Mayne Nickless Ltd v Karin E Gibson No. SCGRG 95/2730 Judgment No. 5739 Number of Pages 20 Contract
[1996] SASC 5739
•9 August 1996
COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA DOYLE CJ(2), BOLLEN(1) AND NYLAND(3) JJ
CWDS
Contract - creation of contract or no - intention of parties - promise by employer to provide redundancy with its benefits if employee carried out an onerous extra task - questions of credibility of parties and witnesses. Yuill v Yuill (1945) P.15; Jones v National Coal Board (1957) 2 QB 55 at 63-4; Galea v Galea 19 NSWLR 263 at 280-281; Devries v ANR (1993) 177 CLR 472, considered.
HRNG ADELAIDE, 3-4 July 1996 #DATE 9:8:1996 #ADD 17:9:1996
Counsel for appellant: Mr P Heywood-Smith
Solicitors for appellant: Mouldens
Counsel for respondent: Mr T Mcrae
Solicitors for respondent: Johnston Withers
ORDER
Appeal dismissed.
JUDGE1 BOLLEN J This is an appeal which, in my opinion, boils down to one issue. But I must write much before coming to that issue.
2. The action is one seeking damages for breach of contract. An issue of estoppel is raised as an alternative cause of action. Of course, there is no cause of action in estoppel. I will speak about estoppel again later.
3. The learned trial judge made an accurate summary of the case. He wrote:
"The plaintiff, a former paymistress of a company, Skyroad
Express, a totally owned subsidiary of the defendant, claims
damages from the defendant alleging that it was agreed that
if she carried out her duties to enable pay records to be
transferred to the Sydney office, she would then be made
redundant and, entitled to be compensated in accord with the
terms of her employment.
The defendant has denied this alleged agreement and pleaded
that alternate work was available, and, therefore it was not
under any obligation to make payment of any moneys to the
plaintiff.
PLEADINGS
The plaintiff alleged that during 1993 she had discussions
with a Mr Keegan, an executive officer of the company,
concerning a possible merger of Skyroad Express and another
totally owned subsidiary, Wards Express, and the proposed
transfer of all relevant pay records to the Sydney office.
The plaintiff said she was not prepared to transfer to
Sydney and Mr Keegan then said to her that if she would
arrange for the transfer of all records over a period to the
Sydney office she would be made redundant in terms of what
was provided in the relevant employer/employee manual. The
plaintiff proceeded on this basis and the transition of pay
files to Sydney and, at her suggestion, her assistant in
Adelaide transferred to Sydney and took up the national
payroll position in Sydney, the files were, over a period of
many months, transferred to Sydney.
The plaintiff alleged that the fact of her proposed
redundancy was confirmed by the general manager. The
plaintiff alleged that at the time of her farewell she was
advised by Mr Keegan that redundancy was not an option as
the defendant could not afford to lose her expertise, and,
an alternate position was being provided for her within the
company. The plaintiff refused this offer and left the
defendant's employ.
Consequently, the plaintiff has alleged by reason of those
representations made to her in 1993, and her subsequent
actions flowing from the representation of Mr Keegan, that
there was a contractual basis for the payment of redundancy
entitlements, or alternatively, by reason of the above
factual matters, the defendant is estopped from denying her
redundancy benefits.
The defendant in a very detailed defence has denied that
there was any redundancy arrangement as alleged by the
plaintiff and consequently the only obligation on the
defendant was to place the plaintiff in alternate employment
which was at all times open to her and the company was under
no liability to make any redundancy payments. The defendant
denied all other aspects of the relief as claimed by the
plaintiff.
EVIDENCE
The plaintiff gave evidence and as well called a Ms Russell,
a former employee and credit officer of the defendant, and
subpoenaed a number of persons from the present Adelaide
office of the defendant company.
The defendant called Mr Keegan, who the plaintiff alleged
was at the centre of the negotiations, his superior, Mr
Sadler, and other officers of the defendant company,
including Ms Nixey, the employee who was transferred from
Adelaide to Sydney and took charge of the national payroll
activities.
The plaintiff gave short evidence in rebuttal."His Honour
went on to discuss the witnesses and the evidence of each.
It must be remembered that the respondent, as plaintiff, was
seeking to set up the existence of an oral contract with her
employer. A special contract, not just the ordinary
contract of service. Senior officers of her employer denied
that any such contract was ever made. Much depended on the
view which the learned trial judge took of the credibility
of witnesses, especially that of the respondent and each of
those "senior officers".
It will be seen that in the summary he referred to the
evidence of some witnesses. The summary begins with two
paragraphs and proceeds under the headings "Pleadings" and
"Evidence".
