Newton v Australian Postal Corporation (No 2)
[2019] FCA 2192
•23 December 2019
FEDERAL COURT OF AUSTRALIA
Newton v Australian Postal Corporation (No 2) [2019] FCA 2192
File number: VID 876 of 2017 Judge: BROMBERG J Date of judgment: 23 December 2019 Catchwords: INDUSTRIAL LAW – Fair Work Act 2009 (Cth) (“FW Act”), ss 340, 348 and 355 – where in reliance upon s 348 union representative alleged to have made threats to take action against employer with intent to coerce employer to engage in industrial activity, being removal of employee from position and cessation of a project (“project”) – where in reliance upon s 355 union representative also alleged to have made threats to take action against employer with intent to coerce employer not to allocate employee duties of his position – where employee removed from his position and duties by his employer and project cancelled – discussion as to what constitutes a “threat” for purposes of ss 348 and 355 of FW Act – discussion of meaning of “intent to coerce” in ss 348 and 355 – discussion of 361(1) of FW Act: presumption that action taken for a particular reason or intent unless proven otherwise – to which elements or ingredients of a cause of action under ss 348 and 355 is s 361(1) applicable – the pre-conditions to the engagement of s 361(1) – whether s 361(1) can apply to a threat – discussion of standard of proof necessary for contravention of FW Act – whether pleading admissions made by one party can be used against another party in a joint trial – whether threats, as alleged, made by union representative – whether applicant engaged s 361(1) by making requisite allegation regarding union representative’s intent – whether threat made with intent to coerce – discussion of pleadings deficiencies – whether applicant discharged his onus to establish use of unlawful, illegitimate or unconscionable means by union representative – whether employer and manager accessorily liable under s 550 of FW Act – adverse action – FW Act s 340: where alleged that employee removed from position for reasons that include that employee had a workplace right – applicable legal principles discussed – whether adverse actions (removal of employee from his position and exclusion of employee from work) taken including because of employee’s workplace right to a safe working environment
CONTRACTS – where employee contracted to be employed in specific position – where contract provided that employer may require employee to occupy alternative “suitable” position – where removed from contracted position – whether employer removing employee from contracted position without placing employee into a suitable alternative position was a breach of contract – discussion of meaning of suitable alternative position – whether suitable alternative position offered to employee – where direction that employee excluded from work pending medical clearance – whether direction in breach of contract
DAMAGES – contractual claim: principles regarding damages for breach of contract – principles of causation – whether loss should be characterised as a loss of chance or loss of bargain – whether loss of remuneration claimed flowed from breach of contract found – whether intervening events broke chain of causation – principles of remoteness – whether “least burdensome principle” invoked by employer’s contractual capacity to terminate contract on giving notice – discussion of contingencies – whether employer would have terminated contract by giving notice had it not been for breach – discussion of principles of mitigation – whether employee’s attempts to gain employment following termination involved a failure to mitigate loss – whether failure to accept position from former employer was a failure to mitigate loss – whether employee entitled to general damages
Legislation: Evidence Act 1995 (Cth), ss 83, 140(2)(c)
Fair Work Act 2009 (Cth), ss 12, 340(1), 342, 343, 347, 348, 550, 355, 361, 363, 550, 793
Work Health and Safety Act 2011 (Cth), s 19, s 28
Cases cited: Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310
Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Bay Street Case) (2018) 260 FCR 564
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Quest Apartments Case) [2017] FCA 1398
Australian Building and Construction Commissioner v Hall [2017] FCA 274
Australian Building and Construction Commissioner v Hall (2018) 261 FCR 347
Australian Building and Construction Commissioner v McDermott (No 2) [2018] FCA 1611
Australian Building and Construction Commissioner v Molina (No 2) [2019] FCA 1014
Australian Building and Construction Commissioner v O’Connor (No 3) [2018] FCA 43
Australian Building and Construction Commissioner v Parker [2017] FCA 564
Australian Building and Construction Commissioner v Upton (The Gorgon Project Case) [2017] FCA 847
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321
Australian Red Cross Society v Queensland Nurses’ Union of Employees [2019] FCAFC 215
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Bragdon v Director of the Fair Work Building Industry Inspectorate (2016) 242 FCR 46
Briginshaw v Briginshaw (1938) 60 CLR 336
C. Czarnikow Ltd v Koufos [1969] 1 AC 350
Caterson v Commissioner for Railways (1973) 128 CLR 99
Celand v Sky City Adelaide Pty Ltd (2017) 256 FCR 306
Chappel v Hart (1998) 195 CLR 232
Clark v Macourt (2013) 253 CLR 1
CMP Manufacturing Pty Ltd v Barbieri [2018] FCA 622
Commonwealth Bank of Australia v Barker (2013) 214 FCR 450
Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466
Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273
Construction, Forestry, Mining and Energy Union v De Martin and Gasparini Pty Ltd (No 2) [2017] FCA 1046
Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182
Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446
Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Red and Blue Case) [2015] FCA 1125
Director of the Fair Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1293
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 225
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 199
Esso Australia Pty Ltd v Australian Workers’ Union (2017) 263 CLR 551
Esso Australia Pty Ltd v The Australian Workers’ Union (2016) 245 FCR 39
Esso Australia Pty Ltd v Australian Workers’ Union [2015] FCA 758
Ezy Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134
Fair Work Ombudsman v Australian Workers’ Union [2017] FCA 528
Fair Work Ombudsman v Maritime Union of Australia [2017] FCA 1363
Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833
Gamboni v Bendigo and Adelaide Bank Ltd (2013) 39 VR 578
General Motors‑Holdens Pty Ltd v Bowling (1976) 51 ALJR 235
Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237
Henville v Walker (2001) 206 CLR 459
Jones v Dunkel (1959) 101 CLR 298
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70
Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120
Maritime Union of Australia v Fair Work Ombudsman (2016) 247 FCR 154
Mann v Capital Territory Health Commission (1982) 148 CLR 97
March v E and M H Stramare Pty Ltd (1991) 171 CLR 506
Medlin v The State Government Insurance Commission (1995) 182 CLR 1
National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451
Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
Regional Development Australia Murraylands and Riverlands Inc v Smith [2015] SASCFC 160
Romero v Farstad Shipping (Indian Pacific) Pty Ltd (No 3) [2016] FCA 1453
R v Cornelissen [2004] NSWCCA 449
Robinson v Harman (1848) 1 Ex 850
Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496
Short v Ambulance Victoria [2015] FCAFC 55
Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357
State of Victoria v Construction, Forestry, Mining and Energy Union (2013) 218 FCR 172
Tabet v Gett (2010) 240 CLR 537
Trampoline Enterprises Pty Ltd v Fresh Retailing Pty Ltd [2019] VSCA 74
Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278
Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603
Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101
Wenham v Ella (1972) 127 CLR 454
Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668
Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381
Date of hearing: 3-7 December 2018, 10-12, 20-21 December 2018 Registry: Victoria Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 371 Counsel for the Applicant: Mr P Rozen QC Solicitor for the Applicant: Kennedys Law Counsel for the First and Second Respondents: Ms R Doyle SC with Mr M Follett Solicitor for the First and Second Respondents: Allens Counsel for the Third Respondent: Ms C Howell with Mr T Borgeest Solicitor for the Third Respondent: Slater & Gordon Counsel for the Fourth Respondent: Mr J Pearce Solicitor for the Fourth Respondent: Carroll & O’Dea Lawyers ORDERS
VID 876 of 2017 BETWEEN: MICHAEL NEWTON
Applicant
AND: AUSTRALIAN POSTAL CORPORATION
First Respondent
AHMED FAHOUR
Second Respondent
COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA (and another named in the Schedule)
Third Respondent
JUDGE:
BROMBERG J
DATE OF ORDER:
23 DECEMBER 2019
THE COURT ORDERS THAT:
1. On or before 24 January 2020, the applicant and the first respondent:
(i)file and serve an outline of any witness evidence dealing with the applicant’s earnings and employment circumstances post-November 2018 that the party seeks to rely upon; or in the alternative
(ii)file a statement of agreed facts dealing with those matters; or in the further alternative
(iii)should there be agreement on the quantum of damages and interest payable reflective of the findings made by the Court, file a minute of the orders those parties propose should be made.
2.Subject to any further order, the proceeding be listed for further hearing on a date to be fixed in the week of 3 February 2020.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
SECTIONS 348 AND 355 CLAIMS – REMOVAL DECISION AND CANCELLATION OF PROJECT DOVE
[12]
Relevant Legislation and Legal Principles
[18]
Elements of ss 348 and 355
[25]
That “action” was threatened
[25]
Use of unlawful, illegitimate or unconscionable conduct
[27]
The actual existence of the circumstance said to be the subject of the coercive “action” organised, taken or threatened
[31]
State of mind elements
[32]
Engaging s 361(1)
[36]
When the rebuttal of the presumption falls to be determined
[41]
Can s 361(1) apply to a threat?
[42]
Standard of proof
[53]
Admitted Allegations
[56]
The Pleadings and the Admitted Allegations
[60]
The Facts
[65]
Consideration
[113]
Were threats/demands made by Metcher?
