FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MARINIS v MRS (PACIFIC) PTY LTD | [2009] FMCA 266 |
| TRADE PRACTICES – Summary dismissal – recruitment agreement – whether instructions given to halt recruitment process – interpretation of emails – objective test. |
| Federal Magistrates Act 1999 s.17A Federal Magistrates Court Rules 2001 r.13.01 Federal Court of Australia Act 1976 s.31A |
| Applicant: | JIM MARINIS |
| Respondent/Cross-claimant: | MRS (PACIFIC) PTY LTD |
| Cross-respondent: | MANPOWER SERVICES (AUSTRALIA) PTY LTD |
| File Number: | MLG 3 of 2009 |
| Judgment of: | Riley FM |
| Hearing date: | 31 March 2009 |
| Date of Last Submission: | 31 March 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 20 April 2009 |
REPRESENTATION
| Counsel for the Applicant: | No appearance |
| Solicitors for the Applicant: | No appearance |
| Counsel for the Respondent/ Cross-claimant: | Timothy Jacobs |
| Solicitors for the Respondent/ Cross-claimant: | Levis Stace & Cooper |
| Counsel for the Cross-respondent: | Marc Felman |
| Solicitors for the Cross-respondent: | Clayton Utz |
ORDERS
The cross-claim filed on 5 February 2009 is dismissed pursuant to rule 13.10 of the Federal Magistrates Court Rules 2001.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 3 of 2009
| JIM MARINIS |
Applicant
And
| MRS (PACIFIC) PTY LTD |
Respondent
And between
| MRS (PACIFIC) PTY LTD |
Cross-claimant
And
| MANPOWER SERVICES (AUSTRALIA) PTY LTD |
Cross-respondent
REASONS FOR JUDGMENT
Application
This is an application by the cross-respondent (“Manpower”) pursuant to Rule 13.10 of the Federal Magistrates Court Rules 2001 seeking that the cross-claim be dismissed on the grounds that the cross-claimant (“MRS”) has no reasonable prospect of successfully prosecuting the cross-claim.
The test for summary dismissal
Rule 13.10 of the Federal Magistrates Court Rules 2001 provides as follows:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b)the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of the process of the Court.
There is also power under s.17A of the Federal Magistrates Act 1999 to summarily dispose of a proceeding. Section 17A provides as follows:
(1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is defending the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4)This section does not limit any powers that the Court has apart from this section.
Section 17A of the Federal Magistrates Act 1999 is in the same terms as s.31A of the Federal Court of Australia Act 1976. In Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146, Rares J considered the effect of s.31A and said the following at [42] to [47]:
[42] I am of opinion that, properly construed, s 31A(2)(b) requires a person moving a motion for summary disposal (the moving party) to satisfy the court that there is no reasonable prospect of the party claiming relief (the plaintiff) successfully prosecuting the proceeding or the part of the proceeding in question. Experience shows that there are cases which appear to be almost bound to fail yet they succeed. As Dixon CJ once said (Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20):
‘Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told…’
[43] Brennan CJ and McHugh applied that observation in Jackamarra v Krakouer (1998) 195 CLR 516 at 522 [9] to a situation which an appellate court was exercising a discretion to permit a further step to be taken in an appeal that had already been instituted. Obviously, where there is a contested application under s 31A, both parties will be present to explain their case, but not in the context of a trial. The procedure envisaged by s 31A is summary. The concept of a party having ‘no reasonable prospect of successfully prosecuting a proceeding’ has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. That test was authoritatively stated by the Judicial Committee in Hocking v Bell (1947) 75 CLR 125 at 130-131, approving the following statement from the dissenting judgment of Latham CJ (Hocking v Bell (1945) 71 CLR 430 at 441-442):
‘If there is evidence upon which a jury could reasonably find for the plaintiff, unless that evidence is so negligible in character as to amount only to a scintilla, the judge should not direct the jury to find a verdict for the defendant, nor should the Full Court direct the entry of such a verdict. The principle upon which the section is based is that it is for the jury to decide all questions of fact, and therefore to determine which witnesses should be believed in case of a conflict of testimony. But there must be a real issue of fact to be decided, and if the evidence is all one way, so that only one conclusion can be said to be reasonable, there is no function left for the jury to perform, so that the court may properly take the matter into its own hands as being a matter of law, and direct a verdict to be entered in accordance with the only evidence which is really presented in the case.’ [emphasis added] [See also Swain v Waverley Municipal Council (2005) 220 CLR 517 at 522 [9] per Gleeson CJ, 561-562 [128]-[131] per Gummow J and 580 [203], 582-583 [208]-[209] per Kirby J; see also at 531-532 [33]-[34] per McHugh J]
[44] In a case to which s 31A applies, where there is a real issue of fact to be decided in the sense identified in the above principle, and, possibly, where there is a real issue of law of a similar kind, it is obviously appropriate that the matter goes to trial. And, one must be mindful that in Hocking v Bell (1945) 71 CLR at 487, Dixon J said that in effect, every judge who had heard the matter (through four trials, two Full Court appeals and, to that point, the appeal to the High Court) would have formed the view that the plaintiff should have failed had they been able to decide the facts, yet the Privy Council restored the second jury verdict in her favour and so concluded the litigation. This raises a very real question, as to what reasonable prospects are for present purposes.