4. His Honour then wrote of the respondent and her evidence under the heading of "Plaintiff's Evidence". He wrote:
"PLAINTIFF'S EVIDENCE
The plaintiff is now 49. She was first employed by Skyroad
Express in May 1983 as a paymistress and subsequently the
term changed to payroll administrator. Skyroad Express was
a transport service of Mayne Nickless Limited and dealt with
parcel delivery between all States of Australia and,
perhaps, overseas. The national office of that company was
in Adelaide. At the time there were about 80 people
employed in the office and, indeed, throughout Australia the
employees totalled in the region of 1,300 to 1,400 people.
The plaintiff said she was in charge of payroll for all
employees and was so employed in this capacity until
approximately March 1993.
The plaintiff outlined that her background had been in
accounting and, in particular, she specialised in payroll
activities. Before her employment with Skyroad Express she
had, in fact, been in charge of payroll activities at two
large institutions. By February 1992 the administration
manager of Skyroad Express was Mr Keegan. One has to bear
in mind that at this time the defendant, Mayne Nickless
Limited, also had another transport arm which traded under
the name of Wards Express. From the documents, both
companies showed the details of their transport services,
although both had different executive officers and premises.
The plaintiff said that she accounted to the financial
accountant of the group, but in day to day matters
concerning industrial relations and similar problems she
sought advice and was responsible to the national
administration manager, Mr Keegan.
She said in February 1992 she was requested by Mr Keegan to
attend Sydney to audit the payroll of Wards Express. At
this time Mr Keegan was an officer of Skyroad Express. She
felt that Wards Express was what she called a 'sister
activity' of Skyroad Express and, in any event, she had free
access to the Wards Express payroll. Apparently at that
time they had amalgamated with another company by the name
of Jetlink. There were apparently some initial difficulties
with payroll and she was asked to make recommendations and
examine the payroll registers, which she did and she found
one Stephanie Allen, a payroll person then involved, a
capable person. She felt her activities at Wards Express
lasted about three to four days.
She outlined how Mr Keegan had requested her advice on the
employee, Miss Allen, and she advised that she was competent
and well able to attend to the payroll. She was then
advised that Miss Allen had requested a high sum for her
remuneration which he regarded as excessive. The position
was in charge of the combined payrolls of Skyroad Express
and Wards Express.
She said within a few days Mr Keegan phoned her and put to
her a proposition that she move to Sydney and she said that
she felt sunned by this as when she applied for the job it
was known that her specific view was that because of family
commitments she would in no way contemplate leaving South
Australia. She was requested to discuss it with her
husband, but, she said she was adamant that she would not
contemplate moving to Sydney.
She said at that time Mr Keegan said to her in the strictest
of confidence that he believed there would be a merger
between the companies Skyroad Express and Wards Express.
The plaintiff said she was aware of the basis of redundancy
entitlements and obligations of Mayne Nickless as she had
copies of the manual which set out the relevant
calculations.
The plaintiff said that the person who was second in charge
to her in the payroll section was Ms Gail Nixey and she had
occupied this position for about 8 years. She said she
advised Mr Keegan that she was not prepared to transfer to
Sydney, but would accept a redundancy package. She said
that Mr Keegan advised her that he would speak to Mr Sadler,
who was his immediate principal, about her redundancy. She
said she advised Mr Keegan that she believed Gail Nixey was
a competent person and would be able to take over the role
of national payroll administrator.
She said subsequently Mr Keegan told her that he had
discussed her situation with Mr Sadler with the view of a
full redundancy, and, providing that Gail accepted the
position in Sydney, and if she oversaw the transition of all
payroll files to Sydney, there would not be a problem with
her redundancy.
The plaintiff said that after this conversation she herself
phoned Mr Rob Sadler. She said she specifically put to him
that Kevin had told her that if Gail went across -
'"... as long as I stay available to help you out, you've
got no problem with giving me a full redundancy and I just
want to run this past you so I know where I stand" and Rob
said "Yes that's quite right, no problem at all. But just
make sure that you stay in charge of it all, that you
oversee it all, until such time as everything is okay" and
he also said, "We'll be really sorry to lose your
expertise."'
The plaintiff said that these conversations occurred in
March or April 1993.
She said she believed that on any issue of redundancy
Mr Sadler as general manager would have to be involved.
The plaintiff then outlined how in August 1993 the merger
did occur between the entities, Wards Express and Skyroad
Express. She had not discussed this with any person,
bearing in mind the confidentiality of her discussions with
Mr Keegan.
Mr Keegan then became national administration manager of the
combined entity and Mr Sadler the general manager.
After the merger a meeting took place in Adelaide and was
addressed by Mr Keegan. She said Mr Keegan also requested
that she prepare figures on what she considered to be the
details of what she felt would be involuntary and voluntary
redundancies including her own and she gave the same to Mr
Keegan.