[113]
Intent to coerce
[168]
Removal of Michael Newton
[168]
Cancellation of Project Dove
[178]
Availability of a Jones v Dunkel inference
[181]
Accessorial Liability of Fahour and APC
[182]
SECTION 340 CLAIM – REMOVAL DECISION
[191]
Relevant Legislation and Legal Principles
[191]
Whether the Removal Decision Constituted Adverse Action
[197]
Workplace Right
[198]
State of Mind Element
[199]
CONTRACTUAL CLAIMS
[205]
Alleged Contractual Breach Relating to the Removal Decision
[215]
First Period
[235]
Second Period
[239]
Third Period
[245]
Suitability of alternative positions proposed/offered
[265]
Suitability of the MBII position
[280]
Suitability of the MPFS and MFWPA positions
[290]
Alleged Contractual Breach Relating to the Garden Leave Decision
[294]
SECTION 340 CLAIM – GARDEN LEAVE DECISION
[302]
RELIEF
[309]
Loss of Remuneration Damages
[311]
Causation
[313]
Did an intervening event break the chain of causation?
[328]
Remoteness of damage
[334]
The Measure of Damages
[340]
The counter-factual
[342]
The factual
[354]
Mitigation
[357]
The need for updating
[361]
General Damages
[364]
CONCLUSION
[368]
BROMBERG J:
In this proceeding the applicant (“Michael Newton”) seeks various remedies against four respondents in relation to alleged contraventions of ss 340(1), 348 and 355 of the Fair Work Act 2009 (Cth) (“FW Act”). He also seeks damages with respect to alleged breaches of his contract of employment by the first respondent (“APC”).
The second respondent, Ahmed Fahour (“Fahour”) was, at all material times, the Managing Director and Group Chief Executive Officer (“CEO”) of APC. APC and Fahour filed a joint defence and were jointly represented. Where convenient (and appropriate) I will refer to them together as the “APC respondents”. The third respondent is the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the “CEPU”). The fourth respondent, James (Jim) Metcher (“Metcher”), was at all material times the Branch Secretary of the New South Wales Postal and Telecommunications Branch of the CEPU and an “officer” of the CEPU within the meaning of s 12 of the FW Act.
On 24 March 2014, Michael Newton commenced employment at APC as its National Compensation Manager pursuant to a contract of employment executed on 13 March 2014. In that role, Michael Newton reported to Emma Blee (“Blee”), Head of Enterprise Safety, who in turn reported to Catherine Walsh (“Walsh”), General Manager, Group Executive, Human Resources and Safety. Walsh reported to Chris Blake (“Blake”), Executive General Manager, Corporate Affairs and People. Blake reported to Fahour.
One of Michael Newton’s key responsibilities was to drive “Project Dove” outcomes. This was weighted at 20% of his overall performance evaluation in the mid-year performance plan for the 2015/16 financial year. Project Dove was an internal project that assumed some significance in the proceedings, the status of the project and the level of executive oversight over it are matters in dispute. Broadly speaking, it was a project designed to change the way in which APC dealt with some 3,000 injured employees who were receiving workers’ compensation and not performing full duties. Project Dove was worked on by a team with members from different areas within APC and its executive sponsors were Walsh and Peter Bass (“Bass”), the General Manager, Mail Network and Postal Safety.
Broadly stated, the alleged contraventions of the FW Act and the contractual breaches are said to arise from two events which occurred in 2016:
(1)when Michael Newton was removed from his position as National Compensation Manager at APC on 5 February 2016 (the “Removal decision”) and Project Dove was cancelled; and
(2)when Michael Newton was prohibited from attending work and allegedly placed on “garden leave” on 27 April 2016 (the “Garden leave decision”).
Michael Newton alleges that Metcher contravened ss 348 and 355 of the FW Act on 5 February 2016 during a telephone conversation with Fahour which led to the Removal decision and the cancellation of Project Dove. It is alleged that the CEPU is liable for those contraventions by operation of ss 363 and 793 of the FW Act. It is further alleged that Fahour was “involved in” the contraventions by Metcher within the meaning of s 550 of the FW Act, and that APC is liable for these contraventions under s 793 of the FW Act.
Michael Newton alleges that the Removal decision was a breach of s 340(1) of the FW Act by APC. Fahour is alleged to have been “involved in” the contravention by APC within the meaning of s 550 of the FW Act.
Michael Newton also alleges that by the Garden leave decision APC also contravened s 340(1) of the FW Act.
Finally, Michael Newton alleges that the Removal decision and the Garden leave decision were in breach of his contract of employment with APC. There is no dispute that on 11 August 2016, Michael Newton was terminated from his employment with APC. Michael Newton does not contend that APC’s act of terminating his contract of employment was itself a breach of that contract. He maintains, however, that the termination of his employment contract was a “consequence” of APC’s contractual breach in giving effect to the Removal decision.
By way of remedy for his statutory breach claims, Michael Newton seeks orders for reinstatement, and orders for compensation and penalties. Michael Newton seeks damages for his breach of contract claims.
These reasons are broadly divided into two sections – the first deals with the statutory claims made by Michael Newton (other than relating to the Garden leave decision) and the second deals with his contractual claims. Many of the facts are relevant, at least by way of background, to both the statutory and the contractual claims as well as the statutory claim made in respect of the Garden leave decision. Nevertheless, given the chronological order of the most significant events, it is convenient that I record those facts primarily of relevance to the statutory claims (other than the Garden leave decision) in the first section of these reasons and likewise deal with the facts of primary relevance to the remainder of the claims in the second section of these reasons. The overlapping relevance of many of the facts recorded should not, however, be overlooked.
SECTIONS 348 AND 355 CLAIMS – REMOVAL DECISION AND CANCELLATION OF PROJECT DOVE
Michael Newton alleges three separate contraventions of ss 348 and 355 of the FW Act by Metcher and the CEPU. What was communicated by Metcher to Fahour when they spoke by telephone on 5 February 2016 is critical to Michael Newton’s success on these claims.
Michael Newton alleges that Metcher said that he would:
(1)leak documents about “Project Dove” to the media and politicians;
(2)arrange protest rallies about “Project Dove”;
(3)take APC to the cleaners;
(4)take serious industrial action; and
(5)take legal action
unless Fahour cancelled Project Dove and removed Michael Newton from his role as National Compensation Manager.
The contraventions of ss 348 and 355 of the FW Act are alleged on the basis that Metcher said to Fahour that, unless Fahour cancelled Project Dove and removed Michael Newton from his position as National Compensation Manager, Metcher would carry out the threatened actions detailed above. The alleged contraventions are said to be as follows:
(1)A contravention of s 348 by reason of Metcher making threats to take action against APC with intent to coerce APC to engage in “industrial activity”, namely, complying with a lawful request (s 347(b)(iv)) or, alternatively, an unlawful request (s 347(e)) made by the CEPU to APC for Michael Newton to be removed from his position as National Compensation Manager.
(2)A contravention of s 355 of the FW Act by reason of Metcher threatening to take action with intent to coerce APC not to allocate to Michael Newton the duties and responsibilities or not to designate Michael Newton as having the duties and responsibilities of the role of National Compensation Manager.
(3)A contravention of s 348 of the FW Act by reason of Metcher making threats to take action against APC with intent to coerce APC to engage in “industrial activity”, namely, complying with a lawful request (s 347(b)(iv)) made by the CEPU to APC for Project Dove to be cancelled.
Insofar as the CEPU is concerned, and in reliance on ss 363(1)(b) and 793(1)(a) of the FW Act, Michael Newton alleges that the actions of Metcher were the actions of the CEPU and that therefore the CEPU contravened ss 348 and 355 on each occasion that those provisions were contravened by Metcher. Insofar as APC and Fahour are concerned, and in reliance on s 550 of the FW Act, Michael Newton alleges that they were “involved in” each of Metcher’s contraventions set out above, such that they themselves are taken to have contravened those provisions.
Metcher and the CEPU resist any findings of any primary contraventions of ss 348 or 355 of the FW Act.
The APC respondents resist any findings of any contraventions of ss 348 or 355 of the FW Act on the following alternative bases:
(1)none of the primary contraventions are made out (for a number of reasons); and
(2)in the alternative, APC and Fahour were not “involved in” any contraventions.
Relevant Legislation and Legal Principles
Section 348 of the FW Act is in the following terms:
Coercion
A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity.
The phrase “engage in industrial activity” used in s 348 is defined in s 347 to include complying with a “lawful request made by, or requirement of, an industrial association” (s 347(b)(iv)) and complying with “an unlawful request made by, or requirement of, an industrial association” (s 347(e)).
Section 355 of the FW Act also deals with coercive conduct but is directed at protecting a person’s capacity to employ or not employ a particular person and the allocation of duties and responsibilities to a particular person. Relevantly, s 355 provides:
A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to:
…
(c)allocate, or not allocate, particular duties or responsibilities to a particular employee or independent contractor; or
(d)designate a particular employee or independent contractor as having, or not having, particular duties or responsibilities.
