McRae v Watson Wyatt Australia Pty Ltd

The case of McRae v Watson Wyatt Australia Pty Ltd involved the applicant, Ms McRae, who brought an action against the respondent, Watson Wyatt Australia Pty Ltd, seeking damages for breach of contract and misleading or deceptive conduct under the Trade Practices Act. The dispute arose from Ms McRae's resignation from her position at NSP Buck, following representations made by Mr Dillon of Watson Wyatt regarding a redundancy package, which she subsequently found were not honoured when she commenced employment with the respondent.

The primary legal issues before the court were whether Ms McRae's acceptance of the job offer from Mr Dillon was materially influenced by his representations regarding a severance package, and if these representations could be considered misleading or deceptive conduct under the Trade Practices Act. The court also had to determine whether the representations were vague or imprecise enough to negate reliance on them.

The court found that Ms McRae did rely on Mr Dillon’s representations, which were sufficiently clear to materially affect her decision to resign and join Watson Wyatt. Although Ms McRae was aware of the vagueness of the representations, she had a clear understanding of what she believed they entailed, namely a severance package of at least three weeks per year of service. The court held that the respondent's conduct was misleading or deceptive because Ms McRae relied on the representations when deciding to accept the job offer, even though they were not the sole factor in her decision. The court further held that the vagueness of individual parts of the representation did not negate the overall clarity of the message conveyed by Mr Dillon.

The court ordered the respondent to pay Ms McRae $106,615.38 for breach of contract, $13,903.96 in interest, and reserved the issue of costs for further determination.