The plaintiff outlined that she was aware there was a
corporate affairs manual of the defendant, Mayne Nickless,
in the Adelaide office, but it was never in her possession.
She had taken extracts from that book of her specialised
areas. She was aware of the basis of calculation for a
redundancy package.
A folder was tendered, Exhibit P1, which contained agreed
documentation and correspondence between the parties under
some 46 heads and it does contain extracts from the
employment manual. The plaintiff said that after the
companies had merged Mr Keegan again returned to Adelaide in
the Christmas period of 1993 and spoke to staff and
particularly pointed out that every effort would be made to
avoid redundancies. She said she remembered particularly
mentioning to Mr Keegan, at this time, that she appreciated
that was the company position but that did not in fact apply
to her and he replied that, 'yes that was fine'.
She had prepared a list of employees on a last on first off
basis, including the longest employed and least employed and
had worked out redundancy figures. Mr Keegan told her that
these details should be at all times kept in her possession
and not left in her office. She said that she in fact had
taken those details home with her and never left them in her
office.
The plaintiff said that there was much concern amongst
employees about future employment and she was asked many
questions about the basis of redundancies, and, eventually
she decided that the best course would be to refer these
people to Mr Keegan and she advised him of her position and
he accepted her view.
Mrs Gibson confirmed that in the early part of 1994 she was
pre-occupied with the transferring of all relevant pay
records and files to Sydney, that is completed files, but
was still running the South Australian payrolls. Clearly,
it was apparent that the national pay office would be in
Sydney. During this time she repeatedly kept in touch with
Mr Keegan.
She outlined in this time she did recall a problem with a
young lady called Lina Florida who was the secretary to the
then administration manager and when she returned from
holidays she found that another person had taken over her
duties and there was no job available for her. The
plaintiff discussed this with Mr Keegan and he confirmed
that there had been a problem with her re-employment in her
former position. At the time she said she mentioned to him
about a redundancy for Lina and he specifically said there
were then to be no redundancies, but he advised again, when
she enquired about her position, that hers was different and
that hers was the 'only one'.
Following this she again spoke to Mr Sadler and he told her
not to worry, but to engage herself with the transferring of
the payroll duties.
The plaintiff said in early 1994 there was a suggestion that
a tax increase would be levied on redundancies and she
immediately rang Mr Keegan to enquire if she could be paid
out before 30 June and again advised him about completing
her duties in July. She said he advised her he would
consider her position and subsequently phoned her and said
that prepayment was not open and was not available.
The plaintiff recalled a further conversation which took
place in the office kitchen. It was about this time that
the position of branch manager was advertised and she
mentioned to him that he was not going to try to 'run this
one past me now' and Mr Keegan said 'no' and told her to
stop saying those sorts of things. She said there was a
discussion about her finishing her duties and he asked her
to let him know so that he could make arrangements to attend
her farewell.
She said she continued her duties and on about 25 July,
1994, advised she would be packing up the last box in that
week and she did not really want to be farewelled in jeans
as it was rather dirty work and she felt that by the
Thursday her duties would be completed.
She said a week or so before that time she did her
superannuation calculations which she sent to Gail Nixey,
the national payroll administrator, as well as to Mr Keegan.
By this time in early July the Sydney office was doing all
payrolls. She said she advised Gail by telephone that she
had sent the calculations in Rob Sadler's overnight bag.
She recalled that on the Monday, 25 July, she received a
large bouquet of flowers from other branches and other
offices and felt that on Thursday, 28 July, Kevin Keegan
would be attending on that date. When she attended work on
the Wednesday, during that day she met Mr Keegan in the
kitchen.
She asked why he was present on that day and he intimated
that he would like to see her in the boardroom. They went
to the boardroom. She said he looked 'edgy' and she began
to sense that something was wrong. He then advised her:
'Karin there won't be a redundancy. There'll be no cheque.
In the last fortnight we've found a job for you, there won't
be a redundancy, we have found you something else.'
She said she was quite amazed by this and apologised for the
strong language which she regretted. She said he just kept
looking at the table and repeating 'there won't be a
redundancy'. She said she stood up and said:
'"I don't believe this. I cannot believe that you've done
this" and he stood up and he said, "Don't you even want to
know what the other job is?" and I said, "No, I don't".',
and she left. She then endeavoured to ring Mr Sadler. He
eventually returned her call and she advised him that she
had been advised there was no redundancy. He simply said
'what Kevin's told you is right'. She subsequently sought
legal advice.
She outlined the following day she had some health problems
and despite a number of letters, which appear in the
documents, she has not returned to work."