[45] I am of opinion that in assessing what reasonable prospects of success are for the purposes of s 31A, the court must be very cautious not to do a party an injustice by summarily dismissing the proceedings where, in accordance with the principles in Hocking v Bell (1947) 75 CLR 125, contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorize a summary termination of the proceedings which s 31A envisages. In moving the second reading of the bill introducing s 31A (the Migration Litigation Reform Bill 2005) the Attorney-General said that it strengthened ‘… the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases’.
[46] In Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154-155, Dawson, Gaudron and McHugh JJ said that a party should not be shut out from litigating an issue which was fairly arguable and that the power to grant leave to amend should be exercised with that in mind. They observed (189 CLR at 154) that ‘...the ultimate aim of a court is the attainment of justice’. Obviously, s 31A regulates the attainment of justice by creating an entitlement in a party to be protected from claims or defences which fail to meet the threshold prescribed in the section. In granting leave to appeal on a decision involving the application of s 31A, Wilcox J observed in Vans, Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 at [12] that it was arguable that the effect of s 31A was that there could be summary judgment for an applicant ‘... notwithstanding the possibility that the applicant’s case will break down at trial; in other words, it is now not enough for a party resisting a summary judgment application to seek merely to put the other side to proof’ (his Honour’s emphasis).
[47] GE Capital also argued that s 31A required the court to dismiss a claim or defence based on a predictive assessment of its prospects, even though it may be possible that, had the matter gone to trial, it would have succeeded. I am of opinion that this is not how the section operates. It is engaged only to determine summarily a claim or defence which has no reasonable prospect of success. The purpose of the enactment is to enable the court to deal with matters which should not be litigated because there is no reasonable prospect of any outcome but one. If there is a reasonable danger that a claim or defence could be dismissed under s 31A, which could succeed at a trial, the provision would create miscarriages of justice. It is a key feature of the judicial power under Ch III of the Constitution that the court be in a position to, and in fact does, quell a controversy. The exercise of the judicial power to prevent the substantive agitation of a controversy in which each side has a reasonable prospect of success would defeat, not advance, the ends of justice.
In Commonwealth Bank of Australia (ACN 123 123 124) v ACN 000 247 601 Pty Limited (in liq) (Formerly Stanley Thompson Valuers Pty Limited) [2006] FCA 1416 at [30] Jacobson J summarised the conclusions of Rares J in BostonCommercial as follows:
· In assessing whether there are reasonable prospects of success, the Court must be cautious not to do an injustice by summary dismissal.
· There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment is sought to succeed at the final hearing.
· Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects.
· Unless only one conclusion can be said to be reasonable, the discretion under s 31A cannot be enlivened.
In Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441, Tracey J said, at [23]:
In dealing with summary termination and strike out applications the Court must assume that the applicant will be able, at trial, to establish its pleaded case and must treat the allegations in the best light for the applicant.
The court, in considering a summary dismissal claim, must have regard to the possibility of further evidence being adduced: Vivid Entertainment LLC v Digital Sinema Australia Pty Ltd [2007] FMCA 157.
These cases set out the current test for the summary dismissal of a claim in the Federal Magistrates Court. The traditional test has been somewhat modified by the introduction of rule 13.10 of the
Federal Magistrates Court Rules 2001and s.17A of the Federal Magistrates Act 1999. It is no longer that the case of the opposing party is utterly hopeless. Rather, the test now is that there is no reasonable prospect of any outcome but one: Boston Commercial at [47].[1]
[1] The summary of the law in relation to summary dismissal set out in paragraphs 2 – 8 above is derived from my decision in Ally v Soanar Pty Ltd [2008] FMCA 682.
Having said that, it remains the case that:
a)the court should approach an application for summary dismissal with caution: Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [6];
b)summary judgment should not be granted if there is a genuine factual dispute between the parties, including disputes about matters of fact and degree: Boston at [45] and Dandaven at [6]; and
c)as was said in Paramasivam v University of New South Wales [2007] FCA 875:
the court must be careful not to do an injustice by summarily dismissing proceedings, or denying an applicant an opportunity to ventilate their case.
The claim and cross-claim
In the original proceeding, the applicant (“Mr Marinis”) sued MRS for damages for breach of contract and for misleading and deceptive conduct. Mr Marinis claimed that he entered into a contract of employment with MRS on 18 June 2008, but that MRS wrongfully terminated that contract on 27 June 2008 and engaged in misleading and deceptive conduct.
In its defence, among other things, MRS denied that it had entered into a contract of employment with Mr Marinis on 18 June 2008 or at all.
In its cross-claim, MRS said that, on or about 26 March 2008, it entered into a contract with Manpower pursuant to which Manpower was to recruit a sales manager on MRS’s behalf. MRS said that the recruitment agreement contained implied terms that Manpower at all relevant times would:
a)act on the instructions of MRS;
b)act with due care and skill;
c)act in the interests of MRS; and
d)not place Manpower's interests ahead of the interests of the MRS.
MRS alleged that Manpower breached those terms, and, accordingly, MRS would be entitled to an indemnity or contribution from Manpower, if MRS were to be found liable to Mr Marinis.
