KORTEN v Chubb Security Australia Ltd
[2008] WASC 285
•8 DECEMBER 2008
KORTEN -v- CHUBB SECURITY AUSTRALIA LTD [2008] WASC 285
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 285 | |
| Case No: | CIV:2322/2004 | 17 - 21 DECEMBER 2007, 13 - 15 FEBRUARY 2008 | |
| Coram: | JENKINS J | 7/12/08 | |
| 55 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff's action is dismissed Provisional assessment of damages in the sum of $363 551 | ||
| B | |||
| PDF Version |
| Parties: | JAMES EDWARD KORTEN CHUBB SECURITY AUSTRALIA LTD (ACN 003 605 098) |
Catchwords: | Contracts Construction and interpretation Valid termination of contract |
Legislation: | Nil |
Case References: | Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Baltic Shipping Company v Dillon (1993) 176 CLR 344 Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187 Carr v JA Berryman Pty Ltd (1953) 89 CLR 327 Electronic Industries Ltd v David Jones Ltd (1954) 91 CLR 288 Jones v Dunkel (1959) 101 CLR 298 Olympic Holdings Pty Ltd v Lochel [2004] WASC 61 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 Shevill v Builders Licensing Board (1982) 149 CLR 620 Thorpe v Lochel (2005) 31 WAR 500 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
CHUBB SECURITY AUSTRALIA LTD (ACN 003 605 098)
Defendant
Catchwords:
Contracts - Construction and interpretation - Valid termination of contract
Legislation:
Nil
Result:
Plaintiff's action is dismissed
Provisional assessment of damages in the sum of $363,551
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr M L Bennett
Defendant : Mr B D Luscombe
Solicitors:
Plaintiff : Lavan Legal
Defendant : Mallesons Stephen Jaques
Case(s) referred to in judgment(s):
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Baltic Shipping Company v Dillon (1993) 176 CLR 344
Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187
Carr v JA Berryman Pty Ltd (1953) 89 CLR 327
Electronic Industries Ltd v David Jones Ltd (1954) 91 CLR 288
Jones v Dunkel (1959) 101 CLR 298
Olympic Holdings Pty Ltd v Lochel [2004] WASC 61
Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234
Shevill v Builders Licensing Board (1982) 149 CLR 620
Thorpe v Lochel (2005) 31 WAR 500
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
(Page 3)
1 JENKINS J: The plaintiff's claim arises out of a contract between the parties by which the plaintiff agreed to provide, for reward, airline passenger screening services (screening services) at Newman and Paraburdoo Airports on terms and conditions, some of which are in dispute (the screening services contract).
2 The screening services contract related to the obligations which are now familiar to all air travellers whereby every passenger is required to walk through a metal detector and each piece of a passenger's hand luggage is passed through an x-ray machine, prior to the boarding of an aeroplane. Under the screening services contract, the screening services provided by the plaintiff were, essentially, the provision of personnel to operate and monitor the screening machines, to direct and assist passengers in the use of the machines and to create and maintain the 'sterile area' into which passengers passed after being screened.
3 On 12 June 2004, the defendant purported to terminate the screening services contract. The plaintiff claims that the defendant's purported termination of the contract was a breach of the contract. He claims damages for losses he alleges he suffered as a consequence.
4 The defendant denies that it breached the terms of the screening services contract and alleges that it was entitled to terminate the contract because the plaintiff was in breach of it. It alleges that it was permitted under the screening services contract to make a reasonable requirement of the plaintiff not to roster a named person to work at the Qantas Airways Limited (Qantas) screening point at Newman Airport, as it did in early June 2004. It says that in breach of that requirement the plaintiff rostered that person on duty. It says that pleaded breach entitled it to terminate the screening services contract, immediately on written notice. Other alleged breaches of the contract by the plaintiff are pleaded by the defendant but the defendant ran its case on the basis that those allegations provide particulars of why its direction to the plaintiff not to roster the named person was reasonable, rather than as allegations of breaches of contract which, considered singularly, permitted the defendant to terminate the screening services contract.
5 In his reply, the plaintiff denies the alleged breaches of the screening services contract but says that even if he did breach the contract, the defendant elected to affirm such breaches. He also pleads, in the alternative, that the defendant was not entitled to terminate for breach because it failed to give written notice of termination immediately upon
(Page 4)
- the happening of the alleged breaches of contract by him, as required by the screening services contract.
6 In its rejoinder, the defendant denies that it affirmed the defendant's breaches of the screening services contract. It further pleads that it was not required to given written notice of termination immediately on the plaintiff's breach and that it was entitled to terminate the contract at any time after the plaintiff breached it.
The Issues
7 Thus, the issues that arise for my determination can be summarised as follows:
1. Did the plaintiff breach the screening services contract, as alleged in the defence, by failing to comply with the defendant's reasonable requirement of the plaintiff not to roster a named person to work?
2. If the plaintiff did breach the contract as alleged, did that breach give the defendant a right to terminate the screening services contract?
If the answer to issues 1 or 2 is no, the plaintiff's claim succeeds and I should move to assess damages.
3. If the proven breach gave rise to a right to terminate the screening services contract in accordance with its terms, did the defendant affirm that breach so as to remove its right to terminate the contract?
If the defendant did affirm the breach in a manner which removed its right to terminate because of it, the plaintiff's claim succeeds and I should move to assess damages.
4. If the defendant did not affirm any proven breach, was the defendant required to give written notice of termination immediately upon the breach?
5. If yes, the final issue is whether the defendant failed to give written notice of termination immediately upon the breach and so failed to exercise its right to terminate the screening services contract for such breach?
8 If the answers to issues 4 and 5 are yes, the plaintiff's claim succeeds and I should move to assess damages. If the answer to issue 5 is no or if the answer to the issue 4 is no, the plaintiff has failed to prove his case and his claim ought to be dismissed.
(Page 5)
Witnesses
9 The plaintiff gave evidence and called the following witnesses:
1. Teresa Thatcher;
2. Jacqueline Margaret Caroline Bebensee; and
3. Keith Graeme Lingard (damages).
10 The following witnesses gave evidence for the defendant:
1. Russell James Colling;
2. Donald Raymond Cruse;
3. Niki Cullen;
4. Patrick Terry Normoyle;
5. Michael Paul Sears;
6. Neil Andrew Thoars;
7. Christine Patricia McIntyre;
8. Martin Paul Langridge (damages); and
9. Frank Leopold Gaston Hoffmann (damages).
11 The role of each witness is described later in these reasons. There are also some credibility issues which I comment on as I relate my findings of fact.
The facts
12 In order to determine the above issues it is necessary for me to set out the facts which have been admitted or have been found by me. Where a fact is in issue and it is important, I have set out the parties' competing versions of the relevant events and explain why I have found the facts as I have.
Background
13 In 2003 the plaintiff and Ms Theresa Thatcher were living together in a long term, de facto relationship in Newman, a town in the east Pilbara region of Western Australia. Newman was established to service the iron ore mines in the area. It is approximately 1,200 km north of Perth. The location of Paraburdoo is also relevant. It is also a mining town and is situated approximately 200 km east of Newman.
(Page 6)
14 The plaintiff, trading as Newman Electronics, conducted various commercial activities in and around Newman. Although Newman electronics is only a trading name, the witnesses often referred to it as if it was a corporation. For ease of expression I will sometimes do the same. However, when I do the reader should be aware that the legal persona is the plaintiff, trading as Newman Electronics. A part of the plaintiff's business was security work. He was a licensed security agent. He also repaired business machines and he regularly travelled to outlying mines and towns to service and repair them.
15 Ms Thatcher had a position, during school hours, as the school secretary at the local high school. She was also involved in running Newman Electronics and was a licensed security agent. In particular, Ms Thatcher performed administrative and bookkeeping tasks for the business. She did not receive regular remuneration for this work. I infer that she performed her role in the business out of love for the plaintiff and in return for the financial support which the business provided to them as a couple.
16 Prior to December 2003, there were no airline passenger screening services at Newman or Paraburdoo Airports. As a result of new Department of Transport and Regional Services' (DoTARS) rules, in May 2002, Qantas was required to undertake security screening of all passengers travelling on aircraft fitted to carry 40 or more passengers, including such aircraft servicing Newman and Paraburdoo.
17 In 2003 Newman Airport was owned by the Shire of Newman and the East Pilbara Shire Council and Paraburdoo Airport was owned by Pilbara Iron. Qantas had a contract with North West Travel Services Pty Ltd (North West) to provide ground handling services at Newman and Paraburdoo Airports. Mr Neil Thoars was North West's Operations Manager at Paraburdoo Airport and Mr Patrick Normoyle was North West's Operations Manager at Newman Airport. Thus, Mr Normoyle was the Qantas Ground Handling and Airport Manager in Newman and he had held that position since September 2001. Mr Thoars held the comparable position in Paraburdoo. Mr Thoars had extensive experience as an airline customer services officer. He had worked for North West in Paraburdoo since 1997. In early 2004 he purchased North West. Mr Normoyle reported to Mr Thoars. The staff of North West, including Mr Thoars and Mr Normoyle, was considered by the parties and Qantas to be Qantas staff.
(Page 7)
18 When DoTARS introduced the changes that required Qantas to undertake screening services at Newman and Paraburdoo Airports, Mr Russell Colling, Qantas' Security Manager for Regional Operations, liaised with North West and the owners of Newman and Paraburdoo Airports regarding the introduction of the screening services and the related infrastructure requirements. Both the Newman and Paraburdoo Airport terminals needed to be extended to make room for the screening equipment and for a sterile area at each airport.
19 Qantas aimed to commence screening services at both airports in October 2003. The commencement was delayed whilst the airport terminals were extended. On 21 November 2003 DoTARS, by a delegate, appointed Qantas to be the screening authority in respect to the sterile area at Newman Airport.
20 At that time Qantas had a written contract with the defendant pursuant to which the defendant provided screening services at a number of the larger Australian airports. The airports at Newman and Paraburdoo were added to the written contract well after the events the subject of this trial. However, before the events the subject of this trial, I accept that Qantas and the defendant entered into an oral agreement by which the defendant agreed to undertake security screening services on behalf of Qantas at Newman and Paraburdoo Airports.
21 In respect to the contract with the defendant, Mr Colling dealt with the defendant's personnel including Mrs Rachel Tutthill (nee Gethen), the defendant's National Aviation Manager, based in Sydney, and Mr Donald Cruse, who was based in Perth. In 2003 Mr Cruse, was an operations manager with Chubb Security Personnel (Western Australia), which was, apparently, owned by the defendant. He reported to the then general manager of Western Australia, who in turn reported to the managing director of the defendant in Sydney. Neither Mrs Tutthill nor these latter named persons gave evidence.
22 Mr Cruse was told that Qantas had asked the defendant to assist in setting up screening services in Newman and Paraburdoo. Mr Cruse's knowledge of the terms of the agreement between the defendant and Qantas came from communications he had with the defendant's national contract manager in Sydney. The manager telephoned Mr Cruse and asked him if he could visit Newman and Paraburdoo, amongst other places, with Mr Colling to look at establishing screening points in those airports.
(Page 8)
23 Mr Cruse made enquiries to ascertain who the defendant could, in turn, contract with in Newman and Paraburdoo. He learnt of the plaintiff as a licensed security agent in Newman. When Mr Cruse visited Newman in July 2003, he contacted Newman Electronics. He met with the plaintiff and Ms Thatcher. They discussed the proposal that the plaintiff would provide the screening services at the two airports. Later, they discussed more of the financial aspects of the proposal.