Because ss 348 and 355 are found in Pt 3-1 of the FW Act, s 361(1) can have application if it is engaged. Section 361 of the FW Act is in the following terms:
(1) If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.
Section 361(1) creates a rebuttable presumption. The operation of s 361 was described by Kiefel CJ, Keane, Nettle and Edelman JJ in Esso Australia Pty Ltd v Australian Workers’ Union (2017) 263 CLR 551 (“Esso-HC”) at [58] as follows:
Section 361 of the Fair Work Act relevantly provides that where it is alleged that a person took action for a particular reason or with a particular intent, and taking the action for that reason or with that intent would constitute a contravention of Pt 3-1 (which includes ss 343 and 348), it is presumed that the action was taken for that reason or with that intent unless the person proves otherwise. Thus the burden of proof was on the AWU to establish the absence of coercive intent in relation to ss 343 and 348.
Questions arise in this proceeding as to who it is that bears the onus of proof and whether the presumption in s 361(1) of the FW Act has application and if so to which elements or ingredients of the causes of action under ss 348 and 355 of the FW Act. Whether that provision was here engaged because the pre-conditions to its engagement were satisfied is also at issue, as is a question as to whether s 361(1) has any application to conduct constituted by a threat.
Both ss 348 and 355 are made up of a number of elements or ingredients that need to be proved, these include both “state of mind” elements and other elements which I will call “objective elements”. In considering questions about onus of proof the starting point is that, ordinarily, the applicant bears the onus of proof for each and every element of a contravention. However, as I will explain, if s 361(1) applies and is engaged, then the onus of proof in relation to the “state of mind elements” in ss 348 and 355 is altered and it falls upon the respondent to rebut the presumption applied by s 361(1). In order to address these questions, I will first address the applicability of s 361(1) to each of the elements that make up ss 348 and 355 relevant to this proceeding. I will then separately discuss the question of the engagement of s 361(1) and its applicability to conduct constituted by a threat.
Elements of ss 348 and 355
That “action” was threatened
Each of ss 348 and 355 requires that it be proved that “action” was organised, taken or threatened. Relevant to this proceeding is the prohibition that a person must not “threaten to…take, any action against another person”. An issue arises as to what constitutes a threat of a kind capable of engaging ss 348 or 355 of the FW Act. The phrase “threatening to take action” appears in s 342(2) of the FW Act as part of the meaning of “adverse action”. In Fair Work Ombudsman v Australian Workers’ Union [2017] FCA 528 at [53]-[54], I surveyed the authorities on the meaning of that phrase. There is no reason, in my view, as to why the phrase “threaten to…take…action” in ss 348 and 355 should bear a different meaning. At [54] of Fair Work Ombudsman I said this:
[54]A number of principles may be drawn from the authorities I have just outlined. First, ‘threatening to take action’ must involve the communication of a threat directed at an ascertainable person which is received or is likely to be received by that person. That a particular outcome is threatened by existing or prospective circumstances is not a threat of the requisite kind. Second, to threaten means to communicate an intent to inflict harm or, in other words, a warning of an intention to inflict harm. Third, the essence of a threat is that it is made for the purpose of intimidating a person. Accordingly, ‘threatening to take action’ must involve an expression of an intimidatory purpose. Fourth, it is not necessary that a subjective intent to carry out the threat be established. Fifth, the notion of a threat is not confined to an intent to inflict harm which was unlawful or unjustified. Sixth, the presence of malice or some other injurious motive is not a prerequisite. Lastly, a threat to take action may be conditional (in the sense that X will occur if Y does not).
Whether or not what was done constitutes a threat is to be determined objectively: Australian Building and Construction Commissioner v McDermott(No 2) [2018] FCA 1611 at [149] (Charlesworth J). This is an element that must be proved by the applicant and to which s 361(1) has no application.
Use of unlawful, illegitimate or unconscionable conduct
Both ss 348 and 355 prohibit a person from taking or threatening to take action against another person with “intent to coerce” that other person. Relevant principles as to the meaning of the phrase “intent to coerce” find their source in the legal meaning of the common law concepts of coercion and duress and are now “settled”: State ofVictoria v Construction, Forestry, Mining and Energy Union (2013) 218 FCR 172 at [70], [72] (Buchanan and Griffiths JJ). The expression “intent to coerce” has been held to comprise two discrete elements. First, a state of mind element, being, the negation of choice (which I will discuss in more detail below), and second an objective element – the use of unlawful, illegitimate or unconscionable conduct. This distinction was helpfully summarised by Tracey, Reeves and Bromwich JJ in relation to s 355 and s 343(1) (which also deals with coercive conduct), in Australian Building and Construction Commissioner v Hall(2018) 261 FCR 347 at [25]:
[25]It is well-established that the expression ‘intent to coerce’ in ss 343 and 355 carries within it a requirement to establish two discrete elements: the negation of choice; and the use of unlawful, illegitimate or unconscionable conduct to do so (see Esso Australia Pty Ltd v Australian Workers’ Union (2016) 245 FCR 39 at [174] (Buchanan J, with whom Siopis J agreed at [1])). We interpose that this conclusion and the line of authorities relied upon to reach it do not appear to have been affected by the recent High Court judgment on appeal from that judgment (see Esso Australia Pty Ltd v Australian Workers’ Union (2017) 92 ALJR 106; 350 ALR 404 at [61] (Kiefel CJ, Keane, Nettle and Edelman JJ)).
In relation to the objective element, the use of unlawful, illegitimate or unconscionable conduct, Allsop CJ, Collier and Rangiah JJ said the following in Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191 at [157]-[159] (citations omitted):
[157]The notion of unconscionability, as imposing a standard of right behaviour formed around conscience, will take its content from the values and expected conduct in an industrial setting. It is a word best understood in its practical application to real life settings where there can be an articulation and expression of why, in an employment and industrial context, the pressure sought to be exerted should be ascribed such a description of departing from right behaviour.
[158]Although illegitimacy can be seen to be a similar conception to unconscionability as a word connoting a degree of right behaviour, illegitimacy has emerged (rightly or wrongly) as its own separate category of behaviour
…
[159]The notion of proportionality has been said to inform the concept of illegitimacy, in an assessment whether there is a reasonable or justifiable connection between the nature of the demand made and the nature of the pressure exerted.
This element is concerned with the nature of the “action” threatened, organised or taken and operates to require that that action be shown to have been unlawful, illegitimate or unconscionable. As I said in Fair Work Ombudsman at [63]-[68] and also in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Bay Street Case) (2018) 260 FCR 564 at [100]-[103], this is an objective factor that must be proved by the applicant. Section 361(1) therefore has no application to this element.
Although not an issue put in contest, it is worth noting that in Esso-HC at [62]-[63], Kiefel CJ, Keane, Nettle and Edelman JJ (Gageler J agreeing at [65]) left open whether this requirement also includes a subjective or state of mind consideration, namely, whether the respondent “had a subjective understanding of the factual circumstances that, viewed objectively, would be seen as rendering the [‘action’] unlawful, illegitimate or unconscionable”. Relevantly to the scope of s 361(1), an issue to which I will return, their Honours noted that if that subjective understanding was necessary to be proved, s 361(1) would have application.
The actual existence of the circumstance said to be the subject of the coercive “action” organised, taken or threatened
A further objective element that an applicant must prove and to which s 361(1) has no application, is the factual existence of the circumstance said to be the subject of the coercive “action” organised, taken or threatened: Hall at [15]-[16]. It is far from clear, however, what the relevant circumstance or circumstances that need to be proved are. I discussed that issue at [69]-[81] of Fair Work Ombudsman. Without reaching a concluded view, I there observed that it may be necessary for an applicant to prove the factual existence, at the time that the coercive “action” was taken, of the choice or capacity which is sought to be protected by the provision in question. In the case of s 348 that choice or capacity is the ability to engage or not engage in the particular “industrial activity” which the applicant relies on. In the case of s 355 it will be one or more of the capacities enumerated at paras (a)-(d) of that provision. That is not a matter I need to consider further. Save for one reservation, it was not in contest that at the time the action here alleged was taken, the protected choices – relevantly, APC’s capacity to engage in the “industrial activity” alleged (s 348) or its capacity to allocate or not allocate particular duties or responsibilities to Michael Newton (s 355), existed. In so far as, in relation to s 348, Michael Newton relied upon the “industrial activity” specified by s 347(b)(iv) of complying with a “lawful request”, the APC respondents and the CEPU relied upon the reservation expressed in my judgment in the Bay Street Case at [82]-[85] to formally reserve their position. The same reservation was made by the APC respondents in relation to Michael Newton’s reliance upon s 347(e). I note, however, that that provision was not the subject of the view I expressed in the Bay Street Case that a “request” within the meaning of s 347(b)(iv) is to be construed as limited to a request made to associate with or participate in the activities of the industrial association that made the request.
