore, that as a matter of necessity this case must proceed before us.  We also take the view that we will hear the merits of your special leave application and then determine whether or not we should hear you further in relation to the ground to reopen.  Is that suitable?

MR KAVANAGH:   Yes, your Honour.

GAUDRON J:   Yes, thank you.  Do you have any difficulty with that, Mr Ellis?

MR ELLIS:   No, thank you, your Honour.

GAUDRON J:   Very well, Mr Kavanagh.

MR KAVANAGH:   Thank you, your Honour.  If it please the Court, my arguments have been set out in the opposite order to that which you have just mentioned in that apprehended bias is, in fact, the first ground, so if you could bear with me for one moment I will try to rearrange my arguments.

I accept that rules of necessity now apply to all hearings including this one, your Honour.  In my submission, the question arising as to whether or not grounds for an appeal, prima facia, have merit, therefore has added significance.  That there was a breach of the deeds established – that appears at page 57 of the application book, lines 22 to 26.

GAUDRON J:   Well, does it?

GUMMOW J:   Page 57?

MR KAVANAGH:   Of the application book.

GUMMOW J:   Yes, line ‑ ‑ ‑?

MR KAVANAGH:   Lines 22 to 26, your Honour.

GUMMOW J:   Lines 22 to 26.  Yes, but it is the last sentence in that paragraph that is your difficulty, is it not?

Although the learned trial judge fell into error ‑ ‑ ‑

MR KAVANAGH:   That is correct, your Honour.

GUMMOW J:   Yes.

MR KAVANAGH:   In the circumstances in which breach occurred that alone, in my submission, raises material questions ‑ ‑ ‑

GAUDRON J:   I wonder if that puts the matter correctly.  I wonder if the real issue is whether or not the deed of release precludes you recovering it in properly constituted proceedings.  I think that it the more correct way of stating that issue, is it not?

MR KAVANAGH:   Yes, your Honour.  On the basis of the findings of the Full Court, I would be precluded from recovering it under the deed.

GAUDRON J:   Why?

MR KAVANAGH:   Because the lower trial judge, in a finding which was followed by the Full Court, found that clause 2(e)(ii) was an exception to the release and only applied to “past salary instalments” subsequently shown “to be wrong”.  That is at page 42, lines 18 to 19.

GAUDRON J:   Yes.

MR KAVANAGH:   The Court of Appeal followed this interpretation.  That is at page 56 at lines 10 to 13.

GAUDRON J:   Well, did they?

MR KAVANAGH:   Yes, they did, your Honour.

GUMMOW J:   Page 56.

MR KAVANAGH:   Page 56.

GUMMOW J:   Whereabouts?  Which lines, Mr Kavanagh?

MR KAVANAGH:   Lines 10 to 13, your Honour.

GUMMOW J:   Yes.

GAUDRON J:   I think they take a different view of it from the primary judge.

MR KAVANAGH:   Your Honour, if I may, the Full Court said:

it is plain that this means no more than the scope of the release provided by clause 2(b) is cut down to exclude any entitlement that may be found in the future to arise in the circumstances prescribed by clause 2(e).

Found in the future.  In this particular situation, your Honour, the entitlements were already known.

If I could proceed on that point.  At my termination there were outstanding sums for accrued salary, leave and long service.  There is no provision in the deed for the payment of such outstanding amounts.  They were not included in the redundancy payment and by these findings that I have just referred to, they are excluded from the operation of subclause 2(e)(ii).  Whether that be correct or not, and that was a matter of some argument before the court, either way, in my submission, the only other provision open was for an implied condition in which the respondent promised performance by way of payment in full of outstanding entitlements.  Unless it can be found that I was ready to forego all of these outstanding entitlements, then necessarily it must be such a condition, and it must be a condition precedent, because accrued outstanding payments could not otherwise be recovered after the release became operative.

My execution of the deed and acceptance of the redundancy payment in full accord and satisfaction for clause 2(b) was, in my submission, necessarily subject to performance in full of that promise.  Unpaid leave was to the route of the accord itself, in this instance.  The respondent did not complete the promise in respect of outstanding leave – that is page 57, lines 22 to 26 again.  This issue falls, in my submission, within the ambit of Justice Dixon’s, as he then was, A Qualitative Dictum on the Subject of Accord and Satisfaction.  In my submission, in the context of accord and satisfaction, it is the fact of the breach which is relevant and neither is quantum nor scope, if not paid in full, as applies here, the promise is incomplete and executory.