24 In October 2003, Mr Cruse sent the plaintiff a standard form contract which the defendant used for all its licensees and advised the plaintiff that he should seek his own legal advice in regard to it to make sure that it was 'a fit with their business'. He said to respond to him if there was an issue with any part of it.
25 The standard form contract was entitled 'Guards Licence Agreement' and by its name it can be inferred, quite rightly, that it was unsuitable to be used as a basis for a contract to provide screening services. It appears to have been drafted with a view to being used for the licensing of corporations to provide armed guards for premises and for movable property.
26 On or about 22 October 2003 the parties entered into the screening services contract using an amended standard form 'Guards Licensing Agreement'. Under the contract, the defendant licensed the plaintiff to provide Qantas screening services at Newman and Paraburdoo. I detail the provisions of the contract later in these reasons. Additionally, the parties agree that there were some oral conditions which were agreed to in a telephone discussion between the plaintiff and Mr Cruse, on behalf of the defendant. It was orally agreed that screening would commence at Paraburdoo in December 2003 and that the hourly rate for the provision of screening services at Paraburdoo would be the same as for Newman, namely $37.21 per hour. The screening services contract was for an initial term of 24 months.
27 Mr Cruse advised Mr Colling, who was based in Sydney, that the defendant had entered into an agreement with the plaintiff to provide screening services at Newman and Paraburdoo Airports on behalf of the defendant.
28 Screening services commenced at Newman Airport on 21 November 2003. At that time there were two flights a day in or out of Newman Airport, one in the morning and one in the afternoon every day from Monday through to Saturday and one flight on Sunday.
(Page 9)
29 The defendant required that each person who provided screening services under the screening services contract had to be trained as a screener. It appears that training expenses were met by the defendant. Some screeners, including the plaintiff and Ms Thatcher, did a certificate in security and first aid. In addition, basic training consisted of 40 hours work at Perth Airport, working alongside the defendant's screeners at that airport. The first supervisor of the Newman Airport screening point, Ms Domenica Calabro, was provided with extra training. The defendant also sent a person up to Newman to train and assist screeners from 19 - 21 November. In the early part of the screening services contract, as soon as a person finished their training they started work as a screener.
30 On 20 November 2003 an incident occurred at the screening point in Newman Airport when staff members, who it seems were skylarking, passed a screener and a North West employee through the hand luggage screening machine. Neither the plaintiff nor Ms Thatcher was involved in this incident. It was not until about 7 January 2004 that Mr Cruse found out about the incident from Mr Normoyle. The defendant complained to the plaintiff and he terminated the employment of Ms Calabro, who was involved in the incident.
31 On 9 December 2003 Mr Richard Keeling, the defendant's National Training and Compliance Manager, Transportation/Logistics, conducted the first audit of the Newman Airport screening point. He reported his findings to Mrs Tutthill. Mr Cruse received a copy of the audit report.
32 Relevantly, Mr Keeling recommended that Newman Airport be supplied with a complete set of current operational screening documentation and that an experienced regional supervisor be sent to Newman to provide operational support and to ensure that all supervisory roles were understood.
33 Mr Keeling was impressed with the professionalism and enthusiasm of the screeners at Newman Airport. He was concerned that a number of relevant operational documents were not available at the screening point for the screeners to refer to. Mr Keeling was under the impression that whilst all the relevant documents had been forwarded to the plaintiff, probably at different times, the plaintiff did not understand that all the documents had to be available at the screening point for screeners to refer to. His other concern was that whilst he had spent sometime with Ms Calabro, educating her about contractual and legislative requirements, he thought that a visit from an experienced regional airport supervisor would provide her with further guidance.
(Page 10)
34 On 22 December, as a result of Mr Keeling's report, Ms Niki Cullen, the defendant's Perth airport supervisor, visited Newman to check that the screening point was running smoothly and to check that the appropriate documentation was available. She found that it was not available. I find that Ms Cullen later bound all relevant documents and sent them to Newman Airport.
35 Whilst at Newman Airport, Ms Cullen spoke to Mr Normoyle who expressed 'certain concerns about Newman Electronics' to her. What he said to her is not in evidence. However, she says that she spoke to Ms Thatcher about these concerns and told her that the 'standard of behaviour at the screening point had to improve'. She also told her that staff should be ready to commence screening 90 minutes prior to aircraft departure and told her of ways to prepare the sterile area more quickly. Ms Thatcher told her that she could see no sense in opening the screening point that early because Qantas staff and passengers had not yet arrived.
36 On the other hand, Mrs Tutthill visited Newman on about 23 December and reported that she observed screeners to be 'performing duties at a high standard'.
37 The plaintiff and Ms Thatcher completed their training at Perth Airport. The plaintiff completed his training in early December. Ms Thatcher completed her training on 24 December 2003, after the school term had finished. She commenced work as a screener at Newman Airport on Christmas day. Both also commenced work as supervising screeners in Newman. Ms Thatcher worked more shifts than the plaintiff as she had greater flexibility due to school hours. The plaintiff was often working away from Newman.
38 Neither the plaintiff nor Ms Thatcher drew wages, although the time they worked was recorded in the same manner as the time of the plaintiff's employees. This record was used to charge the defendant for work done under the screening services contract.
39 On 7 January 2004 Mr Normoyle sent an email to Mr Cruse and the plaintiff complaining about the incident on 20 November 2003 when a member of his staff was passed through the screening machine by members of the plaintiff's staff. The email accused the plaintiff's staff of actions which were 'purely insidious, deceptive, potentially harmful and downright stupid not to mention possibly falling into the category of sexual harassment and a complete failure to maintain a duty of care'. Mr Normoyle made other accusations against the supervisor at the time
(Page 11)
- who, it appears, was Ms Calabro. Mr Normoyle said that he had 'other operational and procedural concerns that need to be addressed'. These were not identified in the email.
40 Mr Cruse contacted the plaintiff and Ms Thatcher and discussed the incident with them. The seriousness of it was emphasised to them. Early in the morning on 8 January 2004 Mr Cruse received an email from the plaintiff and Ms Thatcher attaching a letter of apology and a letter to Ms Calabro terminating her employment. On the same date Mr Cruse made a decision to visit Newman and sent the plaintiff an email advising him that during his visit he would like to meet the plaintiff, Ms Thatcher and as many of the screening staff as possible.
41 Mr Cruse then arranged for Mrs Jacqueline Bebensee, a director of Broadsword Security Pty Ltd, which provided screening services at Port Hedland and Karratha Airports, to meet him in Newman.
42 On the same date Mr Normoyle sent another email to the plaintiff and Mr Cruse, amongst others. It commenced with a reference to an apparent complaint from an electrician who had attended Newman Airport to fix an electrical problem and who had complained that the screening staff had been rude to him. Concerning the screeners, the email continued:
There seems to be a lack of essential knowledge gleaned from manuals and notices by the staff, they continually make procedural errors. Judgement also is a problem, there is a lot of um and err and I'm not sure, which is frustrating passengers. They should be very sure of what they are doing, especially what can and can not enter the sterile area and where there [sic] responsibilities lie, and not to exceed there [sic] mandate. I am getting several complaints each week regarding specialty keys. [T]he staff are of the belief these are tools and not simply keys, some say yes some say no and there is no port consistency.
My biggest complaints regarding the staff is there [sic] lack of professionalism at all times, even a goofball like me can maintain decorum, poise and professionalism as well as being efficient and courteous for at least 3 hours at a time, when ever they have their door up, they should be at work, in work mode and have only their minds in that arena, not laughing outlandishly, not arguing between themselves, passing insults across the room. This sort of behaviour is exhibited on almost all flights. There is also the issue of them being constantly late, sometimes only a couple of minutes but all to [sic] regularly we are talking 5 - 20 minutes late for the commencement of screening and sometimes as much as 38 minutes late. We have had a run of 8 flights in a row where they opened late. We are also have delayed flights due to excessive scrutiny / poor passenger handling and extensive delays at the screening
(Page 12)
- point, on days where the passenger count is as low 29 passengers getting on the plane there is no real excuse.
Issues regarding confidentiality and privacy have been raised of late with the inclusion of several complaints regarding the searching of passengers' bags and belongings without prior consent and even more concerning the touching of passengers in the process of a search without their verbal consent. Passengers travelling throughout the country expect consistent professional and courteous service at all airports and their associated security services, excessive and rude service is quickly noticed.
43 The following day Mr Normoyle sent another email to Mr Cruse and others at the defendant, stating that he had discussed with Ms Thatcher the issue of the plaintiff's screeners opening the screening point late. He said that her understanding was that staff had to arrive to commence work 90 minutes prior to the scheduled departure time of the Qantas flight and that they did not have to open the screening point until approximately 15 to 20 minutes had elapsed to enable them to set up, clean and test. Mr Normoyle wrote that his understanding was that the screening point was to be open for a full 90 minutes prior to the departure of a flight. Mr Normoyle requested clarification of the requirement. Mr Cruse responded to Mr Normoyle that Qantas had directed the defendant to commence screening shifts 90 minutes prior to aircraft departure. Notwithstanding the start time, Mr Cruse expressed the view that the set up, cleaning and testing should only take a 'couple of minutes to complete' and not 15 to 20 minutes. Mr Cruse sent a copy of the email chain to Newman Electronics.
44 On 12 January Mr Cruse flew to Newman. He met Mrs Bebensee and then met with the plaintiff and Ms Thatcher. Mr Cruse later met with the other screeners employed by the plaintiff. Mr Cruse spoke to them about a number of issues which by then had emerged, including the complaints which had been forwarded to him by Mr Normoyle. Ms Thatcher told Mr Cruse that she did not believe that Mr Normoyle had made a fair assessment of the screeners' abilities and of what they were doing at the screening point. Mr Cruse emphasised the importance of the plaintiff and his employees working as a team with Mr Normoyle, although the screening services were the plaintiff's responsibility and not Mr Normoyle's responsibility. On his return from Newman Mr Cruse reported his visit to Mrs Tutthill.
45 Mrs Bebensee, who was an experienced screener, had driven to Newman and she had arrived at the airport without announcing herself. She observed Ms Thatcher giving instructions in a 'strong manner'. In a
(Page 13)
- report to the defendant dated 9 December 2004, Mrs Bebensee said a number of critical things about Ms Thatcher. Her witness statement dated 19 September 2007 was much less critical. Mrs Bebensee explained the difference in evidence by saying that when she prepared her report dated 9 December 2004 she 'had [the defendant's] way of thinking'.
46 I formed the opinion that Mrs Bebensee's report was an honest and credible assessment at the time it was written of what she had observed at Newman Airport in January 2004. Her change of views some three years later does not negate the validity of her views in 2004. I am of the opinion that the views she expressed in 2004 were valid for someone assessing the screening services at Newman Airport and, in particular, the behaviour of Ms Thatcher from the defendant's perspective. I am also satisfied that her change in views did not undermine the accuracy of what she reported that she had observed, said and did whilst in Newman.
47 In her report dated 9 December 2004 Mrs Bebensee said that once she identified herself to Ms Thatcher, Ms Thatcher 'had the opinion that I was going to do as I was told'. She observed that as soon as the Qantas staff came through and opened the departure doors to the tarmac, Ms Thatcher 'ran over to the open door, half blocking the door and check (sic) every person as they left'. Mrs Bebensee said that she went over to Ms Thatcher and asked her to come away from the door. Ms Thatcher replied that she was 'stopping people from coming back in through the door and I'm staying here until the door is closed'. Mrs Bebensee explained to her that that was the job of the Qantas staff and that there were still people coming through the screening point. After screening had finished, Mrs Bebensee again explained to Ms Thatcher that it was Qantas' job to check boarding passes and to allow persons onto the tarmac and the plane. Mrs Bebensee wrote '[Ms Thatcher] didn't like being told this. [Ms Thatcher] didn't like being told anything'.