State of mind elements
The state of mind elements of ss 348, 355 (and s 343) arise from the fact that a contravention of those provisions depends upon action being taken, organised or threatened with a particular state of mind. As Greenwood, Besanko and Rangiah JJ said in Australian Red Cross Society v Queensland Nurses’ Union of Employees [2019] FCAFC 215 at [75]:
one of the evident purposes of a section like s 361(1) as described by Mason J in Bowling is to place the onus of proving a mental state on the person best able to prove it, being the person whose mental state is in issue. It would be odd if the applicant bore the onus of proving part of the decision-maker’s mental state.
There are two components to the state of mind elements required to be proved under ss 348 and 355 (and s 343). The first goes to the respondent’s intent and the second to the respondent’s reason. Section 361(1) is applicable to each. In Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446 at [230] and in relation to s 343, which is relevantly in the same form, I said this:
Section 343(1) is a provision which, in the words of s 361, depends upon action taken ‘for a particular reason or with a particular intent’. The intent which s 343(1) deals with has two aspects. The first aspect is addressing the nature or character of the intent. The particular intent required is an intent to coerce. The second aspect of the requisite intent is addressing the purpose or reason of the action taken. The purpose or reason for the taking of the action must be to have the other person (or third person) do or not do one of those things specified by paragraphs (a) and (b) of s 343(1). The first aspect may be characterised as a ‘particular intent’ and the second as a ‘particular reason’ within the meaning of those terms in s 361(1).
On appeal, that approach to s 361(1) was left undisturbed with apparent approval: Victoria v Construction, Forestry, Mining and Energy Union at [82] (Buchanan and Griffiths JJ). In Hall (at [24]) Tracey, Reeves and Bromwich JJ expressly endorsed the reasoning in McCorkell.
Accordingly, to establish a contravention, both the requisite nature of the intent (an intent to negate choice) (as discussed above at [27] and see Hall at [25]-[27]) and that a reason or purpose of the action taken, organised or threatened was the engagement in “industrial activity” (for s 348) or, the engagement in the particular conduct specified by paras (a)-(d) of s 355 (for s 355), must be proved. As stated, s 361(1) is applicable.
Engaging s 361(1)
In order to engage s 361(1), there are two pre-conditions that need to be met.
First, as is stated by s 361(1)(a) itself, to engage the benefit of s 361, an applicant must make the allegation that “a person took, or is taking action for a particular reason or with a particular intent”: Celand v Sky City Adelaide Pty Ltd (2017) 256 FCR 306 at [147] (Bromberg J with whom Charlesworth J agreed at [167]); Australian Red Cross Society at [65] (Greenwood, Besanko and Rangiah JJ). In Hall (at [14]) the Full Court emphasised that the allegation “must precisely and distinctly identify the alleged reason or the alleged intent, for contravening conduct”. As discussed at [35], a contravention of ss 348 and 355 requires the respondent to have both a “particular intent” (an intent to negate choice) and a particular reason (for s 348, engagement in one or more of the industrial activities defined in s 347 and, for s 355, one or more of the matters addressed by paras (a)-(d) thereof). Both the particular intent and the particular reason will need to be precisely and distinctly conveyed in the allegation made: Hall [40]. In identifying the “particular intent” an applicant must, by the allegation made, “convey the relevant particular intent required for a contravention of [ss 348 or 355], namely an intent to negate choice”: Hall at [41]. To merely allege an “intent to coerce” may not suffice, a matter further discussed at [169] below.
Second, the evidence must be consistent with the hypothesis that the respondent was actuated to take the impugned action by the reason or intent alleged. I discussed the relevant authorities on that issue in Celand at [155]-[157] (Charlesworth J agreeing) and see Australian Red Cross Society at [67]-[74] (Greenwood, Besanko and Rangiah JJ). As Greenwood, Besanko and Rangiah JJ sought to emphasise by reference to the discussion in Celand, it is not necessary for the applicant to establish a prima facie connection between the alleged action and the impugned reason or intent but only that the connection is not so remote as to be fanciful.
A second pre‑condition to the engagement of s 361(1) was referred to in Hall at [15] and at [19] where the Full Court said:
an applicant wishing to take advantage of the presumption in s 361, in addition to making the allegation in a form that meets the requirements of s 361(1)(a), must provide sufficient information about the action, and the related reason or intent (or both) for which that action was taken, to show that, in combination, they would constitute a contravention of a provision of Pt 3-1 of the FWA.
In my respectful view, that observation is not intended to raise a third precondition but should be understood consistently with the second pre‑condition to the engagement of s 361(1) articulated in Celand and Australian Red Cross Society and the authorities there discussed.
When the rebuttal of the presumption falls to be determined
Lastly, as was mentioned in Hall at [18] by reference to observations made by the Full Court in Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273 at [27]-[28], whether the presumption in s 361(1) has been displaced falls to be determined at the end of the trial and its answer would depend on “the assessment of all of the facts by the trier of fact, including, most importantly in the conventional case, his or her assessment of the evidence given by the decision-maker acting on behalf of the [respondent]”.
Can s 361(1) apply to a threat?
An issue arises as to whether the reference in s 361(1) to the need to allege that “a person took, or is taking, action” extends to an allegation that action is or was threatened. The respondents assert that a threat is not “action” within the meaning of that term in s 361(1) and that therefore s 361 can have no application where the making of a threat is the conduct alleged against the respondent.
There is authority for the proposition that s 361(1) does not apply in relation to an alleged contravention of s 355 where the alleged conduct is a threat: Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Red and Blue Case) [2015] FCA 1125 at [111] (Jessup J). In the Red and Blue Case and for the same reasons, Jessup J also determined that s 361(1) does not apply in relation to an alleged contravention of s 355 of the FW Act where the alleged conduct was the organising of action taken by others (at [114]). His Honour said that s 361(1) applies “only to the mental element involved in taking action. In terms, it does not apply to a threat to take action” (at [111]).
If that reasoning in relation to s 355 is correct, it would also apply to the other provision here in question, s 348 of the FW Act. The Red and Blue Case has been followed by a number of authorities to which I will shortly refer. There are other authorities which are inconsistent with the reasoning in the Red and Blue Case.
In my view, an allegation that a person made a threat or organised action is an allegation that “a person took, or is taking, action” within the meaning of that phrase in s 361(1).
First, on the natural meaning of the word “action” it means the “process or condition of acting or doing”: Shorter Oxford English Dictionary (6th ed, Oxford University Press, 2007) Vol 1 p 22. “Action” is a word of broad application and as White J said in Director of the Fair Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1293 at [102] “[t]he word ‘action’ is used in s 361(1) without qualification”. Its intended broad application is confirmed by the definition of “action” in s 12 of the FW Act as including “an omission”. The term plainly extends to the act of making a threat or the act of organising someone else to do or not to do an act. To threaten or to organise is to do an act and engage in an “action” and to make an allegation that a person has made a threat or has organised others, is to allege that “a person took, or is taking action”.
Second, s 361(1) serves a beneficial purpose and ought not be narrowly construed. Third, if resort is to be had to the context and purpose of s 361, as Mason J explained in General Motors‑Holdens Pty Ltd v Bowling (1976) 51 ALJR 235 at 241, the “plain purpose” for a reverse onus provision such as s 361 is that a respondent’s reason for engaging in the impugned conduct “lies peculiarly within his [or her] own knowledge”: see further Celand at [148], (Bromberg J) and Australian Red Cross Society at [69]-[70] and [75] (Greenwood, Besanko and Rangiah JJ). Bearing in mind its purpose, there is no discernible reason why s 361(1) should be regarded as not intended to have application to the state of mind elements required to be proved where action is organised or threatened. Further, the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) at [1459]‑[1461] supports the proposition that the term “action” includes threatened action. So much is expressly referred to at [1461] and the content of [1459] makes good the proposition that, when the word “conduct” used in the legislative predecessor to s 361 (s 809 of the Workplace Relations Act 1996 (Cth)) was replaced with the word “action”, there was no intention to narrow the scope of the provision: see further Director of the Fair Building Industry Inspectorate at [103] (White J).
The reasoning in the Red and Blue Case purports to construe the plain words of s 361(1) not by reference to s 361(1) itself, but through the prism of s 355 and the phrase “[a] person must not organise or take, or threaten to organise or take, any action”. That provision, like others to which s 361(1) has application, can provide context but the focus of the constructional exercise must be the words of s 361(1). In any event, each of the words “organise”, “take” and “threaten” used in s 355 are verbs which, like all verbs, are words which are used to describe an action. The phrase “any action” is used in s 355 to clarify the broad nature of the prohibition. It is not being used to deny that to “threaten” or to “organise” is a form of action.
There are a number of authorities which support the view I prefer: I have already mentioned the judgment of White J in Director of the Fair Work Building Industry Inspectorate at [101]‑[104]. Although the issue was not there in contest, McCorkell is an example of a case where s 361 was applied in relation to an allegation of threatened action (see at [229]). As outlined above at [34], the approach I took in McCorkell was endorsed in Hall in a passage which expressly referred to s 361(1) having application in relation to “action…threatened to be taken”. Section 361(1) has also been applied to threatened action in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 225 at [264]-[265] (Tracey J); Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 199 at [100] (Mansfield J).