In this case, all of the leave taken after the ‑ ‑ ‑

GAUDRON J:   Let us just go back a little bit.  You were paid the sum of money that was agreed under the deed of release.

MR KAVANAGH:   I was paid the redundancy figure, your Honour.

GAUDRON J:   Yes, and in return for that redundancy figure ‑ ‑ ‑

GUMMOW J:   That is the $55,000?

MR KAVANAGH:   Yes, your Honour.

GAUDRON J:    ‑ ‑ ‑you executed this release?  That is what it says, does
it not?

MR KAVANAGH:   Yes, it was actually the other way around, your Honour.  The deed was executed prior to the receipt of any sums.

GAUDRON J:   Very well, but the deed itself says that in return for the amount of money to be paid you accept:

in full accord and satisfaction of all suits, actions, causes of action . . . arising out of –

your –

employment and the termination of that employment.

And that is what your signed.

MR KAVANAGH:   Yes, your Honour.  That was subject to subclauses 1(b) and 2(e).

GAUDRON J:   Yes, 1(b).

GUMMOW J:   Clause 1(b) does not seem to be in point, does it not?

MR KAVANAGH:   It is, your Honour, in my submission, in terms of the interpretation, because one of the findings of the Full Court and also of the learned trial judge was that the “subject to” was not a condition antecedent.

GAUDRON J:   You did not release them from workers’ compensation or damages for personal injury and you do not release them to make good the underpayment of wages, salaries or other entitlements.  Now, you say you have other entitlements owing to you, do you?  You say you have accumulated annual leave?

MR KAVANAGH:   Yes, your Honour.  There was ‑ ‑ ‑

GAUDRON J:   And were there wages?

MR KAVANAGH:   At the date of the execution of the deed, your Honour, no payments had been received in respect to current salary, accrued leave, long service leave or, for that matter, the redundancy payment itself.  All of these payments were made after the deed had been ‑ ‑ ‑

GAUDRON J:   What do you say you have not been paid for?  Do you know how this $55,000 – was there some practice as to how the redundancy payments were calculated?

MR KAVANAGH:   Yes, your Honour.  They were calculated on the basis of years of service, two weeks leave per year up to a capped limit, and that is how that figure was arrived at.

GAUDRON J:   That is the usual way, is it?

MR KAVANAGH:   That was the usual way, your Honour.

GAUDRON J:   But you say you received no payment for accrued leave?

MR KAVANAGH:   No, your Honour.  The outstanding payments were incomplete.  There was an agreement which the Full Court and the learned trial judge found was not binding on the Crown but, as a consequence of this agreement, leave was taken on 16 October 1991.  It was backdated to facilitate that agreement.  It was raised as an issue after the respondent resiled from the arrangements made on 16 October.  It was raised as an issue at that point.  It had not been resolved prior to my termination, and when leave payments eventually came through, not only had all of the leave, which had been taken in the period following 16 October, been deducted but also two backdated days, which the Full Court and the learned trial judge also found, had been taken as part of that agreement.  They were also deducted even thought I had been at work on those two days.

GAUDRON J:   Yes.

GUMMOW J:   You want to show, do you not, that there has been a breach of 2(e)(ii) – on its proper construction there has been a breach of it and there is a repudiation and therefore the whole of the release falls.  That is what you are about, is it not?

MR KAVANAGH:   There are two ways of looking at it, your Honour.  If you accept the Full Court and the learned trial judge’s finding that clause 2(e)(ii) is simply an exception to the release ‑ ‑ ‑

GAUDRON J:   It is, in terms.  That is the problem, is it not?  Let us assume you could make good your claim, that you were entitled to that paid leave one way or the other, then you can sue for it.  That is what 2(e)(ii) says.  Let us assume they had failed to pay you ‑ ‑ ‑

MR KAVANAGH:   With respect, your Honour, that was not the finding of the Full Court.