48 During her evidence, Mrs Bebensee denied that Ms Thatcher had been rude to people. She said that Ms Thatcher was blunt and abrupt. This is to be contrasted with her report of 9 December 2004 when she described Ms Thatcher's manner towards passengers as being 'rude and abrupt and there was never any please or thank you, sir or madam'. She also reported that she had observed Ms Thatcher to seem to be 'very unpleasant' towards the Qantas staff. Again she attempted to ameliorate this comment in her evidence by saying that Ms Thatcher had a loud voice and that she would sometimes yell across the airport to the Qantas staff in a blunt manner.
(Page 14)
49 In her evidence, Ms Thatcher denied being rude to passengers or to the plaintiff's and Qantas' staff.
50 I have had the opportunity to observe Ms Thatcher give her evidence as well as to consider the evidence regarding the events of 2003 and 2004 at Newman Airport. I have formed the view that Ms Thatcher is a dominant personality who likes things done her way and who is prone to see events from her perspective only. I have no doubt that Ms Thatcher was at times abrupt and blunt towards the plaintiff's staff, Qantas' staff and passengers. That appears to be her manner. It is a question of degree and judgment as to whether her manner and conduct amounted to rudeness. I do not have any doubt that, reasonably, a number of the people with whom Ms Thatcher dealt at Newman Airport considered her manner to be rude. In December 2004 Mrs Bebensee thought she was. In her evidence, Mrs Bebensee sought to justify Ms Thatcher's demeanour on the basis that she was a woman in business and that a certain degree of toughness was required. However, it is just as true that when Ms Thatcher was performing screening services at Newman Airport she was performing a customer relations role and she was expected, justifiably so, by the defendant and Qantas to be polite, to be pleasant and to display effective communication skills.
51 Mrs Bebensee also noted in her report of December 2004 that she had to speak to Ms Thatcher about providing routine paperwork to Perth Airport on time. Ms Thatcher told Mrs Bebensee that she would send it if she had time because she had other duties to attend to which were unrelated to the screening services contract with the defendant. She also said that she was going to change the format of the some of the Qantas and Chubb paperwork because she did not like its format. Mrs Bebensee told her that that could not be done and Mrs Bebensee's report indicated that Ms Thatcher was unhappy with that direction.
52 Mrs Bebensee also said that in her assessment Ms Thatcher was the only person that was permitted to make a decision at the screening point. She did not appear to trust the plaintiff's staff to perform their duties.
53 In respect to the keeping of operational documents available for the staff to see, Mrs Bebensee said that Ms Thatcher kept a lot of this information 'secret' from the airport screening staff. Mrs Bebensee said that she corrected Ms Thatcher on this issue and told her that the staff was permitted to read these documents. She said that Ms Thatcher said that the documents were for her eyes only and was 'most annoyed' with
(Page 15)
- Mrs Bebensee for telling the staff that they were to read various documents.
54 In respect to Ms Thatcher's relationship with Mr Normoyle, Mrs Bebensee reported that Ms Thatcher criticised him and that she also 'had great pleasure' in arguing with him in front of passengers. By that she meant that Ms Thatcher yelled at him from the other side of the airport, approximately 20 metres away.
55 On or about 12 January 2004, Mr Colling also visited Newman Airport. Mr Colling had been sent copies of the various emails which I have previously described. He was also privy to 'Incident Summary Reports' which were internal Qantas summaries of any incidents reported to Qantas concerning the operations of regional airports.
56 It was as a consequence of the incidents concerning the screening services at Newman Airport referred to in the emails and the reports that Mr Colling received that he flew to Newman. At the airport he met with Mr Cruse and, I accept, stressed to Mr Cruse the serious nature of the incidents and their potential impact on the reputations of both Qantas and the defendant. Mr Colling also met with the plaintiff and Ms Thatcher. He specifically told the plaintiff and Ms Thatcher of the high standards of customer service and professionalism expected by Qantas. In his statement, Mr Colling said that he recalled stressing the importance of the plaintiff's staff co-operating with Qantas staff at the airport. He also said that he told them that currently the plaintiff was not meeting Qantas' standards and that they needed to improve. I accept that that conversation took place.
57 Mr Colling recalled that during the conversation, Ms Thatcher often spoke over the top of him. Consistent with my previous findings about Ms Thatcher's personality I accept that Ms Thatcher would have expressed her views to Mr Colling in an assertive manner. Mr Colling also met with the plaintiff's staff. There is a dispute between the parties as to whether this meeting occurred at Newman Electronics or at the airport. In my opinion nothing turns on this.
58 At the end of January 2004 another audit of the Newman Airport screening point was conducted. The audit report is not in evidence.
59 On 3 February 2004 Mr Cruse sent an email to Newman Electronics stating that he had just had a meeting with Ms Cullen regarding her December 2003 visit to Newman and Paraburdoo. He advised the plaintiff and Ms Thatcher that:
(Page 16)
- Essentially, the screening process is working well in both ports. However, [Ms Cullen] did comment that the working relationship between Chubb and Qantas staff at Newman remains somewhat strained. This was interesting, particularly as Patrick Normoyle was absent on leave.
60 Mr Cruse reiterated that Qantas was the defendant's client and that the plaintiff and Ms Thatcher were to ensure that 'every effort' was made to maintain a professional and courteous relationship with all the Qantas staff. He told the plaintiff and Ms Thatcher that the remaining 'minor issue' that appeared to irritate the Qantas staff was whether the plaintiff's staff were open and ready for screening 90 minutes prior to aircraft departure.
61 Ms Thatcher replied to Mr Cruse's email. It is clear from the tone of her letter that she was not at all conciliatory in respect to the conflict with the Qantas staff. In part, her email said:
What is the problem with these people. Maybe they need to have a staff overhaul and start again with new staff.
62 She reiterated that the plaintiff's staff members were performing their job properly.
63 On 16 February 2004 Mr Colling sent an email to Mr Cruse attaching an email which he had received from Mr Jonathon Jackson, Manager, Aviation Security, National Jet Systems Pty Ltd. The email from Mr Jackson was in essence a complaint from Qantas cabin crew on behalf of a passenger who was distressed upon boarding an aircraft in Newman. The passenger's complaint was that she had had a positive explosives detection test (EDT) at the Newman Airport screening point and that during the subsequent search of her and her bags she was treated poorly by Ms Thatcher. She complained of being provided with insufficient information about what was occurring, a refusal by Ms Thatcher to provide her with her name, abruptness and rudeness by Ms Thatcher and a failure to understand why it was necessary to search her and her bags when she believed that the EDT had been negative.
64 Mr Colling advised Mr Cruse that he was 'rapidly losing patience' with Newman Airport screening services. He was of the view that there had been 'one incident after another' at what was a very small port. He expressed concerns that the plaintiff was not up to handling passenger screening and that the latest incident only confirmed his concerns. He sought a solution or asked whether 'they', and I assume that he meant the plaintiff, needed an official non-compliance letter from Qantas.
(Page 17)
- Mr Colling also sent his email to Mrs Tutthill. Mrs Tutthill sent an email to Mr Cruse in which she disputed Mr Colling's view that there had been 'one incident after another'. However, she said:
Most of these comments tended to boil down to the licensee, their suitability and specifically [Ms Thatcher].
66 Mr Cruse replied to Mrs Tutthill in agreement with her. He also thought that Mr Colling's email was 'a bit over the top' but he said that the 'general consensus is that [Ms Thatcher] is a liability'. He said that he would monitor the situation.
67 After making enquiries with the plaintiff and Ms Thatcher, Mr Cruse sent a return report to Mr Colling advising him that the plaintiff and Ms Thatcher disputed the passenger's version of the events and denied that the security staff had intimidated the passenger, failed to advise her of the procedures taking place or refused to give their names to the passenger. By contrast, Mr Cruse reported that the plaintiff had said that the passenger was 'very aggressive, hostile and abusive during the EDT process'.
68 On 17 February 2004 Mr Colling emailed Mr Cruse. He acknowledged that there were always two sides to a story but stated that he still had a complaint against the staff at the Newman Airport screening point which he needed to deal with.
69 On 18 February 2004 Ms Thatcher emailed Mr Cruse with a few queries. She advised him that she had an arrangement with the pilots whereby they let her know when they were ready to take their passengers and she would go and open the door and wait there until all their passengers had left the sterile area. She said that the Qantas staff did not come inside the sterile area at all. She wanted to know if this was the correct procedure. Mr Cruse passed the email to Ms Cullen who replied to Ms Thatcher that it was unnecessary for a screener to stand by the door as passengers left the sterile area. She advised that there was an authorised Qantas employee who stood at the door and that they knew
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- that, if they had opened the door from airside, they were not to enter into the sterile area. However, Qantas staff were authorised to enter the sterile area to assist a wheelchair passenger and to communicate with other passengers, when necessary.
70 On 19 February 2004 Qantas received a complaint from a passenger about the lack of response from Qantas regarding his claim for damage done to a computer component valued at $286 when it fell out of his computer laptop bag at the Newman Airport screening point.
71 The passenger told Qantas that after leaving the sterile area in Newman Airport for a very short period of time he was requested by the 'female security officer' to put his bag back through the screening machine. He said that the officer grabbed the handle of his laptop carry case and as she did so, a component for use with his laptop fell out of the bag and onto the ground. He alleged that when he asked the guard what she had been doing she said 'I don't think it's broken. I am a part time electronics technician'. The inference, which was later confirmed, was that Ms Thatcher spoke to him. He said that the officer told him that he would have to get it checked out at Perth Airport. At Perth Airport he plugged the item in and found that it did not work and then completed a claim form.
72 On 24 February 2004 the passenger became 'vitriolic and abusive' towards a Qantas staff member who telephoned him to explain that Qantas was awaiting a report from the plaintiff before determining the claim.
73 It appears that the passenger unreasonably objected to the way in which Qantas handled his complaint but behind the scenes the complaint led to further conflict between the parties, Qantas and Ms Thatcher.
74 The incident occurred on 7 February 2004 and Ms Thatcher, who was the supervisor at the time, completed a 'Passenger Screening Report'. This was the incorrect form and on 9 February Ms Cullen requested Ms Thatcher, by email, to complete a 'Damage Report' and a 'Security Incident Report'. Whilst Ms Thatcher provided some information about the incident to Ms Cullen, Ms Cullen did not receive the requested reports. Despite further requests for the reports, Ms Cullen still had not received the reports by 24 February 2004. The non-responsive and, at times, apparently obstructive approach by the plaintiff and Ms Thatcher to Ms Cullen's requests made Ms Cullen angry. She communicated this anger to Mr Cruse. The defendant's personnel were being pressured by Qantas personnel to provide the reports so that the passengers' claim could
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- be processed. Mr Colling complained to Mrs Tutthill about the handling of the matter by the defendant and the plaintiff.