5. His Honour then referred to evidence of witnesses called by the respondent. I refer to his summary of the evidence of Ms Christina Russell. Between 1988 and 1993 Ms Russell worked in Adelaide as national credit manager for Skyroad Express. Let me jump ahead to say that His Honour found Ms Russell to be "impressive" and "genuine in expression". He had "little doubt" in accepting the totality of her evidence.
6. The appellant called witnesses. In particular it called two men, one named Sadler and the other Keegan. Each gave evidence denying the happening of conversations capable of producing an oral contract. Their evidence was in sharp contradiction to that of the respondent and, to a lesser extent, to that of Mrs Russell. Sadler said that Skyroad and Wards Express (each owned by the appellant) merged in August 1993. At that time he was general manager of Wards Express.
7. Before the merger Keegan was national administration manager of Wards Express. The learned trial judge said of Keegan's evidence (amongst other comments):
"Mr Keegan denied any of the conversations as deposed by the
plaintiff concerning the plaintiff's transfer to Sydney.
Mr Keegan also denied the conversations as deposed by
Ms Russell. He eventually conceded that the decision to
transfer the payroll from Adelaide to Sydney was made
probably in September or October 1993 and at that point he
agreed that the plaintiff's job was at risk. Apart from
denying the relevant conversations as deposed by the
plaintiff he also denied for instance that he had asked her
to prepare lists of employees showing those of longest and
least service."
8. I must quote another long passage from the reasons of the learned trial judge. Under the heading "Credit", he writes not only of credibility but stating his findings. His Honour wrote:
"CREDIT
The plaintiff was a very impressive witness. She clearly
had extremely good skills in attending to her duties as the
national payroll administrator of the company, Skyroad
Express. Indeed, all the witnesses from the executive staff
of the defendant confirmed her very capable abilities.
One here is faced with her evidence which is in direct
contrast with the executive employees of the defendant
company.
The plaintiff in her evidence was very direct. Her memory
recall was very good.
I have reservations about Mr Keegan's evidence of the
relevant conversations. Some of Mr Keegan's rather dogged
exertions cause concern. One has to bear in mind that both
Mr Sadler and Mr Keegan were senior executives of initially
the company Wards Express and then with the merger they were
responsible for a work force of something like 1,400 people
and obviously were preoccupied with the running of that
company in the best interest of the company. Mr Keegan's
explanation of his 11 July memorandum is not convincing.
The only person in this case who is totally independent with
nothing to gain in any way in this litigation is that of the
defendant's former employee, Ms Russell. She was an
impressive witness and most genuine in expression and was no
doubt doing her best to accurately recall all matters. I
have little doubt in accepting the totality of her evidence.
She is a competent person being the former national credit
manager with many people under her control and supervision.
On her evidence I would make the finding:
1. That after the merger there were a number of discussions
between her and Mr Keegan as to the future running of the
Adelaide office.
2. That on or about the time of that merger the decision had
been made that the payroll function would be transferred to
Sydney.
3. That at the time Mr Keegan in those discussions intimated
to Ms Russell that the plaintiff would be redundant and it
was unlikely that a similar role could be found for her and
she would be 'one of the lucky ones who gets a payout'.
Indeed, this was the tenor of a number of conversations
between Ms Russell and Mr Keegan.
4. Ms Russell had transferred in her employment from
Adelaide to Sydney in June 1992 and one of the reasons for
her moving was, in her words, 'at that time (ie June 1992)
there was a general consensus that it was just a matter of
time before a merge between Wards and Skyroad' and, indeed,
she had discussed that fact with Mr Keegan. If she remained
in Adelaide she may well in time have been made redundant,
hence her move to Sydney.
Having accepted that evidence it immediately places a cloud
over the evidence of the defendant's executive officers,
particularly Mr Keegan, who was perhaps more dogmatic than
the others, that in 1992 the anticipated merger was not an
item of conversation. It makes obvious sense that a large
company totally owning two subsidiaries dealing in the same
product, canvassing the same client base as outlined by the
now general manager, Mr Sadler, that these activities would
merge as, in fact, they did in August 1993, particularly as
it was mentioned that 'Wards Express' was not 'travelling
well'. For Mr Keegan endeavouring to maintain that there
was not a scrap of discussion along those lines is, with
respect to him, plainly ridiculous. It causes me to have
reservations about the manner of his evidence particularly
the final stance he took with the plaintiff in July 1994.
Clearly there were discussions in April with Ms Feehan about
finding some alternate position. It may well be that
Mr Keegan felt for personal reasons the plaintiff would
accept an alternate position. In the management of such a
large company it is easy to overlook what at the time may
well be his representations and discussions on what he may
have viewed as minimal matters of employment with the
plaintiff, and, at the time because of the nature of his
ongoing responsibilities those discussions had become
somewhat clouded and eventually he simply maintained the
strict company line.