GAUDRON J:   Well, I am not too sure about that.  It looks to me as though that is exactly what it says.

GUMMOW J:   It is at page 56, is it not?

GAUDRON J:   Page 57 as I read it.  Is that 56 or 57?

GUMMOW J:   Page 56, perhaps, line 10.

MR KAVANAGH:   On page 57, your Honour, lines 12 onwards:

Any claim for two days’ pay or pay in lieu of leave was expressly excluded from the operation of the release by the provisions of cl 2(e)(ii) and there was no evidence that the appellant intended to forego such a claim.

It then goes on to say that:

has never been pleaded as a breach of the term of the deed of release.

GAUDRON J:   The problem is, see the words, “may be found in the future to arise”.

MR KAVANAGH:   Yes, your Honour.

GAUDRON J:   It probably should be, “found in the future to have arisen”.

GUMMOW J:   Yes.

GAUDRON J:   It is the regrettable lack of attention to grammar, but I do not think ‑ ‑ ‑

MR KAVANAGH:   With respect, your Honour ‑ ‑ ‑

GAUDRON J:   I do not think it precludes you for suing for the money.  In any event you did not.  What you want to say is either that it was a fundamental term of the agreement that they pay you all other entitlements, and if they did not it was breached, or that there was an implied term that they would, and if it was not – when it too was fundamental.  You are trying to get out of an agreement ‑ not simply an agreement, I think a deed ‑ that you signed, that is the problem.  On the reading that the Full Court took and which I would take, although perhaps expressed slightly differently, what 2(e) does is allow you to sue for any entitlements to which you were not paid.

MR KAVANAGH:   I take your point, your Honour, but with respect if I may, the circumstances under which the deed was signed, the circumstances in which no moneys whatsoever had been paid, it was signed on the basis that all outstanding amounts would be paid.  In the matrix of the events of the time, that, in my submission, amounts to an essential term within the meaning of Associated Newspapers v Bancks.  When in the event these moneys were not paid in full, I believe that that condition had been breached.  In the matrix of the events of the time the amounts involved were significantly greater than the two days pay at this point.  The number of days involved is representative more of the difficulty of establishing a claim in respect of other leave which was taken as a consequence of the agreement of 16 October, and which had not been resolved at the time of my termination.  If one takes the Full Court’s decision literally, then I am precluded because all of this was known at the time of the execution of the deed.

GAUDRON J:   You do not worry about decisions so much as orders.  What the Full Court has held is that you are not entitled to damages for termination of employment, is that not right, in essence?  Not that you are not entitled to any moneys that were otherwise payable to you.

MR KAVANAGH:   Essentially what the Full Court held, your Honour, was that the deed stands.

GAUDRON J:   Yes.  But you were suing for damages for breach of contract of employment for a term, is that not right?

MR KAVANAGH:   That is correct, your Honour.

GAUDRON J:   And to make good your claim you had to say the deed did not stand.

MR KAVANAGH:   That is correct.

GAUDRON J:   And the court held that it did, but I do not know that it is held that you cannot recover moneys to which you were entitled, if you can prove that that was so.

MR KAVANAGH:   No, your Honour.  The essence of my case is that the conditions under which I executed the deed were not met and that these were conditions precedent.  As I said, whether one takes the view ‑ ‑ ‑

GAUDRON J:   What exactly do you say those conditions precedent were?  Because this does not exactly seem to be the case that you made below.

MR KAVANAGH:   At all times, your Honour, my position has been that when I executed the deed I did so on the basis that I was executing it subject to all outstanding moneys being paid, and that did not occur.

GAUDRON J:   That is in conflict with the terms of paragraph – well, it may or may not be in conflict, depending upon what you mean by being paid.  If you say that they had to be paid at the time of termination, it is in conflict with paragraph 2(e).