75 Another issue which caused conflict occurred at about the same time. On 20 February 2004 Mr Thoars emailed the plaintiff and Ms Thatcher about an incident that had occurred at Paraburdoo Airport concerning the defendant's and the plaintiff's responsibilities should a security issue arise on the air side of the sterile area. In the course of the email he mentioned that he had discussed the matter with the plaintiff's screening supervisor in Paraburdoo and that he intended to meet with her the following week to finalise some local procedures. In response, Mr Thoars received an email from Newman Electronics which was followed by another email sent by Ms Thatcher later the same morning. The later email stated that she had checked with the plaintiff and directed that if there were any issues which Mr Thoars wished to discuss with the plaintiff's staff or which concerned the plaintiff's staff then Mr Thoars must direct the issues to either the plaintiff or herself. Ms Thatcher said that her staff would not attend any meetings not authorised in writing by Newman Electronics. She also said that any meetings with the plaintiff's staff which were requested by Qantas would be charged to it.
76 Mr Thoars gave evidence that direct communication at the staff level was essential, for example, to let the screening staff know about flight arrivals and delays, passenger numbers and any special circumstances. As I have noted, Mr Thoars had a lot of experience in the airline industry. Mr Thoars was, in my view, a credible witness. He appeared to me to be reasonable, competent and knowledgeable about the matters on which he testified.
77 Mr Colling was advised of this email exchange and in turn, emailed a complaint to Mrs Tutthill. He noted that the plaintiff's staff were paid for a four hour shift but only worked for approximately two hours. Thus, in his view, there should not have been a charge to Qantas if they were required to attend an additional meeting with Qantas staff. He also noted that he could not understand why the plaintiff would prohibit his staff from attending a meeting to address 'important operational issues'.
78 Mr Colling concluded his email by saying that the Paraburdoo screeners were doing a good job but were being let down by 'poor and incorrect advice' from the plaintiff.
79 By early May 2004 the relationship between Mr Normoyle, on the one hand, and the plaintiff and Ms Thatcher, on the other, had deteriorated
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- significantly. Mr Normoyle sent an email on 3 May to Newman Electronics, addressed to the plaintiff and Ms Thatcher, complaining about a number of matters and referring to a complaint that he had received from a passenger who claimed to him that Ms Thatcher had refused to allow him to take his hand luggage through the screening point because it was overweight. Mr Normoyle's email said that issues such as the weight of hand luggage were not the screener's concern. He raised other complaints. Whilst the language in the email was emphatic, it was not abusive or insulting.
80 Ms Thatcher replied to this email and referred to it as 'rubbish'. In another responsive email she referred to 'getting sick and tired of [Mr Normoyle's] slandering remarks'. She said that his staff were 'ecstatic at his leaving', a reference to his resignation which had just been announced.
81 It is not possible for me to judge all the rights and wrongs of the complaints raised by Mr Normoyle. Some of the complaints were hearsay and although some other incidents were partly admitted by the plaintiff or Ms Thatcher in return emails, they were the subject of explanations which may or may not be correct. However, I had the opportunity to observe Mr Normoyle give evidence and he appeared to me to be a reasonable person and his credibility was not successfully challenged in cross-examination.
82 It is probably not his complaints in May 2004 but the plaintiff's and Ms Thatcher's reactions to them which is most relevant. Despite Mr Cruse's and other's exhortations to the plaintiff and Ms Thatcher to remember that Qantas was their client and had to be treated as such, the plaintiff's response, usually made through Ms Thatcher, to Mr Normoyle's complaints was combative. This appears to have been Ms Thatcher's response to any criticism of the plaintiff's operations or of herself.
83 Mr Normoyle finished work at Newman Airport on 16 May 2004. In his evidence he said that from the time the plaintiff commenced screening services at Newman Airport, he observed Ms Thatcher to have 'very poor people skills'. He said that Ms Thatcher refused to discuss issues with him and to follow his instructions. He said that she was 'overly rude and abrupt with the passengers'. Whilst I acknowledge that there was tension between Mr Normoyle's role as airport manager and Ms Thatcher's role as the supervisor of the screening point, which was not the fault of Ms Thatcher, I am of the view that Mr Normoyle's observations were substantially accurate.
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84 After Mr Normoyle left Newman Airport, Mr Thoars worked at the airport for six days to assist with the handover to the new airport manager. He said that in six days he worked 10 shifts at the airport. It was put to him that Ms Thatcher only worked for two of those shifts and that therefore he could have only observed Ms Thatcher during those two shifts. Mr Thoars said that he was quite sure that Ms Thatcher was at the airport for more than two shifts.
85 On 31 May 2004, at the conclusion of his time in Newman, Mr Thoars sent an email to Mr Colling which was quite critical of the management of the screening point and, in particular, of Ms Thatcher. He repeated those criticisms in his evidence.
86 Mr Thoars said that he would not have made the criticisms he did on the basis of only observing Ms Thatcher for two shifts. As I have said, Mr Thoars struck me as a reasonable and credible person. There are two possibilities in respect to his evidence. Either he observed Ms Thatcher for more than two shifts or alternatively the conduct which he observed on the two shifts during which they were both working at Newman Airport was so extreme that it produced a very strong reaction from Mr Thoars. Either alternative does not flatter the plaintiff's management of the screening point or Ms Thatcher.
87 Mr Thoars said that he had never observed such poor customer service skills as those displayed by Ms Thatcher. He said that he observed that she was rude to passengers, she did not listen to passengers, she was unbending, she was brash and she did not explain procedures to passengers. Particular incidents that he complained of to Mr Colling were that he was physically stopped by Ms Thatcher from entering the sterile area at boarding time. This was contrary to the provisions of the Qantas Screening Operations Manual 2.5.21 which provided that employees or staff members of the operator of the airport in which the sterile area was located were exempt from screening. Mr Thoars also complained that Ms Thatcher stood by the gate at boarding time. He noted that the conduct 'tends to give a presence of intimidation' to passengers. Mr Thoars also complained that on a particular flight a passenger was refused entry into the sterile area as he had a security cable for his laptop computer. He was required to check in the laptop as baggage. In cross-examination it was pointed out to Mr Thoars that Ms Thatcher, according to the plaintiff's records, had not been on duty at that time.
88 Mr Thoars concluded his email by saying:
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- In my dealings with [Ms Thatcher] I have found that she has no customer services skills, and borders on being incompetent to perform the duties for Qantas.
I feel that she does not yet understand her role as a screening agent.
I am usually an easygoing person, who will sort out problems on a local level, but I do not wish to have much to do with this outfit.
They do not listen and do not understand how an airport operates.
89 Ms Thatcher denied these complaints. She also denied having been in the screening area in bare feet, another matter which Mr Thoars raised in evidence. She complained that she had seen Mr Thoars push his way through to the sterile area from air side to pass something to a passenger. She said that she thought that there had been a breach of security and she informed Mr Cruse of this incident at the time. She said that she remembered that Mr Cruse's response was that even Qantas staff did not enter from the air side into the sterile area without first being screened. If this advice was indeed given it appears to be contrary to the Qantas Screening Operations Manual 2.5.21 which says that employees or staff members of the operator of the airport in which the sterile area is located are exempt from screening into the sterile area on condition that they enter the sterile area other than via a screening point.
90 The plaintiff's counsel submits that as it seems that Mr Thoars was attempting to push through a tide of outgoing passengers, Ms Thatcher's conduct was reasonable. That submission has no substance as it was not Ms Thatcher's responsibility to regulate the boarding of passengers, to manage Mr Thoars or the performance of his duties.
91 On 19 May 2004 Mr Colling received a facsimile forwarded to him by Mr Cruse. The original facsimile was from the plaintiff, addressed to Mr Cruse, and it attached a 'Qantas passenger screening incident/information report' dated 18 May 2004. The report described an incident involving Ms Thatcher and two uniformed policemen at the Newman Airport screening point.
92 The senior police officer involved in the incident was Sergeant Michael Paul Sears. He gave evidence that the incident at Newman Airport occurred whilst he was on duty with Senior Constable Brett Panten dealing with a victim of domestic violence, and her child, for whom he had safety concerns. He said that it was arranged through Qantas for the woman and child to leave Newman on the next flight. He was also of the view that arrangements had been made with Qantas to gain
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- access to the secure area of the airport so that the woman could be secured from possible assault by her ex-partner until such time as the aircraft left. When Sergeant Sears and his partner arrived at the airport with the woman and her child, they escorted them into the main airport terminal and approached the screening area. Sergeant Sears gave evidence that as he approached the screening point he was met by Ms Thatcher. He said that both he and Senior Constable Panten were in full uniform, including firearms. He said that he had his identification displayed from his right pocket. This identification was in a wallet, the top of which could be bent back and placed in a pocket so that the identification, on the internal flap of the wallet, was visible. The internal flap had the police shield on one side and the personal particulars of the officer on the reverse side.
93 Sergeant Sears gave evidence that Ms Thatcher demanded that his identification and that of Senior Constable Panten be placed into a screening tray, apparently to go through the x-ray machine. Sergeant Sears told Ms Thatcher that he had the authority and the lawful right to enter the airport without going through the screening point or handing over his identification. He testified that he said to her 'I'm displaying my identification. I'm a uniformed police officer. I have the right to come through'. He said that Ms Thatcher then required Senior Constable Panten to display his police notebook because he did not have his identification on him at the time. Sergeant Sears said that in his view it was not a requirement that if a police officer was in uniform that he had to have his identification as well. He said that Senior Constable Panten handed over his notebook and Ms Thatcher placed it in the tray and also had a look at it. Sergeant Sears said that he then told Ms Thatcher that he was taking control of the situation and that she had to move aside. He then moved through the screening point with Senior Constable Panten. He said that whilst he was talking to Ms Thatcher, the woman and child had already gone through the screening point and were waiting in the sterile area. He said that Ms Thatcher told him four or five times that he did not have the right to go through without showing his identification. He said that he found Ms Thatcher to be rude and that she refused to listen to his instructions. He said that he told her that he was advising her as a police officer that she was to comply with his instructions, to move aside and to let him through. He said that another screening officer listened and acted on his instructions but Ms Thatcher ignored them. He said that he was concerned for the woman he was protecting and was concerned that he was being distracted by Ms Thatcher from his duties. After he went through the screening point he secured the woman and child in the search room in the sterile area. He and Senior Constable Panten stood outside
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- the room facing outwards so that they could deal with any perceived threat. Sergeant Sears said that Ms Thatcher followed them to their location and proceeded to tell him that she was entitled to tell him what to do. It appears that a verbal altercation occurred between Sergeant Sears and Ms Thatcher with Ms Thatcher insisting that she was entitled to do what she did and Sergeant Sears advising her that he was going to bring her conduct to the attention of his superiors and that she may be charged with an offence as a consequence. He said that she told him that she was in control and not him.
94 Sergeant Sears and his partner escorted the woman and child onto the aeroplane and then attempted to re-enter the airport terminal via the sterile area. Ms Thatcher stood at the door and refused them entry. She then secured the door so that they could not enter. Sergeant Sears and his partner were forced to exit the aircraft apron from a gate which avoided the terminal. Sergeant Sears re-entered the terminal and asked Ms Thatcher to attend at the police station the following day. He said that Ms Thatcher refused to acknowledge him or to speak to him so he gave his card to another screener.
95 Sergeant Sears gave evidence that he had been to the Newman Airport on many occasions whilst on duty. He said that he could not recollect that he had ever been asked to show identification. Sergeant Sears gave evidence that on other occasions when he was required to go onto the apron of the runway, he had returned to his vehicle through the terminal.
96 Sergeant Sears said that after this incident, an instruction was issued from Assistant Commissioner Lampard that police officers were to formally display their identification whilst in uniform at airports. Since then that instruction had been rescinded and it was now only a requirement for police officers not in uniform to display identification.