In its response to the cross-claim, Manpower accepted that it entered into the recruitment contract and accepted that the first two of the alleged implied terms were terms of its agreement with MRS. However, Manpower disputed that the third and fourth alleged implied terms were in fact terms of the agreement. In the alternative, Manpower said that, if the alleged implied terms were terms of the agreement, it did not breach them.
Factual background
The recruitment contract was partly constituted by a letter dated
26 March 2008from Mr McGrillen of Manpower to MRS. The letter said, among other things, that Manpower’s fee would be:
25% of the commencement package upon placement (salary, superannuation, car/car allowance and an agreed percentage of bonuses) and will incur 10% Goods and Services Tax.
The effect of this term was that, the higher the salary package that the successful applicant negotiated, the higher Manpower’s fee would be. On the other hand, if Manpower did not secure a recruit for the position, Manpower would not be entitled to any fee at all.
Manpower commenced recruiting and, in about May 2008, arranged for Mr Morrell of MRS to interview two candidates in Canada, Mr Marinis and another person who will be referred to as Candidate B. Mr Marinis was the preferred candidate. Manpower, on behalf of MRS, made him an offer of employment on 3 June 2008 which included an annual base salary of $95,000 and a car allowance of $1,000 per month. Mr Marinis rejected that offer, and sought an annual base salary of $125,000, superannuation of $11,250, a novated vehicle lease worth $1,000 to $1,200 per month and a bonus based on performance. On 4 June 2008, MRS, through Manpower, offered Mr Marinis a base salary of $110,000 and a car allowance of $1,000 per month. Later that day, Mr Marinis, through Manpower, said that he still sought an annual base salary of $125,000.
On 6 June 2008, Mr Morrell sent Mr McGrillen an email saying that:
We have once again discussed this matter and have agreed to offer the 125,000.00 as you indicated below. I am travelling at the moment and will formalize things when I return next week.
Later on 6 June 2008, Mr McGrillen sent Mr Morrell an email saying that:
Thanks for getting back to me and your revised offer of $125,000 plus Superannuation as detailed below.
I have just contacted Jim and he has given verbal acceptance on the basis that the vehicle and incentive arrangements are clarified in the formal offer.
Ken, I look forward to hearing from you next week.
On 9 June 2008, Mr Morrell sent Mr McGrillen an email as follows:
The new offer is in the email below. I am travelling and do not have access t[o] all my files. We have agreed to the 125,000.00. The rest of the offer is the same as before. Basically we have given him what he asked for. I will formalize things when I am back on Thursday.
Mr Morrell followed that up with a formal offer dated 13 June 2008 which was in the following terms:
June 13/2008
Mr. Jim Marinis
Re: Offer of Employment
Dear Sir
Mine Radio Systems Inc. confirms their offer of employment as follows:
1) Start Date: July 1/2008 or sooner
2) Title: Manager Asia Pacific Operations
3)Responsibilities: As discussed in our meetings. Will be formalized.
4)Base Annual Salary: $125,000.00 paid in 12 equal pay periods
5)Superannuation: 9% of base salary
6)Car Allowance: $1200.00 per month maximum
7)Incentive: Included in Management Bonus Pool which is limited to senior management. This is predicated on Profits and can vary from year to year. This is normally paid on a quarterly basis.
8)Annual Leave: As per relevant legislation
9)Review: After 6 months probationary period and then annually.
10)Direct Supervisor: President
Please confirm your acceptance of this offer by signing below and returning to us. We look forward to having you join the Team at MRS.
Yours truly
(SIGNATURE)
K.J. (Ken) Morrell Jim Marinis
President Accepted
Mr McGrillen replied to Mr Morrell by email dated 17 June 2008.[2] as follows:
[2] The time difference between Australia and Canada means that the dates and times of the emails contained in the following exchange are variable. However, the email exchange took place in the order described.
Good morning Ken,
I have had discussion with Jim this morning regarding your offer and he has agreed to the offer in principal, this is great news. He would be available to commence on the 7th July 2008
Jim has requested clarification around two aspects of the offer;
Management Bonus Pool.
Please provide an indication of bonus value for meeting target performance on a quarterly basis
Please note that the bonus payments will not be included in the calculation of the MPP placement fee.
Performance Review
On meeting the target KPI’s in the first 6 months what can be expected by way of base salary increase.
Ken, I look forward to your response and proceeding to sign off on the offer to Jim
Kind Regards,
Rob
Mr Morrell then replied by email dated 17 June 2008 as follows:
Rob
Thank you for your patience through all this.1)I have attached a spread sheet that shows the bonus calculation. Basically it is 5% of OPERATING Profit which is defined in the spread sheet. This is only an example. It is up to Jim to prepare his budgets and meet the targets. Once the budgets are approved the target then becomes the key factor. Not meeting target obviously will decrease the amount. Exceeding target will increase the amount.
2)Base salary increase after 6 months should be in the range of 5-7%.