MR KAVANAGH:   As a normal question of employment, your Honour, when employment is terminated the outstanding moneys are paid.  That did not apply here.  They were paid in dribs and drabs subsequent to that, and when the question of the leave which, as I said, was an issue of some significance at the time, when that was paid, leave had been deducted which only had been taken in respect to an agreement from which the respondent resiled.  I accept that in terms of the binding nature of that agreement the courts both found that it was not binding on the respondent, but it did not alter the fact that it was acted upon and leave was taken, and some of that leave was backdated.  It was in that matrix that the deed was executed, and it was not until subsequent to termination and the deed that it became apparent that the respondent not only had not paid in respect of the leave which was taken post the agreement, but it also had not paid for the leave which had been backdated.  This is a finding of fact by both the learned trial judge and by the Full Court.  It was within that matrix that I executed the deed.  It was, however trivial it may seem at this point, an issue that went to the root of the accord.

GAUDRON J:   That is the question, is it not?  It does depend on what one makes of 2(e)(ii), does it not?

MR KAVANAGH:   Even if one accepts that 2(e)(ii) is simply an exception, the finding that it could only be recovered – and this was a finding by the learned trial judge ‑ ‑ ‑

GAUDRON J:   He was not followed on that issue.

MR KAVANAGH:   The Full Court refers to “in the future”, your Honour.

GAUDRON J:   Yes.

MR KAVANAGH:   And this was already known.

GAUDRON J:   There might be some ambiguity about it, but I would not have read it that way.

MR KAVANAGH:   With respect, your Honour, in the matrix of events at the time ‑ ‑ ‑

GAUDRON J:   In any event, all that was dismissed was your application for damages, not an application to be paid what you are entitled to.

MR KAVANAGH:   I am not quite sure I take that point, your Honour.

GAUDRON J:   Yes, very well.  We have interrupted you a little bit.  Is there anything else you wish to say?

MR KAVANAGH:   Other than the fact, your Honour, that I have come more fully equipped to deal with the grounds for this application rather than the merits of special leave, which I was not expecting.

GAUDRON J:   Yes.  We need not trouble you on that at this stage.  At this stage we are minded to take a short adjournment to see what course we will follow.

MR KAVANAGH:   Thank you, your Honour.

AT 12.13 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.20 PM:

GAUDRON J:   Yes.

MR KAVANAGH:   Your Honour, if I may, I have just noticed – as I said before the Court adjourned, I was not quite prepared for the special leave

argument.  I have just noticed on page 56 immediately following the finding by the Court it says:

That this is the proper construction of the deed is reinforced by the provisions of cl 2(e)(i) which provides for the payment of entitlements which may not arise until after the deed has been executed and the redundancy payment made, eg, future weekly payments in respect of incapacity –

and so forth, but in my view it reinforces the finding that the court excludes outstanding payments by referring to payments that may be found in the future to arise.

GAUDRON J:   Yes, thank you.  Mr Ellis, we need not trouble you at this stage.

The applicant seeks by motion filed 25 June 2001 two orders.  The first is the order of this Court made on 5 April 2001 refusing his application for special leave to appeal from a decision of the Full Court of the Supreme Court of Tasmania of 17 May 2000.  The second is dependent on the first and is an order granting that special leave.

We do not find it necessary to enter upon a consideration of the grounds advanced in support of the first order.  That is because we are of the view that the application for special leave must fail in any event.  To the extent that the decision of the Full Court turned upon attacks made upon findings of fact at trial, there are no prospects of success in establishing any error of principle by the Full Court in its treatment of those factual findings.

The decision of the Full Court also turned upon questions of construction of the deed of release of 11 November 1991, including in that expression the question whether there were implied terms or conditions obliging the respondent to pay all moneys and entitlements that were then owing to the applicant.  The Full Court held, in effect, that there were not because clause 2(e) of the deed preserved the applicant’s rights in that regard.

We would not express, and have not expressed, the effect of clause 2(e) in the precise manner adopted by the Full Court.  However, we are of the view that the Full Court was right to hold that there was nothing in clause 2(e) or otherwise in the deed which provided any basis for the applicant to treat the deed of release as not binding on him.  Now, the motion will thus be dismissed.

Mr Ellis, we are not minded to make an order for costs in this matter at this stage, unless you have something else to say on the issue.

MR ELLIS:   No thank you, your Honour.

GAUDRON J:   No, thank you.  The motion is dismissed.  The Court will now adjourn to reconstitute.

AT 12.24 PM THE MATTER WAS CONCLUDED