McGee v Sanders (No 2)

[1991] FCA 554

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(IVDGMENT No. . ........ . ..l ..-... L

THE FEDERAL COURT OF AUSTRAL	IA )	l
-1A	DISTRICT REGISTRY	1
JJDUSTRIAL DIVISION	)	No. TI '2 of 1990

BETWEEN: KENNET N ROACH

Applicant

AND: HY -ELECTR SION

19 SEP 1991

Respondent

AUSTRALIA PRINCIPAL

-rm

JUDGE MAKING ORDER% PINCUS J.

OF ORDER:  15 MAY 1991

WHERE:	HOBART
m COURT ORDERS THAT:

1.    The application to amend be allowed.

2.    Further particulars be given of paragraphs 8 and 10 by 29 May 1991.

3.    Defence be filed and served by 5 June 1991.

4.    Discovery be by list and verified by affidavit by 19 June 1991.

5 .     Inspection be by 26 June 1991.

KX€E:	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

6.    The matter be listed for further directions at 9.30 a.m. on Tuesday, 16 July 1991.

7.    Costs of today be costs in the proceedings.

m COURT DIRECTS THAT:

8.    The parties may approach the Registrar to vary the date for directions.

a THE FEDERAL COURT OF AUSTRALIA 1

-1A DISTRICT REGISTRY 1 '

INDUSTRIAL DIVISION 1 No. TI 2 of 1990

BETWEEN: KENNETH JOHN ROACY

Applicant

AND :  HYDRO-ELECTRIC COMMISSION

Respondent

a:  PINCUS J.

PLBI;E: HOBART

15 MAY 1991

$X TEMPORE REASONS FOR JUDGMENT

This is an application to amend a statement of claim which was made by an interlocutory application filed on 10 May 1991. The principal proceedings seek to challenge the legality of the dismissal of the applicant. The matter came before Morling J. in March this year, producing reasons for judgment which set out the nature of the proceedings sufficiently, and I do not find it necessary to repeat what his Honour said. Those reasona are dated 18 April 1991.

The first point to notice about Morling J.'s

reasons is that the clause governing dismissal under the award set out on p.8 was sought to be affected by an implied term, with which his Honour dealt at pp.8 and 9. The substance of what was then put up was that the applicant was entitled to mount a case that the right of aumary dismissal mentioned in

clause 23 was cut down or otherwise affected by a course of
dealing by the employer. His Honour said this:

"On behalf of the applicant, Mrs Mills submitted that the alleged implied term would not be inconsistent with the award because it did no more than clarify the circumstances in which a dismiseal could occur. In effect, she submitted that the effect of the term being implied would be to require the words of the last sentence in c1.23 of the award to be interpreted as meaning that the Hydro-Electric Comnission may only terminate a contract of employment 'for conduct justifying instant dismissal' where to do so would not be harsh, unjust and unreasonable. According to the argument, an employeere conduct may, prima facie, justify instant dismissal, but it will not do so if the dismissal would be harsh, unjust or unreasonable. I do not think this argument is tenable. Notwithstanding lira Mills' careful argument, I do not think it is possible to escape from the conclusion that the alleged implied term would be inconsistent with the terms of c1.23 of the award.

Accordingly, I think the allegation in para. 8 of the amended statement of claim cannot be sustained and accordingly the paragraph should be struck out.

During the course of argument I raised for consideration the question whether a course of dealing between an employer and an employee could give rise to a contract of employment the	terms of which differ from those contained in
an award binding on the parties, i.e. a private
contract outside an award: cf poletti v m (1989) 91 ALR 381. I doubt whether the applicant could maintain a claim along these lines but the order which I make striking out para. 8 will not preclude the applicant from further amending the statement of claim so as to make such a claim, if so advised".

Were it not for the last sentence it might, as it seems to me, have been arguable that, although not raising an estoppel, Morling J.'s reasons on the interlocutory point precluded such

an attempt as is currently being made; howbver, I accept - indeed it was not suggested otherwise - that the intended

scope of his Honour's ruling was precisely as he defined it to be and that Morling J.'s decision does not in itself preclude the present attempt. Nevertheless, I take into account as a matter of discretion against the applicant that a ~omewhat

similar attempt has been made and has failed. As I have mentioned, it does not seem to be poseible to treat it as raising an estoppel against the applicant's present claim to amend.

The present claim to amend is along the lines, I suppose, which were foreshadowed in the reasons. That is, it sets up an implied term of the same kind, but on the basis of past conduct of the employer. For example, it is said that the employer used speak with employees and discuss alleged misconduct before proceeding to terminate: that other sanctions had been considered such as downgrading or warning, and indeed that in circumstances of this kind the respondent had not terminated. The view which I take of the clause, as

true intention is that the reference to instant dismissal in	I have mentioned during the course of argumetlt, is that its
clause 23 takes its meaning from the general law. The latter law is sufficiently stated for present purposes in Halsburv'~

of Enoland, 4th ed., volume 16, paragraph 640:

"An employer has a conunon law right to dismiss his employee without notice on the grounds of the employee's serious misconduct".