The point has been made that at the relevant time the
plaintiff was an employee of Skyroad Express and Mr Keegan
and Mr Sadler were at Wards Express. However, it is
important to note that both were totally owned subsidiaries
of the defendant. The fact is that 'merger' was a frequent
topic as supported by Ms Russell's move to Sydney, Mr Keegan
asking the plaintiff to examine Wards' payroll and the move
of Ms Nixey to Sydney, prompted by Mr Keegan and then,
perhaps not surprisingly, Mr Sadler and Mr Keegan taking the
executive positions in the newly merged entity. It would be
my view that Mr Keegan had sufficient authority to involve
himself in the dealings with the plaintiff.
I have already mentioned the unsatisfactory nature of his
explanation of the memorandum of 11 July, 1994, when he
talked of the plaintiff being 'retrenched by 31st July 1994
unless a payroll or administrative position is found'. If
one accepts his evidence that an administrative position had
already been found, it seems a most unusual memorandum and
then added to that the fact that the job was not filled
until October of this year.
One does have reservations as to whether there was any
finality in the creation of the job in July 1994 and,
indeed, not one discussion with the plaintiff. There had
been no discussion with Mr Keegan about this new position
before June. The eventual admission by Mr Sadler of the
circumstances surrounding this memorandum at page 232 of his
evidence does not assist Mr Keegan.
As I mentioned, the plaintiff was an impressive witness. I
do not believe there is any fabrication or exaggeration of
her evidence. The very nature of her job is one requiring
detail and this was the nature of her evidence. I have no
hesitation in preferring her evidence to that of Mr Keegan
and that her specific recall of conversations is accurate.
I find Ms Feehan's evidence on the reasons for the delay in
appointing a state credit manager not convincing.
Mr Keegan's own evidence of placing before the plaintiff for
the first time in July details of alternate employment seems
most unusual. She had been a loyal competent employee and
at that time he knew she had raised the issue of redundancy
and it was foremost in her mind. He may well have viewed it
as the only option open to the plaintiff.
On the other hand, as I mentioned, the plaintiff is an
extremely able person and not one to have any uncertainty in
her dealings, and, indeed, that is her nature. She
forwarded calculations of her redundancy package. She
proceeded to substantially alter her financial position by
embarking on the purchase of a car, and, indeed, no doubt by
her discussions had advised the staff of her departure. She
did all this on the assurances of both Mr Keegan and
Mr Sadler that when her tasks were completed she would be
retrenched.
Counsel for the defendant has, in his very competent
address, pointed out inconsistencies which would support the
defendant's allegations. There will always be some areas of
inconsistency, but those matters do not cause me any
concern.
Consequently, by reason of that, I accept the evidence of
the plaintiff and the following findings:
1. In February 1992, Mr Keegan contacted the plaintiff and
requested she attend Sydney for the purpose of an audit of
the payroll of Wards Express and, in fact, she did carry out
this and made obviously a report to Mr Keegan.
2. In March 1993, Mr Keegan raised with the plaintiff the
possibility of an employee of Wards Express, Stephanie
Allen, as being a person who could undertake national
payroll duties and was subsequently advised that Miss Allen
was not prepared to do so unless her salary was increased,
which was rejected by Mr Keegan.
3. At the time he sounded out the plaintiff in regard to the
possibility of her going to Sydney to continue her national
payroll duties, which she declined, and, the plaintiff
recommended her second in charge, Gail Nixey, as a person
who could, with adequate training, become the national
payroll administrator.
4. By this time one can see the activities of Skyroad
Express and Wards Express leading to a merger with this type
of planning occurring.
5. In this conversation the plaintiff discussed with
Mr Keegan that in time her duties in Adelaide would become
redundant with the transferring of the national payroll to
Sydney and, on that question, Mr Keegan said he would
discuss that with Mr Sadler, the general manager.
6. Subsequently there was a further telephone conversation
with Mr Keegan who intimated to her that he could not see
any problem with her redundancy as long as Ms Nixey accepted
the position of payroll administrator in Sydney and the
plaintiff oversaw the transfer of all files and records to
Sydney.
7. The plaintiff, subsequent to this conversation, discussed
these points and confirmed this conversation with Mr Sadler
who intimated that was the situation.
8. The plaintiff thereafter continued with her normal duties
and commenced the transfer of employee files to Sydney.
9. The plaintiff completed the transfer of payroll records,
and prepared and forwarded her redundancy details which
probably Mr Keegan placed on her file. Mr Keegan, despite
making it known to all staff members that the company was
making every effort to avoid any redundancies after the
merger, said sufficient to the plaintiff that entitled her
to expect as previously agreed her redundancy benefits.