Furthermore, and with respect to Jessup J, his Honour’s approach in the Red and Blue Case is at odds with the approach that his Honour took in Esso Australia Pty Ltd v Australian Workers’ Union [2015] FCA 758 at [167] where, in relation to the organising of (and not the taking of) industrial action, Jessup J held that s 361 applied. On appeal Esso Australia Pty Ltd v The Australian Workers’ Union (2016) 245 FCR 39 (“Esso-FC”) Buchanan J (with whom Siopis J agreed) also held (at [172]-[173]) that s 361(1) applied. That approach was not disturbed in the High Court when the operation of s 361(1) was addressed in the passage set out at [22] above. The reference I have made to Esso-HC in the last sentence of [30] above, also supports the view that s 361 has application to all of the possible state of mind elements in ss 348, 343 and 355.
Having said all that, I appreciate that the Red and Blue Case has been followed by a number of authorities, although not necessarily in circumstances where the approach there taken was in contest: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Quest Apartments Case) [2017] FCA 1398 at [70]; Australian Building and Construction Commissioner v O’Connor (No 3) [2018] FCA 43 at [128]; Australian Building and Construction Commissioner v Parker [2017] FCA 564 at [105]-[106]. In Australian Building and Construction Commissioner v Upton (The Gorgon Project Case) [2017] FCA 847 at [119], Barker J did not regard the reasoning in the Red and Blue Case as “plainly wrong”; Charlesworth J applied this reasoning in McDermott [2018] FCA 1611 at [137]-[147] with which Banks‑Smith J agreed in Australian Building and Construction Commissioner v Molina (No 2) [2019] FCA 1014 at [175]. In Construction, Forestry, Mining and Energy Union v De Martin and Gasparini Pty Ltd (No 2) [2017] FCA 1046 (at [364]) Wigney J expressed reservation about the correctness of the Red and Blue Case but followed it in circumstances where its correctness was not there challenged.
There is, in my view, a conflict in the authorities on this issue. For the reasons stated, the better view is that s 361(1) can have application to an allegation that a person has organised or has threatened action. I will proceed on that basis.
Standard of proof
The respondents emphasised the gravity of the allegations made against them by Michael Newton. They characterised the allegations as allegations of unlawful conduct deliberately taken and involving intentional impropriety. They relied upon s 140(2)(c) of the Evidence Act 1995 (Cth) as embodying the principle in Briginshaw v Briginshaw (1938) 60 CLR 336 and contended that the allegations made by Michael Newton cannot be proved on the strength of “inexact proofs, indefinite testimony or indirect inferences”: Briginshaw at 362 (Dixon J).
I accept that any contravention of the FW Act must be “clearly established”: Bragdon v Director of the Fair Work Building Industry Inspectorate (2016) 242 FCR 46 at [45] (Buchanan, Reeves and Bromberg JJ). Nor is a finding of contravention to be lightly made: Australian Building and Construction Commissioner v Hall [2017] FCA 274 at [20] (Flick J). In Hall, the Full Court referred to the applicable standard as “the Briginshaw standard” (at [100]). However it must always be appreciated, as Jagot J helpfully observed in Fair Work Ombudsman v Maritime Union of Australia [2017] FCA 1363 at [20], that:
The standard of proof is on the balance of probabilities. Section 140(2)(c) does not alter the standard of proof in a civil matter. It speaks to the process of reasoning by which a finder of fact may be satisfied that the evidence reaches or does not reach the standard. In that process, due recognition must be given to the fact that some events are inherently more or less likely than others.
I have adopted that process of reasoning in carrying out the fact finding task required in relation to each of the statutory claims made by Michael Newton. Furthermore many of the facts sought to be established by Michael Newton rely on the Court drawing inferences from the evidence. In the approach to inferential fact-finding which I am bound to take, I will need to be satisfied that the circumstances appearing in the evidence give rise to reasonable and definite inferences and not merely to conflicting inferences of equal degrees of probability: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at [38] (Weinberg, Bennett and Rares JJ) citing Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278 at [34] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ).
Admitted Allegations
I will shortly refer to the pleadings and, in particular, to allegations made by Michael Newton that were admitted in the Amended Defence of the APC respondents but not admitted by Metcher or the CEPU.
It is not in contest that Michael Newton is, as against the APC respondents, entitled to rely upon the allegations admitted by those parties. The admitted allegations concern factual matters and the effect of the admissions is to put the facts alleged out of dispute. A court is not bound to act on admissions (Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321 at [42] and [49], Gray J), but in the absence of any contention to the contrary, I intend to treat the factual allegations admitted by the APC respondents as binding and as establishing against them the existence of those facts.
However, it is necessary to observe that the allegations admitted by the APC respondents are not received as evidence. Particularly where, as here, pleadings are not required to be directly verified by the party on whose behalf they are made, admitted allegations are not to be treated as though they are evidentiary admissions made by the party making a pleadings admission: Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 86 (Mason CJ and Brennan J). That the allegations admitted by the APC respondents through their pleadings should be treated as evidentiary admissions was the premise upon which Michael Newton contended that, in the context of the conduct of “several trials that have been joined”, the admissions made by the APC respondents can also be relied upon by Michael Newton as against Metcher and the CEPU. That submission must be rejected.
That contention is rejected because, first as already stated, pleadings admissions are not evidentiary admissions even against the party whose pleadings contain the admission. Second and by analogy, in the absence of consent, even evidentiary admissions are not admissible as against a party to the proceeding where the admission is made by evidence adduced by another party: s 83 of the Evidence Act. Third, Michael Newton’s reliance on the conduct of a joint trial is misplaced A joint trial involving multiple respondents is not one trial but several trials in which, putting aside exceptions not presently relevant, admissions made in the trial of one respondent are not admissible as evidence in the trial of another. For an example of the application of that principle see R v Cornelissen [2004] NSWCCA 449 at [110]-[115] (James J, with whom Hidden and Bell JJ agreed).
The Pleadings and the Admitted Allegations
Before referring to the evidence, it is both necessary and convenient to set out the critical conversation between Metcher and Fahour on 5 February 2016 as pleaded in Michael Newton’s Second Further Amended Statement of Claim (“SFASoC”) and as dealt with in the Amended Defence of the APC respondents. Michael Newton pleaded that:
41.On 5 February 2016, Metcher spoke to Fahour by telephone. During the conversation, Metcher told Fahour that:
a.Metcher had in his possession leaked APC documents about ‘Project Dove’ (APC documents);
b. He was opposed to APC’ s implementation of ‘Project Dove’; and
c. He could not work with [Michael Newton] any more.
41A. By telling Fahour that he could not work with [Michael Newton] any more, Metcher was in effect demanding that [Michael Newton] be removed from his role as National Compensation Manager.
41B When Fahour was told by Metcher that he (Metcher) could not work with [Michael Newton] any more, Fahour understood that this was in effect a demand by Metcher that [Michael Newton] be removed from his role as National Compensation Manager.
42. During the conversation, Metcher also said that he would:
a. leak the APC documents to the media and politicians;
b. arrange protest rallies about ‘Project Dove’;
c. take [APC] to the cleaners;
d. take serious industrial action; and
e. take legal action.
unless Fahour:
i. cancelled Project Dove; and
ii.removed [Michael Newton] from his position as National Compensation Manager.
43. Fahour agreed with Metcher that APC would:
a. cancel ‘Project Dove’; and
b.remove [Michael Newton] from his position as National Compensation Manager.
Particulars
The agreement was made orally on 5 February 2016 during a telephone conversation between Metcher and Fahour.
The APC respondents jointly filed an Amended Defence. They admitted para 41 of the SFASoC subject to disputing that Metcher described the slides in his possession as “leaked”. Importantly, the APC respondents admit that Metcher told Fahour that he could not work with Michael Newton anymore. However, in answer to para 41A of the SFASoC, APC and Fahour deny that by saying that he could not work with Michael Newton, Metcher was in effect demanding that Michael Newton be removed from his role as National Compensation Manager. They also deny para 41B of the SFASoC that, from the statement made by Metcher that he could not work with Michael Newton, Fahour understood that the demand was made. They say that the alleged demand was not made either expressly or impliedly.
The alleged threatened actions are the subject of para 42 of the SFASoC. The APC respondents admit the content of the statements alleged by Michael Newton to constitute the “threats”, but say that those words were not said in the context of Metcher asking, requesting or requiring of Fahour that Michael Newton be removed from his position as National Compensation Manager. In so far as they admit that the threats were conditional upon APC taking any action, the APC respondents only admit that they were conditional upon Fahour cancelling Project Dove.
The APC respondents denied the allegations in para 43 of the SFASoC that Fahour agreed with Metcher that APC would cancel Project Dove and remove Michael Newton from his position as National Compensation Manager.