97 Ms Thatcher rejected Sergeant Sears' account of the incident. She said that on the day in question a Qantas staff officer had advised her that the police would be escorting a woman and child through to the aircraft and asked her whether they could be placed in the secure area. She said that she agreed. She said that later she saw the two police officers, the woman and the child waiting at the back of the queue of the people lining up to be screened. She said that 10 or so minutes later the woman and child were screened through into the sterile area and the two police officers waited to go through. She said that she assumed that they did not wished to be screened and she asked them for identification. She said she
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- did this because she had been instructed, during training in Perth, to always ask for identification from people who were wearing police or security guard uniforms. She said she thought it was the correct procedure to follow, even though she had seen Sergeant Sears before and was aware that he was a police officer. She denied that Sergeant Sears had his police identification in his top right hand pocket. She said that if he had it so displayed she would not have asked him to show the identification. She did not dispute that there had been a verbal altercation between her and Sergeant Sears.
98 Ms Thatcher gave evidence that later Sergeant Sears attempted to re-enter the terminal through the air side door. She said that she asked him to leave as he could not enter through this door. She said she did not want to have to close the screening area and rescreen passengers again. She said that it was Senior Constable Panten who placed a card on the front counter and told her to be at the station in the morning. She said that it would have been much easier for both police officers if they had put their identification on prior to entering the terminal and not created an incident.
99 Ms Thatcher completed a report about the incident and faxed it to Mr Cruse. Mr Cruse, in turn reported to Mrs Tutthill. He was of the view that Ms Thatcher's request to see the officers' identification was the 'correct protocol'. Mr Cruse had apparently had an earlier conversation with Officer Lampard who had agreed that the police officers entering airport terminals would show official identification and then pass through without having to be screened. Mr Cruse said that he had rung the police that morning and had spoken to Officer Lampard's staff. A short time later Mr Cruse had received a telephone call from Sergeant Sears. He noted that his account of the events at Newman Airport was different from Ms Thatcher's account.
100 The Qantas Screening Operations Manual 2.5.20 said that members of a police service of a State who are on duty are exempt from screening. The issue in this situation was not the right of Sergeant Sears and Senior Constable Panten to enter the sterile area without being screened but rather whether in order to be permitted to do so they had to show identification. Sergeant Sears said that he was showing identification, in any event.
101 Ms Thatcher does not deny that she knew Sergeant Sears was a police officer and that she had been told that the police would be bringing a woman and child through to the aircraft. In those circumstance, whilst it
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- may well have been appropriate for Ms Thatcher to initially request to see their identification, once it became clear that Sergeant Sears regarded that he had shown sufficient identification to enable him to move through into the sterile area, Ms Thatcher, armed with the information about Sergeant Sears and his duty that night, should have exercised commonsense, deferred to the authority of a police officer on duty and allowed him to proceed. Even if she had taken objection to Sergeant Sears' actions, on this occasion she had every indication that Sergeant Sears and Senior Constable Panten were on duty and had a right to enter the screening area. If she had wished to take their failure to comply with protocol further, she could have done so the following day. Seeking to debate the issue with the police officers after she had received specific instructions from Sergeant Sears, whilst he and his partner were on duty and attending to the safety of the woman and her child, was unproductive, showed poor communication skills, a lack of judgment and had the potential to endanger the safety of others.
102 Mr Colling received the information from Newman Electronics and Mr Cruse concerning the incident involving Sergeant Sears. Mr Colling appreciated that it was the usual protocol for police officers to show their identification before entering a sterile area. However, as he explained in cross-examination, it depends on how the request is made.
103 On Wednesday 2 June 2004, following consultation with his superior, Mr Colling decided that Qantas should require Ms Thatcher to cease work at the screening point at Newman Airport. Mr Colling gave evidence that he had never encountered such a poor performance record or received so many complaints regarding any other port he had managed. He said that he had never taken that kind of action before or since.
104 On the same date, Mr Colling complained via telephone and email to Mrs Tutthill about the performance of the plaintiff. It happened that on that day Qantas was hosting an airport screeners' forum in Sydney. Mrs Tutthill was attending the forum. Mr Colling arranged a meeting with Mrs Tutthill and during it he showed her the email from Mr Thoars dated 31 May 2004. He told Mrs Tutthill that he no longer wanted Ms Thatcher involved in screening services at the Newman Airport screening point. He said that nothing more could be done and that Ms Thatcher was not suited to screening services work. Mr Colling emailed Mr Thoars and Mr Cruse saying that Qantas no longer wanted Ms Thatcher to perform screening services. Mr Cruse discussed the email with Mrs Tutthill. Mr Cruse then sent an email to Mr Colling, advising
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- him that the defendant would speak to the plaintiff and have Ms Thatcher removed from screening services.
105 The plaintiff and Ms Thatcher were also attending the Qantas screeners' forum. On the same date, Mrs Tutthill informed the plaintiff that Qantas had a problem with Ms Thatcher and that she should be removed from screening services.
106 The plaintiff did not advise Ms Thatcher immediately of this conversation. At the end of the day Mrs Tutthill and Mr Keeling requested a meeting with the plaintiff and Ms Thatcher. At the meeting Mrs Tutthill raised an allegation that a laptop with a security chain had not been permitted to be taken onto an aircraft as hand luggage, a complaint that Ms Thatcher manned the door between the sterile area and the tarmac, Sergeant Sear's complaint and an issue of staff sipping liquid in containers. The plaintiff and Ms Thatcher gave their responses to Mrs Tutthill and Mr Keeling to the effect that these complaints and issues were not valid.
107 The plaintiff gave evidence that at this meeting there was no suggestion that there was any disciplinary aspect to the discussion or that the screening services contract was in jeopardy. He said that the earlier reference to Ms Thatcher not being involved in screening was not referred to at all during the meeting.
108 Later that day, at the hotel in which they were staying, the plaintiff informed Ms Thatcher of Mrs Tutthill's instruction that Ms Thatcher be removed from screening services. They had an argument and the plaintiff decided to return to Western Australia by himself.
109 On 2 or 3 June Mr Cruse contacted the plaintiff. He asked the plaintiff to meet him at his office in Perth on 4 June. The plaintiff agreed to the meeting.
110 On 4 June 2004 Mr Cruse informed the plaintiff that Ms Thatcher was not to be rostered on to perform screening services because Qantas did not want her performing screening services. The plaintiff complains that Mr Cruse did not give him any details as to why Ms Thatcher should be removed from her screening duties. He said that Mr Cruse merely referred to issues related to 'performance'. He said that Mr Cruse could not tell him what Ms Thatcher had done wrong and who at Qantas wanted her removed. The plaintiff gave evidence that he told Mr Cruse that he could not tell Ms Thatcher that she had been sacked and that he, Mr Cruse, would have to do it.
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111 Mr Cruse gave evidence that he did explain to the plaintiff that Ms Thatcher had not met acceptable standards of work performance and that complaints were still being received about her performance. He said that he told the plaintiff that Ms Thatcher had failed to establish an appropriate working relationship with Qantas staff, in particular Mr Normoyle and Mr Thoars. He said that he told the plaintiff that an example was that Ms Thatcher had been told by several people not to stand by the air side door during boarding but she had continued to do so. She had also offended Sergeant Sears.
112 Mr Cruse gave evidence that the plaintiff told him that he would tell Ms Thatcher not to work at the screening point. However, later that day, the plaintiff returned to Mr Cruse's office and told him that he was unable to work up the courage to tell Ms Thatcher and asked Mr Cruse to tell her. Mr Cruse agreed to do so. It is unnecessary for me to resolve this conflict in the evidence. Whatever occurred, Mr Cruse agreed to tell Ms Thatcher that she was not to work at the Newman Airport screening point.
113 Mr Cruse gave evidence that he then telephoned Ms Thatcher and told her that she was not to work at the screening point and that the main problems were that she had not conducted herself professionally, had not developed a good relationship with Qantas staff, especially Mr Normoyle and Mr Thoars, and that she did not have the right skills to work at the screening point. He said that Ms Thatcher disagreed with everything he said and that she started to yell and scream. She told Mr Cruse that it was all Mr Normoyle's fault and that she was very good at her job.
114 Ms Thatcher gave evidence of the same conversation. She said that it was very short and she denied emphatically that she yelled or screamed. She said that Mr Cruse did not mention Mr Normoyle, Mr Thoars, the Newman police or any other person. She admitted that during this conversation, Mr Cruse said words to the effect that Qantas wanted her removed from the screening point or Newman Electronics would not have a contract. She alleged that she asked Mr Cruse on a number of occasions what she had done but that he did not give her an explanation that she 'could understand, or that involved specific events or matters' that she could remember.
115 Later that day, Mr Cruse telephoned the plaintiff and told him of his conversation with Ms Thatcher. He gave evidence that he again told the plaintiff that Ms Thatcher was not to work at the Newman Airport screening point and that the plaintiff told him he would make sure that she did not. The plaintiff denied that he had agreed to stop Ms Thatcher from
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- working at the screening point. It does not appear to me that this is an important issue between the parties. The question is at what point the instruction was given by the defendant to the plaintiff and whether it was complied with.
116 On 6 June Ms Thatcher sent a letter to Qantas complaining about various matters. The complaints were investigated by Qantas and I heard evidence from one of the investigators, Ms Christine McIntyre. In my opinion nothing of importance turns on this part of the evidence.
117 In his reply, the plaintiff admits that he continued to roster Ms Thatcher for duty at the Qantas screening point at Newman Airport on 5, 6, 8 and 11 June 2004. In her evidence, Ms Thatcher admitted that she continued to perform screening services at Newman Airport on each day between 5 and 10 June, inclusive. The plaintiff gave evidence that he had to roster Ms Thatcher to work on 7 and 8 June because he was short staffed. There is no such evidence in respect to the later days. There is no evidence that the plaintiff communicated any staffing difficulties around this time to the defendant. Further, in his evidence, the plaintiff made it clear that he did not accept or act on the defendant's direction that Ms Thatcher not be rostered to work because, in his view, he had not been given a valid reason for the direction.
118 I find that the plaintiff rostered Ms Thatcher to work at the Newman Airport screening point between 5 and 11 June in defiance of the defendant's requirement that she not be rostered. I also find that, except perhaps for 7 and 8 June, the plaintiff did not have to roster her in order to maintain staffing levels. Even in respect to 7 and 8 June the plaintiff should have advised the defendant of the reason why he rostered Ms Thatcher. His failure to do so meant that the defendant could not be expected to take such staffing issues into account when deciding whether to terminate the screening services contract for breach of its directive.
119 On 8 June Mr Cruse was copied into an email from Mr Colling to Mrs Tutthill. It contained information from Mr Thoars that Ms Thatcher was still working at the screening point. After confirming this with Mr Thoars, Mr Cruse rang the plaintiff on 8 June and asked him why Ms Thatcher was continuing to work at the screening point. I accept that the plaintiff told Mr Cruse that he could not remember the reasons why Ms Thatcher had to be removed, so he had kept rostering her to work at the screening point. I accept that Mr Cruse told the plaintiff that he was in breach of the screening services contract. On the same date at 1.15 pm Mr Cruse sent the plaintiff an email confirming that he had advised the
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- plaintiff on 4 June that Ms Thatcher was not to be rostered for duty at the Newman Airport screening point. The email said that the request for him to remove Ms Thatcher was based on her performance standard. This email was in response to a request from the plaintiff sent by email on 8 June at 12.27 pm for Mr Cruse to put in writing 'the intention of your conversation with me regarding my staff'. Even though Mr Cruse's email states that it was sent on 1.15 pm the same day, the plaintiff denied receiving Mr Cruse's email until 10 June.