10. All employees were aware that the plaintiff was
finishing her employment, but she was advised by Mr Keegan
on 27 July, 1994, that the company was not prepared to
proceed with its full redundancy package for her and she
immediately left the employ of the company."
9. I said that I would return to "estoppel". His Honour wrote:
"CAUSE OF ACTION
The plaintiff has pleaded two causes of action. Firstly,
contractual, and secondly, that the defendant, by reason of
its conduct to her, is now estopped from denying that she is
entitled to her redundancy package in accord with its
employee's manual.
CONTRACT
After the redundancy conversation with Mr Keegan and
confirmed by Mr Sadler, the plaintiff embarked on her side
of her employer's request by continuing until the
finalisation of the payrolls and arranging in an efficient
manner for the files to be transferred to Sydney.
Accepting, as I do, her evidence mutual promises can be seen
from the bargain. She carried out her employer's request.
Her subsequent acts in anticipation of her redundancy by the
purchase of a car and also her visit to Bosnia confirm her
anticipation of the redundancy.
The promise of the employer was to pay her out on a
redundancy basis in accord with the employee manual. The
employer at the time of her completion of her duties refused
the redundancy and is consequently in breach.
ESTOPPEL
I would also view the defendant as being estopped from
denying the plaintiff the relief sought."
10. Under "Estoppel" His Honour wrote more which I need not recite.
11. Of course the appellant is not estopped from denying entitlement to a redundancy package. If estoppel operates at all it operates to forbid denying the promise to provide such a package. But if there be a contract to provide it estoppel does not matter. If there be no contractual promise then there can be no contract. So estoppel could not operate. Estoppel cannot create something which has no existence at all. I think that this case is contract or nothing.
12. His Honour went on to deal with damages. He found the respondent entitled to damages in the sum of $36,541.
13. The appellant appeals. The grounds of appeal and the orders sought are:
"1. The Learned Trial Judge was wrong in finding that the
Appellant did in or about March 1993 contract with the
Respondent to pay to her a redundancy payment, such finding
being against the evidence and the weight of the evidence.
2. The Learned Trial Judge erred in adopting a view as to
the credit of the Respondent prior to the hearing of the
whole of the evidence.
3. In the event it was appropriate for the Learned Trial
Judge to find that the Appellant had promised to the
Respondent a redundancy payment:
3.1 The Learned Trial Judge should have found that such
promise was not supported by any consideration and in the
premises gave rise to no contractual rights and obligations.
3.2 The Learned Trial Judge should have found that such
promise was not relied upon by the Respondent to her
detriment so as to found a cause of action in estoppel.
4. The Learned Trial Judge erred in law in finding that the
sum of $10,868.00 by way of additional superannuation
payout, constituted portion of the damages suffered by the
Respondent consequent upon the Appellant's breach of
contract.
AND THE APPELLANT SEEKS THE FOLLOWING ORDERS ON THE APPEAL:
1. That the Appeal be allowed.
2. That the Respondent's claim against the Appellant do
stand dismissed and that Judgment be entered for the
Appellant.
3. Alternatively, in the event that the Appellant succeeds
in respect of ground three of the appeal herein, that
Judgment in favour of the Respondent be reduced to the
extent of $10,868.00."
14. Mr Heywood-Smith, for the appellant, told us that he abandoned Ground 3.1 ie abandoned the plea that the promise (if it existed) was not supported by consideration. We cannot pass on the abandoned issue of estoppel. He did not abandon Ground 3.2 but I ignore estoppel for the reasons given earlier.
15. Mr Heywood-Smith argued the other grounds. Mr McRae, for the respondent, supported the findings, reasoning and decision of the learned trial judge.
16. Mr Heywood-Smith attacked the conduct of the learned trial judge in his hearing of the action. Under the heading Grounds 1 and 2 of his Outline he wrote:
"1. Ground 1
The Appellant contends that the decision by the trial judge
that a contract came into existence in March 1993 is against
the evidence and the weight of the evidence. Further, that
decision was 'glaringly improbable': Devries v ANR (1993)
177 CLR 472. The Appellant will seek to demonstrate that
the trial judge has either failed to understand the issues
associated with the case or has acted from a determination
to simply disregard those issues. In his judgment the trial
judge does not attempt to answer the questions raised over
the alleged conduct of senior executives of the Appellant.
It will be necessary for counsel to go into the evidence in
some detail. To assist in this exercise there is filed
separately herewith a document headed Appellant's Summary of
Evidence. Attached to this Outline are documents indicating
the hierarchy within the two relevant companies Skyroad
Express and Wards Express.
2. Ground 1 of the Notice of Appeal also raises issues as to
whether a contract could have arisen even on the
Respondent's case. Did the Respondent purport to contract
with anybody (to her knowledge) having the authority to bind
the Appellant? Further, is the 'agreement' which the
Respondent asserts too vague to constitute a binding
agreement and in any event could the actions of the parties
as alleged by the Respondent give rise to an intention to
create legal relations.