Further in pleading Fahour’s reason for removing Michael Newton from his position as National Compensation Manager, the APC respondents say that during the course of the phone call on 5 February 2016, Metcher said to Fahour words to the effect that “[Michael Newton] had a personal zealotry to hurt injured workers the subject of Project Dove and that [Metcher] was angry with [Michael Newton]” and “that [Michael Newton] was the cause of problems that [Metcher] perceived with [APC’s] workers’ compensation function”. The pleadings of the APC respondents also state that during the phone call, Metcher expressed anger and volatility, including specifically towards Michael Newton.
The Facts
The only direct evidence of the conversation on 5 February 2016 between Fahour and Metcher was given by Fahour. Metcher was not called. At the time that he gave his evidence, Fahour was no longer employed by APC and was working as the Managing Director and CEO of a financial services company.
Fahour first commenced employment with APC in February 2010 in the role of Managing Director and CEO. That was the role he held at the time of the conversation with Metcher. Before dealing with the conversation itself, there are some background matters that Fahour and others gave evidence about which provide a relevant context.
APC utilised over 50,000 direct and indirect employees. It had, at the time, a 4 level management structure with about 10 people on an executive committee and a second layer of 30-40 managers at a management committee level. Walsh was at that level. There was a third level, the “senior leadership team” of about 200 managers, followed by a fourth level of some 1,000 managers. Michael Newton was at that fourth level. Whilst Fahour had regular contact with Walsh, he had no prior contact with or knowledge of Michael Newton before 5 February 2016.
Fahour deposed that in late 2013/early 2014, APC began to develop a reform program (“APC reform program”) designed to save thousands of jobs and APC’s business from looming significant financial loss. The APC reform program was designed to transform APC from being a letter delivery company to a parcel delivery company. It was described by Fahour as the largest reform in APC’s history. The Commonwealth Parliament approved the APC reform program in late 2015 and the implementation of those reforms began in January 2016.
Of the 30,000 or so employees directly employed by APC, Fahour deposed of his understanding that around 22,000 were members of the CEPU. The primary contact with the CEPU was through its National Secretary but contact on State-based issues occurred with other officials. In relation to New South Wales, where the largest number of employees of APC resided, the contact for him and APC was largely with Metcher.
Fahour described his understanding of Metcher as someone who had a very long history in the CEPU. He said that what struck him most about Metcher when he met him was that he almost had an obsession with the everyday employee, those at the bottom of the income pile, for whom he felt a special connection. Fahour considered that he had very professional dealings throughout most of the time he interacted with Metcher until the APC reform program began, when Metcher seemed concerned about how management was going about the path of reform. He described Metcher as “cynical”.
Fahour also felt that something happened in 2015 to Metcher which changed the nature of his interaction with APC. A number of communications were made by Metcher on “regular issues” in which Metcher seemed quite antagonistic and quite agitated. In about mid‑2015, Fahour was notified by the National Secretary of the CEPU that he would no longer deal with Metcher who was taking a leave of absence and Metcher “disappeared” for the second half of 2015. Fahour’s understanding of that absence was described by him as “a medical absence” which he later suggested was mental health related.
Fahour deposed that in late January 2016 he was conscious that pretty serious accusations were being made by Metcher about APC failing in its workers’ compensation unit. He was conscious of various communications forwarded by Metcher on the issue. Metcher became particularly involved in the case of Ms Leanne White (“White”), which he viewed as a “primary case study to what [was] occurring within the [APC] workers’ compensation department in how claims are being managed”.
From 22 January 2016 to 3 February 2016 email correspondence ensued between Metcher and senior executives at APC, including Walsh, in relation to alleged defects in APC’s workers’ compensation system, and concerns relating to White’s case. In that correspondence Metcher repeated an intention to publicly expose APC “in Canberra” in relation to those concerns and also the CEPU’s intention to commence legal proceedings.
It is in the context of this communication that Fahour emailed Walsh on 3 February 2016 at 9.16am requesting that she get together with Blake, Nick Macdonald, General Counsel and General Manager, Assurance (Corporate Centre) (“Macdonald”), Darryl Newton, Chief Risk Officer (“Darryl Newton”), Paul Burke, Corporate Secretary and General Manager, Government Affairs (“Burke”), Blee and Laz Cotsios, Group Executive, Business Services and “lay out the allegations” made by Metcher and propose a “very quick review”.
The communication emphasised the urgency of the matter, requiring the review to “begin on Friday (very important that it is documented as beginning this Friday)”. It stated that the questions “we need answered in the next 4 weeks” include the allegations made about workers’ compensation and payments, the current process for handling claims and any improvements that can be made, whether there is any basis in the White case and also the best process “to handle Union escalation and deal with issues…distracting the whole Organisation”. This “quick review” became what I will refer to as the “Leanne White Review”.
Although chronologically out of order, it is desirable to here set out the conduct and findings of the Leanne White Review.
The Leanne White Review was carried out by Darryl Newton, who chaired the committee and had management accountability for the performance of the Review, Roger Sweet, Senior Manager, Internal Audit, BRM Risk Management, an external audit firm, and Tim Lyon (“Lyon”), former Assistant Secretary of the Australian Council of Trade Unions (“ACTU”), who was engaged as an independent reviewer.
The review was to investigate two matters: first, the conduct of White’s workers’ compensation case, and second, to consider the management activities of the workers’ compensation unit. The review involved conducting interviews with ten APC personnel, including Blee and Michael Newton, interviews with White and Metcher, and the review of over 100 documents and over 200 emails. The final report was released on 20 April 2016 and was provided to a broader group of people, including Fahour, Metcher, Lyon and Michael Newton.
The report found that the management of her claim resulted in a “poor experience” for White and that she had experienced delays and errors, some of which resulted in “technical non‑compliance with procedural requirements under the [Safety, Rehabilitation and Compensation Act 1988 (Cth)]”, however none of which constituted a breach of that Act. The review found that all payments had been made to White and her sick and annual leave balances were correct and that there had in fact been a minor overpayment.
The report noted that the manner in which concerns had been raised by the CEPU “has often not been conducive to their resolution”, and that the “volume, tone, timing and escalation of communications, along with demands for sometimes unreasonable timeframes for responses and regular threats of external action has hindered the ability for the claim to be effectively managed”. The report further stated that this had also resulted in “significant negative personal impacts” to some APC staff.
Returning to events of 3 February 2016, Fahour agreed that he called for the Leanne White Review, in part, because Metcher was “ratcheting up his concerns” by raising his allegations with other union officials. Fahour said that he was concerned about the escalation of the issue and, in circumstances where APC was seeking to implement the APC reform program, the issue represented a “significant distraction”. Fahour considered that APC may learn something from studying White’s case to see if there were any wider implications.
Fahour’s decision to have a review of workers’ compensation practices occurred in the context that Fahour was aware that, before he joined APC and in 2009, APC’s injury management unit and workers’ compensation system was the subject of a Parliamentary review by the Senate. He described his understanding that that review had been preceded by a one-year campaign (presumably by the CEPU) which had made claims about failures in the way APC managed workers’ compensation. He said that APC had agreed “to a bunch of undertakings” in relation to the Parliamentary review. In that context and in January 2016, when allegations made by Metcher of failures in APC’s workers’ compensation unit were being received, Fahour deposed that he and Walsh were “concerned deeply” because APC had just received approval from the Senate for the APC reform program. Fahour said this:
And, of course, in the back of my mind, I was deeply concerned about that, so what then I tried to do, without making this thing bigger than Ben Hur, rather than boiling the ocean, as such – what I suggested to [Walsh] is this Leanne White case seems to be becoming much bigger than what it really seems, but maybe we can learn something from that case by studying it to see if there’s any wider implications. So we had developed, over time, this terms of reference to have a short, sharp review so that when I did face the Senate, I was in a position to be able to respond to the allegations if they were the case.
Earlier in his evidence, Fahour deposed that he had anticipated that the allegations that were being made by Metcher might find their way into the Senate estimates program and that he had suggested that APC had three or four weeks to prepare an answer to the allegations that he contemplated may be raised. That was a motivation for conducting the Leanne White Review and appears to have been the motivation for Fahour requiring, in his 3 February 2016 email, that the review be conducted urgently with answers “in the next four weeks”.
At 9.29am on 4 February 2016 Metcher sent a further email to Walsh, this time copying in Fahour, in relation to White’s case. In that email Metcher stated that he intended to present White and other sick and injured APC workers as examples of how APC treats its sick and injured workers and manages their claims, when in Canberra on the following Monday and Tuesday.
Later, on 4 February 2016, Metcher attended a meeting of the APC Workers’ Compensation Reform Forum via phone link from Sydney. Blee and Michael Newton were in attendance. It was at this meeting that Metcher informed Michael Newton that he was in possession of Project Dove documents. Michael Newton deposed that he told Metcher that he was happy to coordinate another meeting to discuss Project Dove to which Metcher laughed down the phone. Michael Newton deposed that Metcher’s comments caused a “flurry of activity” and a “sense of panic” at APC.
