Liftronic Pty Limited v Unver

Liftronic Pty Limited (Liftronic) appealed to the High Court of Australia against a decision of the Full Federal Court which had affirmed a judgment in favour of Mr Unver. The dispute concerned the interpretation of a clause in a contract of employment, specifically clause 10, which dealt with the calculation of a bonus payable to Mr Unver. Liftronic contended that the bonus was to be calculated based on the net profit of the company, whereas Mr Unver argued that it should be based on the gross profit.

The High Court was required to determine the proper construction of clause 10 of the employment contract. This involved ascertaining whether the term "profit" as used in the clause referred to net profit or gross profit, and considering the implications of this interpretation for the calculation of Mr Unver's bonus entitlement. The court also had to consider whether the Full Federal Court had erred in its interpretation of the clause.

The majority of the High Court, comprising Gleeson CJ, McHugh and Gummow JJ, held that the term "profit" in clause 10, in the absence of any express qualification, should be interpreted in its ordinary commercial sense as net profit. Their Honours reasoned that it was unlikely that an employer would agree to pay a bonus based on gross profit, as this would not reflect the actual profitability of the business after accounting for expenses. Kirby and Callinan JJ dissented, finding that the wording of the clause supported an interpretation based on gross profit. The majority therefore allowed Liftronic's appeal.

The High Court ordered that the appeal be allowed, and the judgment of the Full Federal Court be set aside. The matter was remitted to the Federal Court for determination of the amount of bonus payable to Mr Unver in accordance with the interpretation of clause 10 as net profit.