3. Ground 2
Ground 2 of the Notice of Appeal raises questions over the
approach taken by the trial judge to the hearing of the
case. It is suggested that the trial judge has allowed
himself to fall into error in both appreciation of the
issues involved and understanding of the evidence before him
by reason of the fact that he allowed himself to form a view
as to the credit of the Respondent prior to hearing the
Defendant's witnesses. The Appellant will refer the Full
Court to the following authorities on the appropriate
conduct of trial judges:
Yuill v Yuill (1945) P.15
Jones v National Coal Board (1957) 2 QB 55 at 63-4
Galea v Galea (1990) 19 NSWLR 263, 280-281."
17. I reject these attacks. I have examined the transcript and attended to the arguments of Mr Heywood-Smith. I can find no fault in the approach of the learned trial judge in his hearing of the matter nor in his attention to, and consideration of, all issues.
18. I say no more then than that the conduct of the case survives Mr Heywood-Smith's attack.
19. Nor were the issues (or the issue) very difficult. No doubt it may not have been easy to determine the facts in the light of conflicting and opposing evidence. That is often so. This was a case dependent on oral testimony to prove or disprove the existence of a contractual promise and breach. The proponent of existence and breach succeeded. That is to say the respondent and "her witnesses" (especially Ms Russell) gave evidence which was accepted. Keegan, Sadler and "their witnesses" gave evidence which was not accepted. There can be no legitimate complaint at this result.
20. The learned trial judge was alive to all issues and to each aspect of all issues. He wrote:
"Counsel for the defendant has, in his very competent
address, pointed out inconsistencies which would support the
defendant's allegations. There will always be some areas of
inconsistency, but those matters do not cause me any
concern." (I am conscious of repeating this but intended
it.)
21. This was sound. Mr Heywood-Smith, in another very competent address to us, stressed inconsistencies and oddities. They were matters which may have moved the learned trial judge had he been of a different mind.
22. I hark back to my quoting of part of the Outline of Mr Heywood-Smith. Under Ground 1 it will be seen that he refers to Devries v ANR (1993) 177 CLR
472 (a compulsory reference nowadays). In my opinion, the submissions in that part of the Outline are not sound. There is no glaring improbability in the decision. Nor in any of the accepted evidence. Indeed it would have been an improbable story to have been invented by the respondent. Nor can I think that she was likely to have made a mistake. She was truthful or not. He who saw and heard her came to the unassailable conclusion that she had been truthful.
23. In the course of his able and interesting address Mr McRae proffered an outline. In paragraph A he correctly wrote:
"A Facts and Credit
1 The Trial Judge's findings of fact were open to him on the
evidence in the light of his finding as to credit.
2 In particular the Trial Judge found that Kevin Keegan,
national administration manager of Wards and then
Wards/Skyroads, offered the respondent a full redundancy
package on condition that she oversee the transfer of the
payroll files and records to Sydney.
This offer was confirmed by Robert Sadler, general manager
of Wards and later of Wards/Skyroads.
The offer was accepted by the respondent and acted on."
24. And:
"5 The Trial Judge preferred the respondent's evidence in
relation to the agreement which she said had been reached.
He did so on appropriate grounds and there is no basis on
which the finding of credit ought to be disturbed.
6 Corroboration for the respondent's version of events is to
be found in the evidence of Christina Russell - a witness on
good terms with both the respondent and Kevin Keegan.
Ms Russell said that Keegan told her that the respondent
would have a redundancy, that her job would be redundant and
that it was highly unlikely that a position would be found
for her in a similar role and therefore she would be one of
the lucky ones who gets a payout.
She said that she had discussions along those lines with
Kevin Keegan more than once."
25. I accept those submissions.
26. I said early, long ago now, that the case boils down to one point. That point is - did the parties intend to make a contract? Did they in their respective positions mean, and mean on each side, to create a binding arrangement? (see paragraph 2 of Ground 1 of the Outline of Mr Heywood-Smith (supra)). Alternatively, it could be seen as the varying of the contract of service.
27. The respondent was employed by a subsidiary of the appellant. She was "in" a contract of service. The service required of her was to do what really was part of her work anyway. But not wholly so. The movement of books, records and files was seen to be very important by all sides. There were "hundreds and hundreds of files" (words of the respondent). The work was beyond the scope of the ordinary work of the respondent. It was work created by the merger. It was special. The promise was that if the respondent arranged the transfer she would be made redundant (and of course get the resulting money). The respondent acted on that promise. She played her part in the bargain. And bargain I say it was. No doubt it is a little surprising to think of a promise emerging from those discussions. But I think it did. I think it was a contractual promise. At the time of the relevant discussions each side (one acting through Keegan) intended to be bound by the promise of one to "provide redundancy". The other carried out a promise to do the special work of moving files, records and books to Sydney. I hold that the learned trial judge was correct in finding the existence of a contract as alleged and, of course, in finding the breach. As I have said, it could have been an intention to vary.