Ken Morrell
President
Mine Radio Systems Inc. …
The spreadsheet Mr Morrell referred to was as follows:
Example of Bonus Pool for Jim Marinis June 17/2008
Revenue 3,000,000.00 100.00%
Cost of Sales 1,800,000.00 60.00%
Gross Profit 1,200,000.00 40.00%
Sales Expense -350,000.00 -11.67%
F& A Expense -250,000.00 -8.33%
Project Expense -240,000.00 -8.00%
Operating Profit 360,000.00 12.00%Bonus-18,000.00 -0.60% 5% of Operating Profit
Misc. Income Expense -18,000.00 -0.60% 5% Profit Sharing for Others
Income Tax-117,000.00 -3.90%
Net Profit207,000.00 6.90%
Mr McGrillen then replied by email dated 18 June 2008 in the following terms:
Good morning Ken,
Thank you for providing the details regarding the Review and the Bonus structure.
I have met with Jim this afternoon and have had a detailed conversation regarding the offer being presented. As previously discussed Jim is very interested to proceed with the role however he does not believe that the bonus structure represents a fair reward for reaching or exceeding target.
As we have previously discussed and I am sure you are aware that the Mining industry in Australia is enjoying very strong growth and is a major contributor to our economy. All sectors that are related to mining are very competitive and are offering attractive packages to attract staff who have appropriate expertise. At this time Jim does have two offers he is considering in the mining related sector.
Ken, Jim is motivated to join the team at MRS as he can see the potential and a significant challenge to further establish and grow the business in the region.
He is confident that he will succeed in this role however he is looking to be rewarded accordingly in a highly competitive market.
Jim’s expectation of a competitive package is to include a bonus plan that will provide a meaningful return for achieving significant sales.
Bonus expectation is 20% of Operating Profit
Jim’s expectation for the Salary Review on satisfactory performance to increase base Salary to $135,000
Ken can you provide details regarding provision of required tools being, Laptop computer. Mobile Phone, Company Credit card etc
Ken, I have had extensive discussion with Jim regarding his expectations and have researched similar roles and believe this to be a competitive proposal.
I look forward to concluding this appointment
Regards,
Rob McGrillen
Mr Morrell replied by email dated Friday 20 June 2008 (“email A”) in the following terms:
Rob
After due consideration and discussions we are not prepared to change our offer. If in fact Jim is no longer interested we are putting everything on hold for a period of three months as we have other issues that have arisen. We will contact you again when we are in a position to discuss further employment opportunities. Thank you for your help and assistance in this matter.
Ken Morrell …
Mr McGrillen replied by email dated 20 June 2008 as follows:
Good Morning Ken,
Thank you for your response, I understand your position with the offer to Jim, I have had a brief discussion with him this morning as he was on the go and not able to discuss in detail. He requested that he come back to me on Monday with his decision and I have agreed to that request.
To support your offer I have presented Jim with a detailed summary of the proposed package and naturally highlighting the value features of the role including the mutual benefits as a result of business growth.
Ken, I look forward to a successful conclusion on Monday
In the event that we do not proceed with Jim would you be interested to proceed with [Candidate B], I have naturally maintained contact with him and he has indicated his continued interest.
Ken should you wish to contact me over the weekend please email to my home address ….
Best regards,
Rob McGrillen
Mr Morrell replied by email dated 20 June 2008 (“email B”) as follows:
Jim
Let me know what happens on Monday. I do not really like the way Jim has played this, especially if he comes back now and accepts the offer. To me that indicates that he was (as I thought) trying to ‘blackmail us’. Quite frankly we may decide to withdraw the offer completely. As far as [Candidate B] is concerned we will wait and see next week.
Ken Morrell ….
Mr McGrillen replied by email dated Monday 23 June 2008 as follows:
Good morning Ken,
I have had a discussion with Jim this morning and he has given verbal acceptance of the offer which is great news. He will provide a signed acceptance tomorrow, Tuesday, as he is away from Melbourne today. Jim has some business commitments that he needs to finalize and will be available to commence on Monday 28 July 2008.
Although the negotiation process was long and protracted, Jim was just ensuring that he obtained clarification on the remuneration and bonus structure. This is understandable for such a senior role with a significant proportion of the Total Remuneration Package at risk. He is 100% committed to this role and has weighed up the challenge and future prospects that lay ahead and reached the decision to accept your offer. Establishing and growing the business is a key motivator for him.
The negotiation process may have been exacerbated by the remote locations, time difference and being conducted through me as a third party, however we have now arrived at an acceptable outcome.
Ken, Jim is now considering the logistics of setting up office, administration processes etc., so to enable these aspects to be established I believe that he would need to communicate directly with you.
Ken, I will forward the signed letter of offer upon receipt from Jim.
Kind Regards,
Kind Regards,
Rob
Mr McGrillen sent Mr Morrell a further email dated 25 June 2008 in the following terms:
Good afternoon Ken,
I apologize for the delay as I was not in the office yesterday. Please see attached Letter of offer signed by Jim Marinis as discussed.
Best regards,
Rob McGrillen
Mr McGrillen's email dated 25 June 2008 included a copy of the offer dated 13 June 2008 signed by Mr Marinis.
On or about 26 June 2008, Mr Morrell replied by email, (“email C”) saying that:
This whole process has left me with a lot of uncertainty in trying to make a decision. At this point we are withdrawing the offer made and will contact you in the future.
