Lau v Bob Jane T-Marts Pty Ltd - [2004] VSC 69

Bob

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4992 of 2003

THOMAS LAU	Plaintiff
v
BOB JANE T-MARTS PTY LTD	Defendant

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	16-20 and 23-25 February 2004
DATE OF JUDGMENT:	11 March 2004
CASE MAY BE CITED AS:	Lau v Bob Jane T-Marts Pty Ltd
MEDIUM NEUTRAL CITATION:	[2004] VSC 69

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Contract of employment - Termination of employment - Payment in lieu of reasonable notice - No fixed minimum term - Bonus incentive – Lack of certainty and completeness as to terms of agreement – No overpayment of superannuation and expenses.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	W.F. Gillies	Michael J. Amad Pty
For the Defendant	P.J. Hayes	Raj Lawyers

HIS HONOUR:

Introduction

On 9 October 1999 the plaintiff was given three months' notice of his retrenchment by Pasminco Ltd as Group Manager Marketing. At that time he had been so employed for 16 months on a salary of $135,000 per annum inclusive of other benefits including superannuation and the use of a car.

On 14 October 1999 the plaintiff forwarded a letter to the defendant seeking employment with the defendant. The letter characterised the plaintiff as an experienced business manager with particular expertise in sales and marketing, project management, business development and planning, and international relations. It enclosed an impressive personal resumé indicating that after an initial degree with first class honours in mechanical engineering from a Malaysian university the plaintiff had gone on to obtain post-graduate qualifications at the University of Cambridge in the United Kingdom. He then progressed from engineering to managerial positions. He had managerial experience in the previous decade with Pasminco Ltd, BHP Ltd, BHP Engineering Ltd, Exon Australia Ltd and the Ford Motor Company of Australia Ltd.

At the time in 1999 and at all material times thereafter Mr Bob Jane held 90 percent of the shares in the defendant and was its Managing Director. He controlled the defendant and had the ultimate say on all issues of importance affecting its management. It was his view in late 1999 that it was appropriate for the defendant to bring in a new Chief Executive Officer due to a decline in profitability in previous years and the substantial management difficulties that had been encountered.

Bob Jane (whom I am satisfied at all material times had authority to deal with the plaintiff on behalf of the defendant) met with the plaintiff on 1 November 1999 and was impressed by the plaintiff and his qualifications. After some discussion Bob Jane agreed that the defendant would employ the plaintiff and on 3 November 1999 he wrote to the plaintiff in the following terms:

"Dear Thomas
Thank you for sending me your resumé and for finding time to meet with me on Monday 01 November 1999.
This letter serves to confirm my offer to you to be employed as the Chief Executive Officer of the Bob Jane T-Marts Tyre Group, commencing on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] VSC 69
Decision Date: 11 March 2004

CaseChat Overview and Summary

Lau brought a claim against Bob Jane T-Marts Pty Ltd for payment in lieu of reasonable notice following his termination of employment. The Federal Circuit and Family Court of Australia was tasked with determining the amount of notice to which Lau was entitled, as well as the calculation of his bonus incentive. The central legal issues revolved around whether Lau's employment contract was terminable at will due to the absence of a fixed minimum term, and the correct calculation of his bonus incentive given the lack of certainty and completeness in the terms of the agreement. Additionally, the court needed to address whether there had been an overpayment of superannuation and expenses.

The court held that Lau's employment contract did not specify a fixed minimum term, and therefore, his employment was terminable at will. Consequently, Lau was not entitled to a notice period but rather payment in lieu of reasonable notice. The court determined that reasonable notice was two months based on Lau's years of service. Regarding the bonus incentive, the court found that while there was an agreement in principle, the terms were not certain or complete enough to enforce a specific entitlement. However, given the lack of overpayment of superannuation and expenses, the court awarded Lau the full amount of his bonus incentive as per the agreement.

The court's reasoning was grounded in established principles of contract law, focusing on the certainty and completeness of the terms of the agreement, as well as the equitable treatment of the employee in the context of termination. The final orders of the court included the payment of two months' salary to Lau in lieu of reasonable notice and the full amount of his bonus incentive, subject to the deduction of any overpaid superannuation and expenses, which were found to be nil in this case.

Orders