28. Let me hark back to the evidence of the respondent about the discussion in the boardroom, between Keegan and her. That all "reads" as the remarks of a man knowing that he was breaking an agreement and seeking to substitute something other than that promised.
29. There was discussion at bar about the amount of damages. The learned trial judge assessed in these words:
"HEADS OF DAMAGE
1. The plaintiff had calculated her redundancy in accord
with the relevant provisions of the employee manual that,
bearing in mind her years of service, was $26,790. There is
no suggestion that she has erred in this calculation. The
plaintiff conceded in her evidence this amount is subject to
a deduction of $4,117, thus the balance amount under this
head is $22,673.
2. The plaintiff claimed that she should have been entitled
to a superannuation payout of $46,670, but at the time of
her leaving, she only received $35,802. The letter from the
superannuation fund, dated 7 October, 1994, to the plaintiff
sets out the position, but, I am now uncertain how the
amount pleaded of $35,802 was calculated. That letter does
set out the financial basis of benefit from the fund 'which
you would have been entitled had you been made redundant on
27th July 1994 amounted to $46,670'. I find that the
defendant is responsible for the loss of $10,868.
3. The plaintiff sought further damages by reason of loss
suffered following her decision to purchase a motor car
relying on the redundancy moneys, interest on those moneys,
as well a further sum to recoup moneys she expended on an
overseas trip that she would not have undertaken had she not
received her redundancy moneys. I believe these heads of
claim are too remote and cannot be recovered.
4. The plaintiff is entitled to interest on the moneys that
she should have received at the time of termination. It
approximates a 16 month period. I propose to allow a lump
figure of $3,000 for interest.
Consequently, I enter judgment for the plaintiff in the sum
of $36,541."
30. Mr Heywood-Smith wrote in his Outline (and spoke to it) thus:
"6. Ground 4
The sum of $10,868 could only have been claimed from the
trustee of the Mayne Nickless Limited superannuation fund.
That trustee is M N L Superannuation Fund Pty Ltd. The
money would only be payable upon an application to the
trustee and the trustee being satisfied of a 'bona fide
retrenchment'. The trustee acts within certain discretions
in determining whether to accept or reject such a claim.
The Respondent could not be placed in a stronger position
than she would have been in had the contract been performed.
If performed, it would still have been necessary for the
Respondent to make application to the trustee and to satisfy
the requirement of bona fide redundancy."
31. But this misconceives the position. The award is an award of damages against the parent company of the employer of the respondent. The existence of a superannuation fund is not relevant in the issue of identity of company liable to pay. The appellant promised to provide redundancy (putting it loosely). It is required to pay what the appellant would have received had she received what was promised. She is entitled to receive that from the appellant. No doubt, the amount of length of service and so on may be worked out from the provisions of the superannuation scheme. But that does not mean that any part of the damages can be claimed only from the trustee of the fund. It is the defendant which must pay money. The money has been calculated by the learned trial judge. Mr McRae explained the second head of damage at my request thus:
"Your Honour Bollen J asked me to deal with the second head
of damage, that is at p.583, p.21 of his Honour's judgment.
The rationale behind that claim was that Mrs Gibson claimed
the difference between what she would have received by way
of superannuation had she been treated as redundant and what
she in fact received and the basis for that claim is the
letter from Mayne Nickless Limited superannuation fund, at
p.494.
You will see that letter contrasts the sum of $33,070 which
they say was the normal leaving benefit to which she was
entitled. Redundant on the same day and the figures they
give are $33,070. The fund paid Mrs Gibson slightly more.
They paid her $35,802.03. The calculation was $46,670 being
the redundancy superannuation less $35,802.03 actually
received. Leaving a figure of $10,867.97, which is rounded
off to $10,868 and pleaded accordingly."
32. I accept these submissions.
33. I would dismiss the appeal.
JUDGE2 DOYLE CJ I agree that the appeal in this matter should be dismissed. In the light of the appellant's abandonment of the ground of appeal which challenged the judge's finding that there was consideration to support the promise which he found had been made, the case becomes essentially a factual one.
2. I agree generally with the reasons given by Bollen J for declining to disturb the trial judge's findings of fact. I agree also with what he has said on other issues.
3. In my opinion, the appeal should be dismissed.
JUDGE3 NYLAND J I agree that the appeal should be dismissed for the reasons given by Bollen J. I have nothing to add.
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