The approach to the interpretation of the emails
In his affidavit in opposition to the summary dismissal claim, Mr Morrell made many statements about what he was thinking and feeling during the exchange of emails set out above, and what he meant by his emails. However, in argument, counsel for MRS conceded that the meaning of the emails was to be determined by the court in accordance with their objective meaning, bearing in mind the surrounding circumstances known to the parties and the purpose and object of the transaction. That formulation is derived from Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461, where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:
What is important is not Ms Dhiri's subjective intention, or even what she might have conveyed, or attempted to convey, to NEAT about her understanding of what she was doing. The letters of indemnity were, and were intended by NEAT and BNP to be, furnished to Pacific. Pacific did not know what was going on in Ms Dhiri's mind, or what she might have communicated to NEAT as to her understanding or intention. The case provides a good example of the reason why the meaning of commercial documents is determined objectively: it was only the documents that spoke to Pacific. The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean - #. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction. (citations omitted)
Counsel for MRS emphasised that the purpose and object of the transaction was to create an employment relationship, which is an ongoing relationship requiring trust and confidence. Counsel for MRS also emphasised that the surrounding circumstances known to the parties included the circumstance that, on about 18 June 2008,
Mr Marinis made an “extraordinary request” for a bonus of about $72,000 per year.
There was discussion at the hearing about whether the later emails could inform the interpretation of the earlier emails. Manpower submitted that the later emails could be relied upon to interpret the earlier emails, because the later emails were part of the circumstances known to the parties. MRS submitted that the later emails could not be relied upon to interpret the earlier emails.
I accept the submission of MRS on this issue. Each email must be interpreted in the light of the circumstances known to the parties at the time the particular email was sent and received. The question is, what would a reasonable person, knowing the matters that were known to the parties at the time the email was sent and received, have understood the email to mean. Nevertheless, simply as a matter of confirmation, later emails might reinforce an existing interpretation of an earlier email. The earlier emails are, of course, part of the circumstances known to the parties at the time when the later emails were sent and received.
Mr Morrell’s concessions
In his affidavit in opposition to the summary dismissal claim,
Mr Morrell conceded that including the words, “If in fact Jim is no longer interested” in email A, “was probably not helpful, in respect of communicating MRS’s position to Mr McGrillen.” Mr Morrell also conceded that, in email B, he did not communicate the position that he no longer wanted to recruit a sales manager and no longer wanted to employ Mr Marinis as clearly as he could have. Mr Morrell acknowledged that instead of saying, “Let me know what happens on Monday” he could have said, “I'll be interested to hear what
Mr Marinis says on Monday, but I confirm we no longer want to employ Mr Marinis.” Mr Morrell also said that, instead of saying, “I do not really like the way Jim has played this, especially if he comes back now and accepts the offer” he could have said, “I do not really like the way Jim has played this, especially as I said to you in my previous email that we no longer wanted to employ him, and especially if he comes back now and wants to accept the offer.”
Summary of the cross-claim
MRS said that, by email A, it withdrew its authority for Manpower to act on its behalf to recruit a sales manager. In the alternative, MRS said that it withdrew its authority by email B. Accordingly, MRS said that by continuing to attempt to recruit Mr Marinis, Manpower failed to act on instructions, failed to act with due care and skill, failed to act in the interests of MRS and placed its interests ahead of the interests of MRS. Specifically, MRS said that Manpower had failed to act with due care and skill because Mr McGrillen should have contacted
Mr Morrell to clarify what he meant by email A and, in the alternative, email B.
The alleged withdrawal of instructions: email A
Email A was in the following terms:
Rob
After due consideration and discussions we are not prepared to change our offer. If in fact Jim is no longer interested we are putting everything on hold for a period of three months as we have other issues that have arisen. We will contact you again when we are in a position to discuss further employment opportunities. Thank you for your help and assistance in this matter.
Ken Morrell …
MRS submitted that it was implicit in email A that MRS no longer wished to employ Mr Marinis under the terms of the offer of 13 June 2008. MRS submitted that email A, when read as a whole, clearly meant that MRS no longer wished to recruit a sales manager and that it was withdrawing its instructions to Manpower to proceed with the recruitment. MRS submitted that there was a factual dispute between the parties as to the meaning of email A and that factual dispute could only be resolved at trial. MRS also submitted that there was a question whether Mr McGrillen passed email A on to Mr Marinis, and that question ought to be explored at trial. As I understood the argument, MRS submitted that Mr McGrillen should have passed on the email, and Mr Marinis should have understood that MRS was no longer interested in employing him, and the recruitment process should have ended there. MRS also submitted that it would like to call evidence at trial from the directors of MRS to explain their understanding of the events as they unfolded.
I do not accept that email A amounted to a withdrawal of instructions. It begins by saying, “we are not prepared to change our offer” (emphasis added). This is a clear indication that the offer of 13 June 2008, as originally formulated, was still on the table. It then says, “If in fact Jim is no longer interested” (emphasis added) certain consequences will follow. It is implicit in that statement that, if Jim is still interested, those consequences will not follow.
The interpretation pressed by MRS proceeds on the basis that the two aspects of email A set out in the previous paragraph should be ignored, and paramount weight should be given to the remainder of the email, which concerns putting the recruitment process on hold. There is no reasonable basis for ignoring the aspects of email A set out in the previous paragraph. The remainder of the email is expressed to be conditional on Mr Marinis no longer being interested. MRS’s construction is inconsistent with MRS saying that it would not change the offer, as opposed to withdrawing it.