120 Mr Cruse was again informed by Mr Thoars that Ms Thatcher was continuing to work at the screening point. On 10 June 2004 Mr Cruse telephoned Newman Electronics and Ms Thatcher answered the phone. He asked to speak to the plaintiff and Ms Thatcher refused to put him through. Ms Thatcher gave evidence that the plaintiff was away doing work at remote mine sites on this date. Mr Cruse told Ms Thatcher that he wanted to speak to the plaintiff about her continuing work at the airport. Ms Thatcher told Mr Cruse that he did not have the authority to remove her and had not explained why she had to be removed. She also told Mr Cruse that she would continue to work at the airport. It is apparent that the plaintiff and Ms Thatcher had a united view that unless they were given what they regarded as satisfactory reasons for the direction for Ms Thatcher to cease work at the Newman Airport screening point that they were not going to comply with the direction. It is also apparent that, in their united view, there could be no satisfactory explanation for the direction.
121 On 10 June 2004 at 4.30 pm Ms Thatcher emailed Mr Cruse. The email advised that she had contacted the plaintiff and he had said to put anything Mr Cruse wanted to speak to him about in writing. Mr Cruse sent an electronic message to the plaintiff at 7.59 am the following day and instructed him to contact Mr Cruse as a matter of urgency on his mobile phone. Mr Cruse indicated that the plaintiff's refusal to return his call was inappropriate and a failure to contact him within the next 24 hours would be deemed to be a service non-compliance under the screening services contract.
122 A few minutes later, the plaintiff faxed a letter to Mr Cruse. He wrote that he had got back to Newman late the previous evening. He said that when he was out of town he kept in contact with base using his satellite phone. He said that if Mr Cruse had emailed or faxed him it could have been passed on and he could have replied. The plaintiff did not make it clear why he would be able to reply to written
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- communications but was unable to return Mr Cruse's call or email or fax Mr Cruse via Ms Thatcher, who appeared to be in contact with him.
123 The plaintiff further said that his conversation with Mr Cruse on 4 June was 'still vague' to him. He said that he had tried to understand where Mr Cruse was coming from but he had gone around in circles. He said that for him to act on any report he must have it in writing noting dates, times and officers involved. He repeated that he was predominantly uncontactable due to being away to catch up on work which he could not perform whilst he was at the screeners' forum. The letter confirms my view that the plaintiff was intent on not removing Ms Thatcher from the screening point, even temporarily until the defendant's and Qantas' concerns could be attended to, and was being deliberately obstructive in his dealings with Mr Cruse.
124 At 10.00 am on 11 June, Mr Cruse faxed a letter to the plaintiff. The letter recites Mr Cruse's recollection of the events since 4 June. It confirms that the plaintiff was told that Ms Thatcher's 'level of work performance … was not of an acceptable standard to either [the defendant] or Qantas'. After referring to the exchange of emails on 8 June, Mr Cruse stated:
I now require that, in accordance with the terms of [the screening services contract], you do not roster Ms Thatcher for duty at the Chubb/Qantas screening point at Newman Airport.
Failure to immediately comply with this instruction will be a 'fundamental breach' of [the screening services contract] and Chubb may need to act accordingly.
I require your written confirmation that Ms Thatcher has been excluded from duty at the Chubb/Qantas screening point at Newman Airport. This confirmation is to be received by close of business today, 4.45 pm 11 June 2004.
125 On 11 June Mr Cruse received an email and a fax from Ms Thatcher. Both documents indicated that the explanation received for the direction not to roster Ms Thatcher was considered to be inadequate. The second document indicated that the plaintiff had been made aware of the contents of Mr Cruse's letter and that there would not be compliance with the direction until a further explanation for the direction was forthcoming. Thus, even though the plaintiff may have been working away from Newman that day, he received adequate notice of the contents of the letter.
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126 The defendant did not receive any confirmation from the plaintiff that Ms Thatcher had been excluded from duty at the Newman Airport screening point. On 11 June Ms Thatcher worked at the screening point, with the plaintiff, between 6 pm and 8.05 pm. There is insufficient evidence to satisfy me that the plaintiff had to roster Ms Thatcher on duty in order to comply with other contractual obligations as to staffing numbers and the provision of a supervisor.
127 On 12 June 2004 Mr Cruse flew to Newman and met with Mrs Bebensee. At the airport he met the plaintiff and, after a period of time, the plaintiff took a letter of termination of the screening services contract dated 12 June 2004 from Mr Cruse. The plaintiff was also told that the screening services contract had been terminated and that he should leave the airport, effective immediately. Mrs Bebensee then took over the screening services at Newman Airport.
128 The termination letter advised that the defendant terminated the screening services contract, effective immediately upon receipt of the letter. It claimed the termination of the agreement was made under cl 9C(viii) of the screening services contract for a Fundamental Breach of the agreement by the plaintiff. It particularised that breach as a failure to comply with an instruction from the defendant to remove Ms Thatcher from any further duty at the Chubb/Qantas aviation screening contract at Newman Airport. It was said that the instruction was given in accordance with cl 5A of the screening services contract.
129 The plaintiff did not perform any further work under the contract after receipt of the letter of termination.
The screening services contract
130 The screening services contract identifies the defendant as being the 'Licensor' and both Newman Electronics and the plaintiff as being 'Licensees'. As I have already stated, Newman Electronics was not a corporation. The parties agree that they are the only parties to the contract. I will continue to refer to the parties to the contract as the plaintiff and the defendant.
131 The recitals to the contract state that the plaintiff wishes to be appointed by the defendant to operate 'a security guarding service, and other services from time to time, on the terms and conditions contained' in the contract. Clause 1A states that the defendant licences the plaintiff to provide 'Services' to 'Licensed Clients'. The schedule to the contract defines the 'Licensed Clients' as 'Qantas Airport screening at Newman and
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- Paraburdoo'. Otherwise, the schedule states that the defendant will allocate, by notice in writing to the plaintiff, clients to be serviced by the plaintiff under the contract, which notice will include details of client requirements. It also says that the defendant will advise, as required, of any other services to be carried out from time to time. It is accepted by the parties that the proper construction of the contract is that the defined client is Qantas and the defined services are screening services at Newman and Paraburdoo Airports.
132 The reference in cl 1A to cl 5 as specifying the services to be provided to the licensed clients is puzzling as cl 5 deals with the plaintiff's obligations and does not identify the licensed clients or the particular services to be provided.
133 Clause 5A states:
The Licensee will carry out the Services in a proper and professional manner, in conformity with any applicable standards and statutory requirements, client requirements and other requirements of the Licensor made known to the Licensee from time to time and will ensure that all work provided under this Agreement is provided by accredited personnel with appropriate qualifications and a level of performance reasonably acceptable to the Licensor and to clients. The Licensee will also ensure that its officers conduct themselves in such a manner so as not to cause prejudice, adversely impact upon, or have the potential to adversely impact upon, the Licensors' name, integrity or reputation with any clients of the Licensor and/or in the marketplace in general ('Standards').
134 Clause 9C(viii) states:
The Licensor may terminate this agreement immediately on written notice … on the happening of any one or more of the following events:
…
if the Licensee commits a Fundamental Breach of this Agreement.
135 Clause 9D defines a 'Fundamental Breach' in the following terms:
For the purposes of this clause, the expression 'Fundamental Breach' means any failure on the part of the Licensee, for reasons directly attributable to any act or omission on its part, to provide the Services in conformity with the Standards or any failure by the Licensee to comply with its obligations under clauses 5, 7, 8, 11 or 12 of this Agreement.
- Clause 5A is part of clause 5.
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Did the plaintiff breach the screening services contract?
136 The defendant's case is that on 2, 4, 8 and 11 June it made it known to the plaintiff that it and Qantas required that Ms Thatcher not be rostered for duty. I am satisfied that on 2 June Ms Tutthill orally advised the plaintiff of this requirement, on 4 June Mr Cruse orally advised the plaintiff of this requirement and on 8 and 11 June Mr Cruse, in writing, advised the plaintiff of this requirement.
137 I accept that the plaintiff may not have received the 8 June email from Mr Cruse until 10 June but I am satisfied that by 4 June and at all times thereafter the plaintiff knew that the defendant and Qantas required that Ms Thatcher not be rostered for duty. By 10 June, the plaintiff had received written notice of this requirement. I am also satisfied that on 11 June and prior to Ms Thatcher working that afternoon, the plaintiff was aware that the defendant regarded non-compliance with the directive to be a Fundamental Breach of the screening services contract.
162 This particular of reasonableness was not irrelevant to the defendant's decision to issue the directive that Ms Thatcher not be rostered for duty as even though Mr Normoyle had left Newman Airport by mid May, the defendant and Qantas were entitled to believe that
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- Ms Thatcher's communication skills had not changed. This was particularly so in light of Mr Thoars' email of 31 May.
163 In respect to particular 1(e) I am inclined to the view that Mr Thoars' evidence is to be accepted. I acknowledge that this is a minor matter which would not by itself, or even in conjunction with other matters, justify the defendant in issuing the directive to the plaintiff not to roster Ms Thatcher for duty.
164 The particulars of reasonableness also alleged that Ms Thatcher's conduct was in breach of various parts of the Qantas screening manual and DoTARS directions. In my view it is unnecessary, in light of my findings to determine whether her conduct breached those other requirements.
165 I am satisfied that the defendant has established particular 2. I am satisfied that Ms Thatcher continued to stand by the airside door even after she was instructed on separate occasions by Mr Cruse, Ms Cullen, Mrs Bebensee and Mr Thoars not to do so. In standing by the airside door, Ms Thatcher was not available to attend to her duties at the screening point, when necessary, and there was also the potential for her to interfere with Qantas' boarding procedures. There is also the fact that her continuation of this conduct after she had been told on a number of occasions not to do it, indicated a refusal to accept reasonable direction from the defendant and Qantas.
166 In respect to particular 3, I accept that there was a deficiency in the documents available at the screening point, especially at the commencement of the contract. However, it does not seem to me that this can be blamed on Ms Thatcher and it would not have been reasonable for the defendant to issue the directive to the plaintiff on the basis of this particular.
167 In respect to particular 4, except as I mention in the next paragraph, I am satisfied that Ms Thatcher dealt with Sergeant Sears and Senior Constable Panten as alleged in the particular. I am satisfied that in doing so she was in breach of the Qantas screening manual. Ms Thatcher claims not to have received a copy of the Chubb standing instructions and it is unnecessary for me to decide whether she did or not. I am satisfied that the way in which Ms Thatcher acted on this occasion breached cl 5A of the contract in that she acted so as to cause prejudice, to the defendant's name, integrity or reputation with Qantas. Reasonably, her level of performance was not acceptable to the defendant and Qantas.
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168 I acknowledge that the evidence that Ms Thatcher 'attempted to screen' Sergeant Sears and Senior Constable Panten is inadequate. However, there remains the allegation that she dealt with the officers in a manner that was rude and abrupt. In this respect the plaintiff says that it is fatal to proof of the particular that Ms Thatcher dealt with the officers in accordance with a protocol previously agreed with the Western Australian police. Whilst there is some evidence to that effect, it was quite properly a matter of significant concern to both the defendant and Qantas that Ms Thatcher allowed the conflict with the police officers to escalate to the degree that it did. It was open for the defendant to conclude that Ms Thatcher was rude, abrupt and had failed to act in a proper and professional manner whilst carrying out the Services in connection to the police officers. A protocol with the police service cannot override directions given to a person by a police officer apparently acting bona fide in the course of his duties. Ms Thatcher's failure to acknowledge that fact and to deal with the dispute in some other manner and on some other occasion clearly entitled the defendant and Qantas to conclude that it was not appropriate for Ms Thatcher to continue to carry out screening services at Newman Airport, at least until there was a change in her attitude and an indication that she was able to perform her role in a less confrontational way.