The author of this part of Halsbury goes on to give examples such as disobedience to instructions, misconduct, neglect, incompetency, and conduct incompatible with duty or prejudicial to the employer's business. In the absence of any plea of an implied term, it seems to me that in considering the common law position, the Court may very well in any event have regard to the course of business. For example, if a

place of business is very strictly run and the employees ordinarily are expected to behave in a certain way, a subetantial departure from the ordinary mode of conduct may be regarded as more serious than in less formal places of

bueiness . To put it more generally, I find it difficult to

see how some matters at least going to the course of conduct

in the Commission's premises could be entirely excluded, plea

or no plea.

The argument which was put by Mrs. Mills was, I think, along these lines: that at least the present intended paragraph 8 should not be regarded as inconsistent with what clause 23 says, because it does not deny the right of the	employer instantly to dismiss in appropriate circumstances.	But clause 23 does not define those circumstances and leaves
them to the general law.
The next proposition is that what the general law would regard as justifying instant dismissal may depend upon practice, and it clearly can be affected by agreemente between the parties implied from their conduct. Morling J. seemed to

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suggest in his reasons that if a pleading in this form were put forward it might not have a considerable chance of success. I make no comment upon that other than to say that it would not be astonishing if the pleading in fact got the applicant nowhere.

However, having listened carefully to the able argument put forward on behalf of the Commission, I have been unable to convince myself that the proposed clause 8 falls into that narrow category of cases in which the applicant's prospects seem, on the face of them, so dismal as to deny him the chance of advancing the case at all. I have taken into account in favour of the respondent the fact that this is the second case about this dismissal; the fact that it is now pretty old; the fact that it is, as it seems to me, very late to be raising this sort of case. But nevertheless, I cannot attain the state of satisfaction which one, I think, should attain, namely that what is sought to be set up is virtually hopeless, and I propose to allow the amendment. It

which I have come to, not only by the high standard which one	is repetitive to say so, but I am influenced in the decision
must attain to exclude a case from even being pleaded, but also by the circumstance that as it seems to me, plea or no plea, on the face of clause 23 itself, the undefined circumstances justifying instant dismissal may depend upon evidence concerning the nature of the business, the way it is run and the system of discipline which operates.

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The proposed paragraph 10 raises a similar point under a different heading. It was suggested in argument that the heading was inappropriate because estoppel of this sort, a promissory estoppel, can be only a shield and not a sword. At least in a case of this sort that doctrine seems to have not survived the decision of the High Court in Waltons Storeg JInterstate) Ltd. v. Maher (1988) 76 A.L.R. 513, especially

at p.521. At that page, Mason C. J.and Wilson J. remarked:

"Even according to traditional orthodoxy, a
plaintiff may rely on an estoppel if he has an
independent cause of action, where in the words
of Denning L. J. . . . the estoppel 'may be part
of a cause of action, but not a cause of action
in itself' ".

That was a case, of course, in which an action of contract was founded upon what could at least loosely be called a contract by estoppel.

It was also urged by counsel for the Commission that the plea should not be allowed because there was no sufficient	allegation of detriment. It seemed to me that that was
sufficiently answered during the course of argument by pointing out that the pleading does say that, in reliance on the representations, the applicant continued his employment.
It is at least arguable that that would be sufficient - that
is, giving up the opportunity of doing something other than working for the respondent may be sufficient. Another question, however, which has troubled me about paragraph 10 is

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whether or not what is alleged is sufficiently precise. The law is, I suppose, well known, but to give a reference, Falsburv's Laws of Enoland, 4th ed., volume 16 at paragraph 1595, deals with the necessity for clarity and lack of ambiguity in representations which may found estoppel. It seems to me to be not quite so easy to apply that doctrine to the modern sort of estoppel, that is, a promissory estoppel. It was, I thought, argued that a promise to act fairly, justly and reasonably is too broad to found an estoppel. However, particularly in view of the fact that this was not, I think, a criticism of paragraph 10, I am in the end not satisfied that the matter is insufficiently arguable to let it be pleaded.

It will be ordered that the amendments will be allowed and it will be ordered that further particulars be given in paragraphs 8 and 10 by 29 May. The defence must be given by 5 June. I have deliberately ordered the defence to be delivered irrespective of satisfaction or otherwise with the particulars because that is the general position in this	Court. Discovery by list, verified by affidavit by 19 June:	inspection by 26 June and at that stage, it seems to me, the
matter might be looked at again, in a directions hearing. I will list the matter for further directions at 9.30 a.m. on Tuesday, 16 July 1991. I propose to make the costs of today costs in the proceedings. I should add that if the date turns out not to suit, I direct that the parties may approach the Registrar to vary that date; that is if, for example, matters get behind or it turns out to be inconvenient.

I certify that this and the

seven preceding pages are a true copy of the reaeons for judgment herein of his Honour Mr. Justice Pincus.

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