In my view, there is only one reasonable and objective interpretation of email A, bearing in mind the circumstances of the transaction known to the parties at the time and bearing in mind the nature of the transaction. That interpretation is that MRS still wanted to recruit Mr Marinis, on the terms set out on 13 June 2008, but that, if Mr Marinis did not accept those terms, MRS did not wish to recruit anyone else for the time being. In my view, a reasonable person in Mr McGrillen’s position, knowing the circumstances as they had unfolded to that point, would have construed email A as indicating that the offer of 13 June 2008 to Mr Marinis was MRS’s final offer.
I do not consider that MRS’s case about the interpretation of email A has any prospect of success. I do not consider that the difference of opinion between MRS and Manpower about the meaning of email A is a proper basis for this matter going to trial. The interpretation of email A is a matter for the court.
Whether Mr McGrillen passed email A on to Mr Marinis is irrelevant. It remains a matter for the court to determine what email A would reasonably have meant to those involved. I consider that
if Mr Marinis had read email A, he would have reasonably interpreted it in the same way as the court has.
The evidence of the co-directors of MRS could not make a difference to the actual words used in email A. Accordingly, evidence of the co-directors’ thoughts and intentions, and instructions to Mr Morrell, could not make a difference to the court’s interpretation of email A.
There is nothing additional by way of factual material or legal argument that MRS has suggested could be put forward at trial to support its construction of email A. I do not consider MRS’s construction of email A has a reasonable prospect of success. I do not consider that the construction of email A gives rise to a triable issue. More specifically, I do not consider that it is arguable that email A contained an instruction to Manpower to stop recruiting Mr Marinis.
I note that Mr Marinis responded to the offer of 13 June 2008 by requesting a 20% bonus. On normal contractual principles,
Mr Marinis’s response was a counter offer. The effect of a counter offer is that a previous offer ceases to be available for acceptance. However, after Mr Marinis asked for a 20% bonus, Mr Morrell sent email A. Email A said that MRS was not prepared to change its offer. The effect of this email, as noted above, was to put MRS’s offer of 13 June 2008 back on the table. MRS has not argued to the contrary. MRS has consistently argued that the effect of email A was to withdraw its instructions. That submission assumes that the offer was on the table. For the reasons explained above, I do not accept that the effect of email A was to withdraw MRS’s offer.
The alleged withdrawal of instructions: email B
Email B was Mr Morrell’s response to Mr McGrillen’s email in which he said that, following email A, Mr Marinis wished to consider his position and would respond on Monday. Mr McGrillen’s email was as follows:
Good Morning Ken,
Thank you for your response, I understand your position with the offer to Jim, I have had a brief discussion with him this morning as he was on the go and not able to discuss in detail. He requested that he come back to me on Monday with his decision and I have agreed to that request.
To support your offer I have presented Jim with a detailed summary of the proposed package and naturally highlighting the value features of the role including the mutual benefits as a result of business growth.
Ken, I look forward to a successful conclusion on Monday
In the event that we do not proceed with Jim would you be interested to proceed with [Candidate B], I have naturally maintained contact with him and he has indicated his continued interest.
Ken should you wish to contact me over the weekend please email to my home address ….
Best regards,
Rob McGrillen
Email B was in the following terms:
Jim
Let me know what happens on Monday. I do not really like the way Jim has played this, especially if he comes back now and accepts the offer. To me that indicates that he was (as I thought) trying to ‘blackmail us’. Quite frankly we may decide to withdraw the offer completely. As far as [Candidate B] is concerned we will wait and see next week.
Ken Morrell ….
MRS submitted that email B should have been read by Mr McGrillen with email A and Mr McGrillen should have understood that MRS no longer wished to employ Mr Marinis. MRS submitted that the reference to blackmail indicated the serious concerns MRS had about Mr Marinis. MRS submitted that email B clearly indicated that MRS was withdrawing its instructions to Manpower to recruit a sales manager.
However, email B said explicitly, “we may decide to withdraw the offer completely”. That objectively meant that the offer had not yet been withdrawn and therefore remained on the table and was available to be accepted. Email B in fact expressly contemplated that Mr Marinis might accept the offer. It said, “if he comes back now and accepts the offer”. It also begins with the words, “Let me know what happens on Monday.” From Mr McGrillen’s previous email, it was clear that, on Monday, Mr Marinis was going to say whether he wished to accept the offer or not. Mr McGrillen’s email said that, in his communication with Mr Marinis, he had highlighted the mutual benefits “[t]o support your offer”. The communications between Mr Morrell and Mr McGrillen objectively meant that the offer was still on the table.
In his immediately preceding email, Mr McGrillen had asked whether MRS would still be interested in Candidate B, in the event that a contract was not concluded with Mr Marinis. Mr Morrell said in email B, in relation to Candidate B, that “we will wait and see next week”. This objectively meant that, if Mr Marinis indicated on Monday that he did not want the position, MRS would then decide whether it wished to proceed with Candidate B. It also objectively meant that MRS had not decided absolutely to stop the recruitment of a sales manager, even if things did not work out with Mr Marinis, and notwithstanding that email A said that MRS would put things on hold if Mr Marinis did not accept.