At 9.03am on 5 February 2016, Walsh sent an email to Metcher detailing how APC was taking proactive steps to address the complaints that he had been making regarding White, and noting that Metcher’s complaints about White and the workers’ compensation system generally were being taken seriously. In response to the email, at 10.48am Metcher emailed Walsh (copied to Fahour) stating that APC management and himself were “embroiled in a bitter brawl” over APC’s workers’ compensation management systems. He concluded the lengthy email by stating that “Operation Dove” had been leaked to him, and that Michael Newton had confirmed to him that it existed, and further “this is all I needed to know to what is occurring with the present [workers’ compensation] strategy and attack on sick and injured workers by [APC].” Metcher concluded the email with a threat of exposing APC. Fahour deposed that he hadn’t read this email.
At 11.54am on 5 February 2016 Fahour sent Metcher a letter attaching an explanation about the Leanne White Review and its Terms of Reference.
At 12.32pm, less than an hour after Fahour sent his letter to Metcher, Metcher emailed Fahour. He expressed his disappointment that the proposed Leanne White Review was only an internal review, during which “life goes on as normal”. He then added the following line:
In addition - Michael Newton’s ‘Operation Dove’!
Got to be kidding me.
The email was signed off by Metcher with: “Return to Sender”.
Fahour deposed that he read that email sometime between 12.32 and 2.17pm on the day it was sent. When he read it, he did not know who Michael Newton was. Nor did he know what “Operation Dove” was. He said that, at that time, he had never heard of “Operation Dove”.
At 2:17pm on 5 February 2016 Fahour forwarded the email he had received from Metcher to Walsh asking her “Who is Michael Newton and what is Operation Dove?”
Later that afternoon, and before Walsh had responded to Fahour, Metcher and Fahour spoke by phone. The call took place at some time between 2.17pm and 5pm.
Before recounting the evidence of the critical conversation between Fahour and Metcher on 5 February 2016, it is convenient that I express my reservations about the reliability of the evidence given by Fahour. In particular, those concerns attend the evidence Fahour gave about that critical conversation as well as the conversation Fahour later had with Walsh and the evidence given by Fahour as to what motivated the actions he took on 5 February 2016, including his decision to remove Michael Newton from his position.
In assessing the reliability of the evidence given, including that of Fahour, I have had regard to the following considerations conveniently collected by Wigney J in Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 at [307]-[309]:
[307]Witness demeanour is one consideration which may assist a judge to resolve conflicting evidence. Sometimes the demeanour of a witness while giving evidence about contentious issues may provide insight into whether the evidence given by the witness is either honest and reliable, or dishonest or unreliable. Signs that may indicate dishonesty or unreliability include evasiveness, nervousness, an apparent unwillingness on the part of the witness to make appropriate or obvious concessions and even, in some circumstances, overconfidence.
[308]Even where a witness displays such traits when giving evidence, however, some caution must generally be exercised. That is because a witness may, for example, appear nervous or evasive for reasons that have nothing whatsoever to do with the honesty or reliability of their evidence. Other witnesses may be able to give evidence in an appropriately confident and direct manner and yet their evidence may be found to have been unreliable or, worse still, dishonest. Witness reliability is not always a reliable signpost. Indeed, judges have often cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability based solely or mainly on the appearance of witnesses. Scientific research has also cast doubt on the ability of judges to tell truth from falsehood accurately on the basis of such appearances: see Fox v Percy(2003) 214 CLR 118 at [30]-[31] and the cases there cited.
[309]Aside from demeanour, there are other factors or considerations which may assist a judge in determining the credibility of a witness and the reliability of his or her evidence. Those considerations include: whether the witness has previously given an account of the events in question and, if so, whether that previous account is consistent or inconsistent with the evidence given by the witness; the plausibility and apparent logic of the events described by the witness; and the consistency of the account of the events described as compared with other objectively established events. Such considerations often turn out to be a much surer guide to the reliability of the evidence given by a witness about disputed events. As Atkin LJ observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The ‘Palitana’) (1924) 20 Ll L Rep 140 at 152; cited in Fox v Percy at [30]:
… I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.
The events Fahour gave evidence of occurred some two and three quarter years prior to him giving that evidence. It would be understandable if the detail of what was said and the detail of Fahour’s reactions and his own thought processes were lost or diminished by time. That is particularly so given that Fahour was a very busy CEO of a very large corporation and, it may be assumed, most of the events in question were not of much significance to a person in that position at the time they occurred. But my concern with Fahour’s evidence is not about any professed inability to recall the detail. To the contrary, most of Fahour’s evidence on these matters was given by a person who gave the impression that he mostly had very good recall. However, the evidence was so plagued with implausibility and contradictions, including that the same events were described differently from one day to the next, that it was clear to me that the detail of these events was often being reconstructed rather than being accurately recalled. Many of the inconsistencies are recorded in the submissions made by Michael Newton. I refer to some of those inconsistencies below. As will also be apparent shortly, there were direct and substantial inconsistencies between Fahour’s pleaded case and the evidence he gave about his critical conversation with Metcher on 5 February 2016. I have reached my view about the reliability of Fahour’s evidence without the need to rely on those inconsistencies. I accept, however, that in the absence of any attempt made to explain those inconsistencies (including, if it were relevant, some explanation as to why an explanation could not be given), Michael Newton was entitled to rely on those inconsistencies to impugn the reliability of Fahour’s evidence.
In my view, the evidence given by Fahour was peppered with speculative and often self-serving reconstructions of the detail of conversations and motivations, many of which are critical to the issues I need to determine. I do not reject all of Fahour’s evidence. Some of it I accept as reliable. To some extent documentary corroboration has assisted. In other respects, I have regarded some of the evidence as plausible. I have used the apparent logic of events as a strong guiding consideration in assessing the reliability of Fahour’s evidence. My general approach has been to only accept Fahour’s evidence where it is corroborated by other evidence or is sufficiently consistent with objectively established events for me to regard the evidence as plausible.
The references to the evidence which Fahour gave which now follow are not intended to necessarily suggest my acceptance of that evidence. So much of Fahour’s evidence which I do accept, and which is necessary for me to make findings about, will be set out later in these reasons.
Fahour’s evidence was that he was sitting in his car on the afternoon of 5 February 2016, possibly in Sydney, when he participated in the call with Metcher. He was not sure who called whom and he did not know how long the call lasted. His evidence was that White and the proposed Leanne White Review, Project Dove, Michael Newton and the APC reform process were all discussed. Fahour deposed that the majority of the conversation was about “the workers’ compensation system”. He said that Metcher was obsessively concerned about what he perceived to be the injustice in relation to White. Fahour then said that towards the back end of the call the conversation turned to Project Dove and Michael Newton. Given the importance of the conversation it is best that the account given in chief by Fahour be set out largely in full. For ease of reference I have emphasised some elements I consider to be most significant:
he – he raised once again – he said – and really he said, ‘You know, [Fahour], you know, you’ve gotten through the Parliament this reform program of yours and you’ve made all these promises about saving people’s jobs and it’s all about, you know, transferring them over and that’s what your intention – that you told them was, but here you are in the background working out how you’re going to hurt the most vulnerable of your employees and our members and those that are injured.’ And I said, ‘What are you talking about?’ He said, ‘Operation Dove.’ And I said – I said, ‘Is this a joke? What is Operation Dove?’ He said, ‘You know what it is.’ I said, ‘I have no clue. I haven’t heard what it is. You know, I – I tried to get hold of [Walsh] to find out and I have not been able to get an answer. So what are you talking about?’
And what did he say?---Well, he said, ‘You’re – I’ve got some slides and it shows that you’re planning, through this operation, to fire 3000 or so people so that you can save a tonne of money and you think by saving that money, you’re going to save [APC] but you’re going to do it on the back of the most vulnerable, injured, hurt people in the company. These are the posties, the staff members.’ He – and – and he said some, you know, some words against me.
Doing the best you can, what can you remember the words – about the words he used and what he said?---Well, when – when Mr Metcher is angry, his language can be quite vile and he was upset because he thought – he thought, and I might say completely wrongly, that I was somehow secretly plotting behind the scenes to – to – to fire the people that I have spent five years working on to help and support and to take care of. And he – he – he then said words to the effect, ‘You know, do you not have any morals? Do you have any values? How could you do this to these people? These are – these have given their heart and soul to the company and look what you’re doing to them’, blah, blah, blah, blah, blah. And then the first time, you know, he mentioned any other name – then he said – then the next person he went after was Catherine Walsh and he said, ‘I’ve worked with her for all these years and I can’t believe that she’s turning her back, as the head of HR, on these injured people.’
And did he mention anyone else from [APC]?---He mentioned very much in passing – and he said something to the effect, ‘And your henchman,’ something – some word to that effect, ‘Michael Newton’s doing all your dirty work for you in this analysis that I’ve got here or in these spreadsheets that I’ve got here or these slides,’ or something to that effect.
And did you say anything in response to that?---I said, ‘How can I have somebody doing my dirty work for me in the background when I don’t even know who he is?’ He said, ‘You know who he is. He’s done all this work for you.’