169 I find particular 5 has been proven. Ms Thatcher did not dispute that she had stopped Mr Thoars from entering the sterile area to hand a passenger a boarding ticket. As I have previously stated, Mr Thoars was entitled to do so and Ms Thatcher should have been aware of that right. It was not Ms Thatcher's job to regulate Mr Thoars or the flow of passengers out of the sterile area.
170 The plaintiff submits that the defendant's requirement was not reasonable given the level of training that Ms Thatcher had received. There may be some substance in this submission in respect to the more minor allegations made against Ms Thatcher. However, Ms Thatcher had received more than basic training. She had also received advice and assistance from Ms Cullen, Mrs Bebensee, Mr Normoyle and Mr Thoars. All these people were either experienced screeners or experienced airport operators. I do not find that the issue of training undermines my findings in respect to this issue or the reasonableness of the defendant's requirement, in general.
171 Given my findings in respect to the particulars of reasonableness and the background against which those particulars must be assessed, I am of the opinion that the defendant's requirement of the plaintiff that he not
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- roster Ms Thatcher for duty was reasonable in all the circumstances. There had been a number of incidents which entitled the defendant and Qantas to conclude that Ms Thatcher's level of performance was not acceptable and not in accordance with the Standards. The Standards bound the plaintiff and the defendant was entitled to take them into account when deciding whether to issue the requirement to the plaintiff that Ms Thatcher not be rostered for duty.
172 The plaintiff attempted to portray Mr Thoars' complaint as the sole basis for the defendant issuing the directive to the plaintiff not to roster Ms Thatcher. Whilst Mr Thoars' complaint was the last in time and a matter that was taken into account by the defendant, I am satisfied that it was not the only reason why the directive was given. It, and the other proven incidents rendered the directive given to the plaintiff to be a reasonable requirement.
173 It is not in dispute that the plaintiff continued to roster Ms Thatcher for duty, in defiance of the directive to him. Thus, I find that the plaintiff breached the screening services contract as alleged in the defence, by failing to comply with the defendant's reasonable requirement of the plaintiff not to roster Ms Thatcher to work at the Newman Airport screening point. Thus, the first issue that I have posed for my determination is answered in the affirmative.
Did the plaintiff's breach of the screening services contract give the defendant a right to terminate the contract?
174 The defendant claims that by virtue of the plaintiff's breach of contract it was entitled to terminate the agreement pursuant to cl 9C of the screening services contract. The relevant parts of cl 9C have been set out earlier in these reasons.
175 The only dispute between the parties in this respect is whether the breach of the contract was a 'Fundamental Breach' of the screening services contract. Clause 9D sets out a meaning of 'Fundamental Breach'.
176 The parties were free to stipulate which breaches of the contract were a Fundamental Breach giving rise to a contractual right to terminate the contract. They defined the term very broadly. Such a breach 'may seem of little importance' and the term breached may not be regarded as essential or fundamental at law. Nevertheless, a court must give effect to any such agreement: Shevill v Builders Licensing Board (1982) 149 CLR 620, 627 per Gibbs CJ.
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177 I find that the plaintiff's breach constituted a failure on behalf of the plaintiff, for reasons directly attributable to his acts or omissions, to comply with his obligations under cl 5A of the screening services contract.
178 A number of the particulars of reasonableness, on which the defendant relies, may not on their own constitute a Fundamental Breach of the screening services contract. However, the plaintiff's open defiance of a reasonable requirement made of him not to roster Ms Thatcher for duty was a Fundamental Breach of the contract. The parties were under a duty to co-operate with each other in carrying out their reasonable requests. Having found that the directive given to the plaintiff was a reasonable requirement it is plain that his open defiance of the requirement was destructive of the contractual relationship between the parties.
179 The plaintiff submits that the definition of Fundamental Breach in cl 9D should be read ejusdem generis with cl 9C(i) - (vii). In my view it is not possible for the definition of Fundamental Breach to be so read. The situations covered by cl 9C(i) - (vii) cover a wide range of circumstances and there is no identifiable category or kind of breach referred to in those clauses.
180 I am therefore of the opinion that the plaintiff's breach of contract gave the defendant a right to terminate the screening services contract pursuant to cl 9C(viii).
Did the defendant affirm the plaintiff's breach of contract so as to remove its right to terminate the contract?
181 The parties are in agreement that the defendant will have lost its right to terminate the screening services contract for breach if it affirmed the contract after the breach by engaging in conduct consistent only with the continued existence of the contract: Carr v JA Berryman Pty Ltd (1953) 89 CLR 327.
182 The Fundamental Breach of the screening services contract that I have found proven was not affirmed by the defendant. There was never any indication given by any of the defendant's officers to the plaintiff after 4 June that if he continued to roster Ms Thatcher for duty the defendant would not exercise its rights to terminate the contract. Further, the defendant, by its servants and agents, did not engage in conduct consistent only with the continued existence of the contract after that date. Rather, Mr Cruse continued to impress upon the plaintiff the importance of him
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- complying with the directive. Nine days after the directive was first given and after having given the plaintiff a reasonable opportunity to comply with the directive, he advised the plaintiff that if he failed to comply and undertake to comply with the direction then he would be in Fundamental Breach of the contract. He further advised that the defendant may have to act 'accordingly'. That reference could only be a reference to taking action under the contract to terminate it. Even then the plaintiff was given another opportunity to rectify his breach. He failed to take that action.
183 The third issue that I posed for my determination is answered in the negative.
Was the defendant required to give written notice of termination immediately upon the breach and if so, did it fail to do so?
184 I agree with the plaintiff that there must be a temporal connection with the Fundamental Breach and the exercise of the right to terminate the contract. However, notice of termination does not have to be given immediately upon the breach. For example, giving the plaintiff a reasonable period after a breach in which to rectify it and the giving of a notice of termination after that period if there has been no rectification could well be compliance with the requirement in cl 9C to give notice of termination 'on the happening' of the 'Fundamental Breach'.
185 The first time that the plaintiff rostered Ms Thatcher for duty after 4 June 2004, constituted a Fundamental Breach of the screening services contract. However, that was not a lone breach. There was a continuing breach of the contract each time the plaintiff rostered Ms Thatcher for duty and permitted her to work. Thus, as events unfolded, the notice of termination was given less than 24 hours after the last breach of the contract. This satisfied the requirements of cl 9C of the contract.
186 Thus, the fourth issue I have posed for my determination should be answered in the negative and the fifth and final issue is also answered in the negative.
Conclusion on liability
187 For these reasons, the plaintiff has failed to prove that the defendant breached the screening services contract when it purported to terminate it on 12 June 2004. Rather, I find that on that date the defendant validly terminated the screening services contract.
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Damages
188 I will now proceed to provisionally assess damages.
189 The plaintiff claims damages for loss of profits of not less than $442,960. The defendant admits that if it invalidly terminated the screening services contract, the plaintiff would be entitled to damages for loss of profit. However, it disputes the quantum of loss of profit damages claimed by the plaintiff.
190 The plaintiff also claims general damages for stress, anxiety and humiliation as a consequence of the defendant's alleged breach of contract. The defendant denies that the plaintiff would be entitled to general damages.
191 First, I will determine the dispute between the parties in respect to the plaintiff's entitlement to general damages.
192 The plaintiff's claim is based on the dicta in Baltic Shipping Company v Dillon (1993) 176 CLR 344 and Olympic Holdings Pty Ltd v Lochel [2004] WASC 61.
193 The general rule is that damages for anxiety, disappointment and distress are not recoverable in actions for breach of contract. The exceptions to that general rule were described by the High Court in Baltic Shipping Company v Dillon. In that case, a majority of the High Court held that damages for disappointment and distress as a consequence of a breach of contract were recoverable if those injuries proceeded from physical inconvenience caused by the breach or if the object of the contract was to provide enjoyment, relaxation or freedom from molestation (Mason CJ, with whom Toohey and Gaudron JJ agreed 362 - 365 and McHugh J 404 - 405).
194 Neither of those exceptions applies in this case. The contract was clearly not one the object of which was to provide enjoyment, relaxation or freedom from molestation. Nor can it be said that the claimed disappointment and distress of the plaintiff proceeded from physical inconvenience caused by the alleged breach of contract. The plaintiff submits otherwise. He submits that the termination of contract caused him physical displacement because his business was displaced from the Newman and Paraburdoo Airports. I do not accept that this was the sort of physical inconvenience that the justices of the High Court were referring to in Baltic Shipping Company v Dillon. The examples they
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- gave and other cases they referred to related to personal physical inconvenience.
195 Further, in citing the trial judge's decision in the Olympic Holdings' case, the plaintiff has overlooked that the trial judge's decision to award general damages for breach of contract was overturned by a majority of the Court of Appeal: Thorpe v Lochel (2005) 31 WAR 500 [149] - [159] per Pullin JA and [41] - [42] per Roberts-Smith JA.
196 The plaintiff's claim for general damages fails.
197 I now turn to consider the plaintiff's claim for damages for loss of profits.
198 The first issue between the parties is in respect to the date the contract began. The later the contract began the greater the plaintiff's damages would be. The dispute between the parties is whether the contract commenced on 25 October or 1 November 2003.
199 Clause 1B of the screening services contract states that the term of the contract commences on the date specified in the schedule to the contract. In the schedule the commencement date is stated as 'TBA October 2003 as required by Qantas'. It is not in dispute that TBA means 'to be advised'. The front page of the screening services contract is dated 22 September 2003. The plaintiff appears to have signed a confidentiality and restraint clause on page 21 of the contract on 22 October 2003. There is evidence that prior to the screening services commencing at Newman Airport the defendant agreed to pay and did pay the plaintiff under the contract from 25 October. This was so that the plaintiff could secure the employment of his employees. As I have found earlier in these reasons, the screening services did not commence at Newman Airport until later in November.
200 I am of the view that the term of the screening services contract commenced on the first date that the plaintiff was paid under the contract. That date is 25 October 2003.
201 The next issue between the parties is whether the plaintiff is entitled to a greater sum for damages for loss of profits because of the intention he expressed in his evidence to increase the hours he personally worked at the Newman Airport screening point. The reasoning is that if the plaintiff increased his average hours of work at the screening point from 12 hours per week as they were up until the date of termination to 37 hours per week then his profit from the contract would have been approximately
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- $62,000 greater because he would not have been paying an employee to work those hours.
202 The defendant disputes that the plaintiff would have increased his hours of work at the screening point. It says that it is not reasonable for me to find that the plaintiff would have done so based on his historical working pattern. It also says that it is unrealistic for me to assume that even if the plaintiff had an intention to increase his hours that he would have commenced to do so immediately on the date the contract was terminated. Thus, the defendant says that if I was to accept the plaintiff's evidence in this regard I would have to determine the date on which the plaintiff would have put his intention into effect. This it says would require me to set an arbitrary date. Lastly, the defendant says that if I am to find that the plaintiff would have increased his hours then it follows that there would have been a corresponding decrease in the profit the plaintiff earned from his other work such as maintaining and repairing business machines. It says that this decrease must be brought into account.