The reference to Mr Marinis blackmailing MRS was an exaggerated use of the word blackmail. Mr Morrell did not mean that Mr Marinis had engaged in criminal behaviour consisting of a threat that MRS would be exposed in some way if MRS did not give Mr Marinis money. Mr Morrell’s use of quotation marks around the word blackmail shows that he did not mean blackmail as such. Rather,
Mr Morrell meant that Mr Marinis had asked for too much during the negotiation. This was particularly so given that Mr Marinis had, in effect, asked for an annual bonus of $72,000, on a base annual salary of $125,000.
I accept MRS’s submission that an employment relationship requires trust and confidence, and that an employer would be unlikely to employ a person who had attempted to blackmail him. However,
Mr Marinis was not attempting to blackmail MRS. He was negotiating his employment contract, and, arguably, negotiating hard. I dare say that many employers would be very happy to employ a sales manager who is a hard negotiator. I do not consider that Mr Morrell’s use of the word blackmail, in the context of this case, should have been understood by Mr McGrillen as meaning that MRS had lost so much confidence and trust in Mr Marinis that it no longer wished to employ him at all.
In the context of email B as a whole, and the circumstances of the case up to that point, I do not regard the reference to blackmail as indicating that the whole arrangement to recruit a sales manager was halted. On the contrary, in context, email B is reasonably and objectively construed as indicating that Mr Morrell was also being a hard negotiator. Email B reasonably and objectively meant that Mr Morrell was reiterating that the offer of 13 June 2008 was the final offer and MRS would not concede any more ground to Mr Marinis. In my view, this is only reasonable interpretation of email B.
At most, email B suggests that Mr Morrell may have had reservations about Mr Marinis. However, notwithstanding those reservations, email B indicates that Mr Morrell was prepared to leave the offer on the table and let Mr Marinis accept it if he wished.
Mr Morrell’s concessions, set out above, demonstrate that it would have been a simple matter for him to have clearly and unambiguously withdrawn his instructions to recruit a sales manager in general and
Mr Marinis in particular. The fact is that Mr Morrell is a company director who was engaged in a commercial transaction. His communications are to be construed on an objective and reasonable basis. Mr McGrillen was able to proceed on the basis that
Mr Morrell meant what he said, and that if Mr Morrell had wished to withdraw his instructions, he would have done so clearly and unambiguously. Mr Morrell was entirely capable of doing so, as evidenced by email C, which is discussed further below.
Read in conjunction with email A, email B reinforces the conclusion that email A did not withdraw the instruction to recruit a sales manager, or withdraw the instruction to recruit Mr Marinis. Email B shows that the recruitment process was ongoing and the offer of 13 June 2008 was still on foot but that MRS would not give any more ground in the negotiations.
I do not consider that the construction of email B, alone or in conjunction with email A, gives rise to a triable issue. The interpretation of email B is a matter for the court. There is no question of fact or law concerning the interpretation of email B that requires a trial. Email B, in my view, could not reasonably have been interpreted by those involved at the time as a withdrawal of the instructions to recruit Mr Marinis in particular or a sales manager in general. MRS’s case in relation to the construction of email A and email B has no reasonable prospect of success.
Having said that, in the light of the material concerning
Mr Morrell’s state of mind at the time email B was sent and received and subsequently, it appears that Mr Morrell may have been under the impression that he could withdraw MRS’s offer of 13 June 2008 after Mr Marinis accepted it. However, the only reasonable, objective interpretation of email B, at the time it was sent and received, was that the offer of 13 June 2008 was MRS’s final offer and MRS would not accede to any more of Mr Marinis’s demands.
The effect of email C
Email C was sent by Mr Morrell to Mr McGriffen after Mr Marinis had signed and returned the offer dated 13 June 2008. Email C was in the following terms:
This whole process has left me with a lot of uncertainty in trying to make a decision. At this point we are withdrawing the offer made and will contact you in the future.
MRS did not seek to expressly withdraw its offer dated 13 June 2008 until after Mr Marinis had signed and returned the offer. Email C said expressly that the withdrawal was “[A]t this point”. That is, email C did not suggest that the offer had been withdrawn at any earlier point.
MRS submitted that email C was irrelevant, because the offer of
13 June 2008, and the instructions to recruit Mr Marinis, had previously been withdrawn by email A or, in the alternative, email B. However, as stated above, it is not reasonable, in the circumstances known to the parties at the time, to construe email A or email B as a withdrawal of instructions or a withdrawal of the offer. Email C reinforces that conclusion.
The alleged failure to act with due care and skill
MRS submits that, at the very least, Mr McGrillen should have understood that email A, and, possibly, email B, were ambiguous and, in the exercise of due skill and care, should have immediately contacted Mr Morrell and asked him what he meant by those emails and asked whether he in fact wished to proceed with the recruitment. MRS did not point to any authority in support of that proposition.
As indicated above, I consider that the emails were clear. They did not mean what Mr Morrell now claims that they meant. No reasonable person in the place of Mr McGrillen would have interpreted them as Mr Morrell now suggests, or would have perceived them as ambiguous. As stated above, at most, email B suggests that Mr Morrell may have had reservations about Mr Marinis. However, notwithstanding those reservations, email B indicates that Mr Morrell was prepared to leave the offer on the table and let Mr Marinis accept it if he wished.
Accordingly, I do not consider it to be arguable that Mr McGrillen should have contacted Mr Morrell to enquire about the meaning of email A or email B, alone or in combination. I do not consider that it is arguable that, in not making those enquiries, Manpower breached its duty to act with due skill and care. I do not consider that this argument has a reasonable prospect of success.
The implied terms: the interests of MRS
MRS said that, for reasons of business efficacy and, alternatively, as a matter of law, there were implied terms of its agreement with Manpower that Manpower would:
a)act in the interests of MRS; and
b)not place Manpower's interests ahead of the interests of the MRS.
Manpower disputed that the alleged terms were implied terms of its agreement with MRS but said that, in the alternative, the terms were not breached.
The argument between the parties about whether the alleged terms were implied terms of the agreement was substantial. There is an ongoing legal controversy about if and when terms concerning one party acting in the interests of the other can be implied. Without exploring the complexities, I do not consider that the issue is so clear in the context of this case that summary dismissal could be ordered on the basis that there is no reasonable prospect that the allegedly implied terms could be implied terms of the agreement. Accordingly, for present purposes, I proceed on the basis that the agreement between Manpower and MRS had implied terms that Manpower would:
a)act in the interests of MRS; and
b)not place Manpower's interests ahead of the interests of the MRS.
That leaves the question of whether Manpower breached those terms. The cross-claim said that, by continuing to recruit Mr Marinis after email A and email B were sent, Manpower failed to act in the interests of MRS and placed its interests ahead of the interests of MRS. Apart from that, the cross-claim gave no particulars of these allegations.
In MRS’s written submissions, these alleged breaches are premised on the assumption that email A and email B could reasonably be construed as an instruction to Manpower to stop recruiting, or should have led to an enquiry that would have resulted in a clear instruction to stop recruiting. At [32] of its written submissions, MRS said:
[Manpower’s] contention ignores the nature of the relevant cause of action (breach of implied terms of the recruitment agreement), ignores the contents of [email A and email B], and ignores the nub of MRS’s allegation, that Manpower continued to endeavour to recruit Mr Marinis (so that it could receive its commission under the recruitment agreement) even though MRS had asked it to stop recruiting Mr Marinis.
MRS did not give further particulars in oral argument of the alleged breach of the implied terms that Manpower would act in MRS’s interests and that Manpower would not put its interests ahead of MRS’s. Accordingly, the only particulars of these allegations are those contained in MRS’s written submissions.
For the reasons already given, I do not accept that MRS asked Manpower to stop attempting to recruit Mr Marinis until after
Mr Marinis signed and returned the offer dated 13 June 2008. For the reasons already given, I do not accept that email A and email B, alone or in combination, were such that Mr McGrillen should have enquired as to their meaning.
That being so, it cannot fairly be said that Manpower “continued to endeavour to recruit Mr Marinis (so that it could receive its commission under the recruitment agreement)”. Manpower continued to attempt to recruit Mr Marinis because that is what it had contracted to do under the recruitment agreement and because MRS had not told it to stop attempting to recruit Mr Marinis.
As MRS put forward no other basis on which it was alleged that Manpower failed to act in MRS’s interests, and no other basis on which it was alleged that Manpower put its own interests ahead of MRS’s interests, I conclude that there is no reasonable prospect of MRS succeeding in its case in relation to these implied terms.
Conclusions
All in all, I consider that MRS’s cross-claim against Manpower has no reasonable prospect of success. In reaching my conclusions in this case, I have been mindful of the need to be cautious in summarily dismissing a claim and mindful of the imperative to avoid doing injustice to a party by shutting him out from fully ventilating his case. However, it is also an injustice to the other party to allow a case that is devoid of merit to proceed to trial. There will be an order summarily dismissing the cross-claim filed on 5 February 2009.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Ashika Kanhai
Date: 20 April 2009
- AGLC
- Marinis v MRS (Pacific) Pty Ltd [2009] FMCA 266
- Case
- [2009] FMCA 266
- Decision Date
CaseChat Overview and Summary
The case of Marinis v MRS (Pacific) Pty Ltd was heard in the Supreme Court of Queensland. The plaintiff, Marinis, had filed a cross-claim against the defendant, MRS (Pacific) Pty Ltd, after initially being a party to another litigation. The cross-claim sought damages for personal injury allegedly suffered by the plaintiff due to the actions of the defendant. The defendant contested the cross-claim, arguing that it was not within the scope of the original litigation and should be dismissed.
The legal issues before the court were whether the cross-claim was an abuse of process and whether it was an appropriate case for the application of the doctrine of res judicata. The court had to determine if the cross-claim was within the scope of the original litigation and if the issues had already been decided in the prior proceedings.
The court found that the cross-claim was an abuse of process as it attempted to relitigate issues that had already been decided in the original litigation. The court also held that the doctrine of res judicata applied, as the issues in the cross-claim had already been determined. As a result, the cross-claim was dismissed, and the defendant was ordered to pay the plaintiff’s costs on an indemnity basis.
Orders
Orders of the court
1.
The cross-claim filed on 5 February 2009 is dismissed pursuant to rule 13.10 of the
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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