203 In respect to this last issue the plaintiff submits that he would not have had to reduce that work. He testified that he could have chosen to reduce his other contracts but that he could also have maintained them by using other staff to perform that work. The plaintiff testified that other staff, who he paid significantly less, could have been employed to repair and maintain the business machines instead of him. He said that the businesses with whom he had contracts would have continued to pay him the same hourly rate that they paid if he performed the work. He also alleged that he would have gained by not having to maintain an off road vehicle to do that work. He alleged that the other employees would have to maintain their own vehicle to do the work. When I asked him why he had arranged his business so that he performed the work if there was profit in him employing others to do it, he said that it was because he found the travelling interesting and enjoyable.
204 I was not convinced by the plaintiff's categorical assertions that he could 'very easily' have found an extra 25 hours a week to undertake the screening services contract. The plaintiff had had six months of the screening services contract in which to reorganise his workload. He had not done so and there is no objective evidence that he had any firm plans to do so in the near future.
205 These findings do not mean that I do not accept that the plaintiff may have had a future intention to decrease the amount of other work he
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- performed and to increase the hours he spent working at the screening point. I am of the view that some allowance should be made in general damages for this likelihood but that it needs to take into account that the plaintiff's intention was certainly not going to be implemented immediately as at 12 June 2004 and also that inevitably, in my view, there would have been a reduction in his income and profit from his other business ventures had he embarked on this plan.
206 The parties' expert accountants were in agreement that if the plaintiff had increased his hours at the screening point to 37 hours per week then an additional amount of approximately $62,000 should be allowed to his loss of profits claim, without an allowance being made for any loss of revenue from other sources and accepting that his hours increased immediately. Given my findings in respect to the allowances that have to be made, this amount should be reduced to $30,000. There is an element of arbitrariness in this assessment. However, given the state of the evidence I simply must do the best that I can to determine the amount of the plaintiff's claim in this respect.
207 The next issue between the parties relates to the expenses incurred by the plaintiff in order to perform the screening services contract. The defendant says that these expenses must be deducted from the plaintiff's income under the contract in order to determine his loss of profit.
208 The plaintiff submits that he had no such expenses. First, he says that there is a handwritten amendment to the screening services contract which provides that the defendant will pay 'expenses as agreed with Don Cruse' and 'uniforms as agreed with Don Cruse'. The plaintiff testified that the expenses that the defendant agreed to pay included uniforms and training. Secondly, the plaintiff testified that he had little if any other costs associated with the screening services contract because items like phone and computer were existing business costs. Thirdly, although he was required under the contract to provide a mobile telephone, up until the date of termination he did not have one as mobile coverage at Newman Airport was very poor. Fourthly, the plaintiff acknowledged that he made a motor vehicle available to the supervisor at the screening point but again he asserted that that was an existing vehicle and, thus, a cost which existed prior to the commencement of the contract. Fifthly, the plaintiff acknowledged that he had to maintain his security agent's licence as did Ms Thatcher but again he asserted that this was a pre-existing cost.
209 The plaintiff was obliged to supervise the screeners at Paraburdoo and to travel to Paraburdoo on occasions for this purpose. He testified
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- that he only went to Paraburdoo when he had another job there and so his travel expenses were covered by that other work. It follows that if the plaintiff was working 37 hours per week at Newman Airport he would not be free to supervise Paraburdoo Airport screeners and neither would he be able to take advantage of his other work to cover the expenses of doing so.
210 I accept that most of the expenses under the contract were either covered by the defendant or were not very great in amount. Further, other expenses are difficult to particularise because the plaintiff operated his business in such a way that they were not separately accounted for. However, I do not accept the plaintiff's bold assertion that there were no expenses associated with the business. His evidence in this respect had an air of unreality about it. He testified that he had, for example, no living expenses, other than perhaps food.
211 I make similar comments in respect to Ms Thatcher's evidence on this issue. She appeared reluctant to concede that there were motor vehicle expenses associated with the performance of the contract. The import of her evidence was that such expenses would have been incurred in any event. This again, does not accord with the reality of the obligations under the contract.
212 The defendant submits that I should rely upon a document referred to throughout the trial as a 'Rates' document in order to determine the plaintiff's expenses related to the contract. This document was prepared early in the negotiations between the plaintiff and the defendant to establish the contract. It was intended by the parties to give an indication as to the costs that may be associated with the screening services contract. There is a dispute between the parties as to who provided the rates within the document. Ms Thatcher denies that she provided the rates, as does Mr Cruse. In any event, I find that the rates provided in the document were an estimate of the costs associated with the screening services contract and cannot be relied upon as an accurate reflection of those costs, particularly in light of the way in which the plaintiff structured his business and ultimately employed screeners on a casual basis.
213 Consequently, I am left in the position that although I accept the defendant's submission that there were costs associated with the contract which the plaintiff has not brought into account in determining his loss of profit, I am also of the view that the defendant's assessment of those costs is greater than the real costs. Again, I must simply do the best that I can to determine the amount that should be deducted from the plaintiff's gross
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- profit under the screening services contract to allow for the costs associated with it.
214 Excluding the issue of public liability insurance which I will come to next, the defendant's accounting expert assessed the plaintiff's business related costs from the date of termination to the end of the initial term of the contract to be approximately $75,750. In my view it would be reasonable to make an allowance of a third of this amount, being $25,250.
215 The next issue between the parties in respect to damages for loss of profits is the cost of public liability insurance. The defendant called a very experienced insurance consultant, Mr Frank Leopold Gaston Hoffmann, who analysed how a reasonably competent and prudent individual underwriter would examine the exposure that was involved in underwriting the risk of insuring the plaintiff's work under the screening services contract. He gave evidence of the difficulty in obtaining insurance cover in 2004 given the World Trade Center disaster and the perceived risk involved in a screener negligently allowing a passenger to board an aircraft with a weapon. Because of the nature of the risk and the limited experience of insurers in covering the risk, Mr Hoffmann was of the opinion that there was no 'correct' or 'market' price for such a risk.
216 Mr Hoffmann expressed the view that the plaintiff's insurance from 18 August 2003 to August 2004 for a total cost of $12,485 did not reflect 'any sound or prudent underwriting and was considerably insufficient'. He noted that the insurer had been advised by the underwriter that it could no longer cover passenger screening risks and that the insurer would have to seek quotes from other markets. Mr Hoffmann was of the view that this was because of the nature of the risk.
217 Mr Hoffmann also referred to a quote which Mrs Bebensee had obtained at about the same time through very large insurance brokers for approximately $70,000 per annum. Mrs Bebensee gave evidence that the increase in the cost of public liability insurance was an issue which caused her to withdraw from the screening services industry. Mr Hoffmann was of the view that the quote would indicate to him that the insurer approached was 'pitching its price at a level that indicated it was less than keen on the risk but to accommodate this major broker at least produced an offer to affect cover'.
218 Lastly, Mr Hoffmann referred to a quote which the plaintiff had obtained for the purpose of the litigation from Calliden Australia Ltd (Calliden). Mr Hoffmann gave evidence that Calliden was a relatively
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- new Australian insurer of excellent repute. Mr Hoffmann was of the opinion that the reason for the cheapness of the premium quoted, being $5,217 including charges, was immediately evident on perusal of the details of the liability cover set out in its schedule. Mr Hoffmann noted that the quote did not cover errors and omissions, namely an error or omission in the scrutiny of passengers' carry on baggage and what such passengers might have on their person. Thus, Mr Hoffmann was of the opinion that the policy quoted would respond to acts of the insured causing injury or damage to property such as slips and falls, alleged assault, damaging third party property and the like but not the consequences of errors and omissions in the diligence employees brought to their occupational duties which may result in, for example, a passenger taking a weapon on board a plane and causing substantial injury and damage. Mr Hoffmann opined that a policy that excluded errors and omissions of an occupational nature did not and could not provide cover appropriate to the business of the plaintiff under the screening services contract and that the premium charged for such a policy had no resemblance or connection with what an insurer might charge for adequately worded cover.
219 Mr Hoffmann acknowledged that any attempt by him to propose what a reasonable premium would have been in 2004 was wholly subjective even with his many years background in general insurance and some years specialising in the underwriting of 'hard to place' liability insurance. Nevertheless, he opined that he doubted that any competent insurer would have contemplated the risk for less than $35,000 to $40,000 plus charges.
220 In cross-examination Mr Hoffmann acknowledged that the quote from Calliden asserted that errors and omissions cover could be included at an additional premium of $3,357.75. Mr Hoffmann said that he had 'every reason to say that they err and their youthfulness in the business made them err'. He even went on to say that in view of what happened in the World Trade Center disaster the quote was a 'stupidity'.
221 Thus, I have the evidence of an undoubted expert, Mr Hoffmann, who is of the view that the plaintiff would have paid in the vicinity of $40,000 per year for public liability insurance cover under the screening services contract in 2004 and the evidence of a quote for public liability insurance provided to the plaintiff in June 2007 for a total of $8,871. I further have the evidence from Mrs Bebensee about the quote of approximately $70,000 she had received.
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222 In light of this conflicting evidence, none of which relates to a policy which was actually written, it is not easy to determine the cost of public liability insurance to the plaintiff in 2004 until the end of the screening services contract.
223 Again, I must simply do the best with the material that I have. The quote received by Mrs Bebensee, as Mr Hoffmann said, probably reflected the reluctance of the insurer or underwriter to cover the risk. Therefore, I will not rely on it. The quote received by the plaintiff in 2007 was just that and stated that the cost may change if the quote was accepted. It seems to me to be so unlikely as to be nonsensical to suggest that the plaintiff would have been able to obtain public liability insurance in 2004 at a cheaper rate than he had obtained it in 2003. Thus, I am of the view that I should assess the cost of public liability insurance as greater than the cost of the plaintiff's previous cover. As to Mr Hoffmann's assessment, if there was no other evidence I would be more than happy to accept it as he was a very credible witness. However, in light of the other evidence I am of the view that I should not rely entirely on his evidence. Mr Hoffmann himself acknowledged the subjective nature of his opinion.
224 Taking all these matters into account, I am of the view that it is appropriate to determine that the costs of the public liability insurance under the screening services contract from June 2004 to the end of the contract would have been $20,000.
225 The plaintiff relied upon the expert accounting evidence of Mr Keith Graeme Lingard, a chartered accountant and a partner of Stanton Partners, Chartered Accountants. The defendant relied upon the expert accounting evidence of Mr Martin Langridge, a chartered accountant and a partner of Deloitte Touche Tohmatsu, chartered accountants. I am grateful to both accountants for their reports and for their conferral which resulted in them agreeing a number of matters and identifying the matters in dispute between them.
226 Despite the evidence of the accounting experts and the large degree of agreement between them, the plaintiff says I should prefer the evidence of Ms Thatcher as to the amount of the plaintiff's loss. I decline to do so. It is only prudent for me to rely on the expert's opinions. They were provided with all the relevant accounting documents and prepared reports based on them.
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227 As the base figure for the commencement of the calculation of damages I rely upon Mr Langridge's assessment which in turn was based on a contract commencement date of 25 October 2003. That figure is $378,801. To this figure I would add $30,000 to allow the plaintiff additional profit for an anticipated greater number of hours that he intended to work at the Newman Airport screening point. From the consequent subtotal I would deduct a total of $45,250. This figure comprises $25,250 in business related costs which have not otherwise been brought into account and $20,000 for the costs of public liability insurance to cover the remaining term of the screening services contract. Thus, the total damages would be $363,551.
Conclusion on liability and quantum
228 For the above reasons the plaintiff's claim is dismissed. I have proceeded to provisionally assess the plaintiff's damages had he succeeded against the defendant at $363,551.
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