And I said, ‘I don’t.’ And then because he could see that I actually [sic] no answer, he then went back at that point to accusing [Walsh] and I of all sorts of accusations that, quite frankly, are a bit unfair and, well, that are wrong, but just not very nice.
Again, what can you recall about the words he used in making any accusations?---He was just really, really angry that we were lying, that we were deceiving the Australian people about our true intention of how we were going to save [APC]. He thought that we were going to fire and hurt the livelihoods of all these injured people who were the most vulnerable. He – he was deeply and emotionally – beyond anything I’ve ever seen in my life felt that he was the last man standing to take care of these 3000 people. And I said to him, ‘[Metcher], I remind you these are my staff and I don’t need you to tell me this point. I will take care of my own people.’
Can you recall anything else that he said during the call, anything else that you said to him?---I raised several times an opportunity to do this – this – the – a more thorough review about how we can do this, about how we can tackle the Workers’ Compensation review. And then, he said to me along the lines, you know, you –‘You’re about to launch this Operation Dove and I’m going to make sure that I expose you and all your staff for what you’re about to do.’ And I said to him, ‘I think you’re exaggerating, and there’s nothing going to occur about this because I don’t know anything about it.’ So he was very focused on – he thought there was something imminent that he had stumbled upon that we were about to do, and he couldn’t be further from the truth.
There is, however, another way in which the availability to APC of a contractual capacity to terminate the contract on providing notice of termination may be relevant in assessing the measure of damages where, on the counter-factual, the assessment of damages takes into account the future capacity to earn remuneration under that contract. APC’s capacity to terminate is a hypothetical future event of relevance just like other possible personal exigencies or contingencies which must be taken into account. The relevant question being would APC have exercised its capacity to terminate the contract and if so when? That approach has been taken or considered in a number of cases including Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101 at [83]-[84] (Gyles, Edmonds, and Greenwood JJ), Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381 at [117-123] (MacFarlan JA with whom Ward and Leeman JJA agreed) and Amann Aviation at 93 and 97‑8 (Mason CJ and Dawson J). The approach is not, in my view, confined to cases where damages are being assessed on the basis of a loss of a chance.
However, no submission was made by APC and no evidence was called to the effect that if APC had not breached the contract and, on the counter-factual, Michael Newton had remained employed by APC, APC would have exercised its right to terminate the contract on providing notice either at the time it did or otherwise, save that in contending for a discount for contingencies APC referred to the possibility of Michael Newton’s employment with it coming to an end.
I will return later to the issue of the appropriate discount for contingencies. I turn first to consider, on the counter-factual, the income Michael Newton would have likely earned under the contract. Under the counter-factual, I will assume that Michael Newton would have remained employed in the position of National Compensation Manager or in an alternative “suitable” position, although the assumption remains valid even if Michael Newton was placed into a position other than a “suitable” position so long as the remuneration in that other position remained commensurate with that likely to have been earned in the National Compensation Manager position.
Michael Newton’s claim for loss is based on 8.33 years of employment with APC from 11 August 2016 when the contract was terminated. APC’s submission did not specify the period Michael Newton would likely stay in employment with it on the counter-factual but that submission was based on the proposition that within no more than about 3 years and 9 months of August 2016, Michael Newton would have been in employment in which his income was commensurate with the income he would have earned at APC. For reasons I will further develop, I consider that assessment to be about right but would regard 4 years as a more likely time period by which Michael Newton’s income would reach the same level as it would have been if he had remained employed by APC.
I am of the view that even if Michael Newton remains unemployed as at the time of this judgment, it is likely that he will obtain remunerative employment commensurate with the remuneration payable for the National Compensation Manager position by August 2020 because, by this judgment, a very significant impediment to Michael Newton’s opportunity of obtaining such employment will be lifted. Michael Newton’s employment history prior to August 2016 demonstrates that he has not previously had difficulty finding employment and securing new job opportunities commensurate with his skills and specialist expertise. As I later record, Michael Newton made extensive efforts to find work between August 2016 and the date of the trial without any success. But I regard that as an aberration largely brought about by the circumstances in which he lost his employment with APC. He has not been able to obtain a reference from APC and he has been often required to tell potential employers that he was dismissed by APC for refusing a lawful and reasonable direction. It is likely that any potential employer seriously considering employing Michael Newton would want to know the basis upon which he left his prior employment and will be greatly concerned, if not put off entirely, by being told that APC terminated Michael Newton’s employment for the reason that APC gave. This judgment vindicates Michael Newton’s position and provides Michael Newton the opportunity of conveying to potential employers that APC bears responsibility for the loss of what the evidence persuades me was a very capable and highly performing employee.
On that basis, in considering the counter-factual, it is only necessary to work on the assumption, which I consider to be reasonable, that Michael Newton would have stayed in employment with APC in his contracted position or another position with the same remuneration for four years – that is to 11 August 2020. At that time Michael Newton will be a little less than 49 years of age.
Michael Newton’s annual salary when the contract was terminated was $187,480. Although it was contended that an allowance should be made for an increase in Michael Newton’s annual salary based on likely future promotions, there was no evidence about the likelihood of future promotions nor was the extent of any allowance contended for specified. I would not provide for any such allowance.
The evidence persuades me that Michael Newton is a very capable high performing employee. In the last full financial year in which he worked in the National Compensation Manager position (2014/15) he earned a bonus of $34,701. I consider it reasonable to assume that in each of the four years through to August 2020 Michael Newton would have continued to earn an annual salary of $187,480 and a bonus commensurate with the bonus earned in 2014/15 ($35,000) ie a total salary of $222,480 per annum and, over the four year period in question, a total of $889,920.
I accept that that total should be discounted for contingencies. The submissions were not particularly enlightening as to the appropriate rate at which that should be set. For the first 2.33 years post August 2016, Michael Newton contended that no discount should be made but that thereafter a discount of 30% should be allowed. I assume, although it was not explained, that that discount was based on the vicissitudes of life and that in the first 2.33 years to the date of the trial which was attended by a seemingly fit and healthy Michael Newton, there could be no suggestion for a discount of that kind. Michael Newton referred to the 25% contingency discount applied in Walker “to take account of the possibility of early termination for one reason or another” (at [84] and [87]) as indicative of the appropriateness of the discount suggested by him.
By its submission, APC contended that the appropriate discount for contingencies would be in the order of 50%. APC relied on the discount of 50% found to be appropriate in Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120. In that case, a Full Court (Allsop CJ, Mansfield and Siopis JJ) in reassessing the appropriate discount for contingencies increased the discount applied by the primary judge from 20% to 50%. As is apparent from the observations made at [142]-[146], the basis for the 30% uplift to the rate applied by the Full Court was the failure of the primary judge to take into account the casual nature of the counter‑factual employment as well as the particular vicissitudes of life at sea and the significant possibility that the employees concerned would find lengthy periods of separation unsustainable. None of the considerations upon which the 30% uplift was based are here relevant. In so far as I am assisted by the result in that case, it seems to me that that decision supports a discount rate of about 20%. However, I am not much assisted because in my view, primary attention must be given to the particular circumstances of the case in question.
APC contended that the evidence demonstrated that there was some turnover of managers at APC and that, despite there being no evidence of “mass redundancies”, the workplace was redolent with change including because alterations to roles and duties are not infrequent. However, the evidence referred to does not suggest anything other than the ordinary turnover of staff in a large employer like APC. It was further contended that Michael Newton’s employment may well have ceased either by reason of changes to his role, or by reason of his reaction to those proposed changes. The submission is unpersuasive. It is premised on Michael Newton being responsible for the loss of his employment in August 2016. I reject that premise for reasons previously addressed.
APC is a very large employer and as such its opportunity to provide its employees with ongoing employment is relatively large. I consider Michael Newton’s characterisation of APC as a large employer that offered “security and longevity” likely to be accurate. I rely as well on the evidence that, on average, employment at APC lasts 16 years. Furthermore, prior to the termination of his contract, Michael Newton had a record of stability in employment and family and financial responsibilities which suggest that he would be keen to maintain secure employment. Michael Newton struck me as a capable individual, well respected by his colleagues, hard working and the kind of person who would be well placed to enhance the security of his employment. There is nothing out of the ordinary to suggest that as an individual of less than 50 years of age in a managerial role, health or personal considerations would have impeded his ongoing employment through to August of 2020. In the circumstances, I consider that a 20% discount for contingencies should be applied.
The factual
Turning then to consider what I have called the “factual scenario”, there are known facts and yet unknown factors which need to be considered. At the time of the trial, evidence was received about Michael Newton’s earnings and his attempts to secure work.
Michael Newton has not been able to secure any full-time work since his employment was terminated by APC on 11 August 2016. Since then he has undertaken paid and unpaid consultancy work for two businesses and has been self-employed as a landscape gardener. He has earnt $22,366 through this work. The calculation of his earnings must also take into account the 3 months’ pay provided in lieu of notice by APC.
After the Removal decision and fearing that his employment at APC was at risk, Michael Newton first contacted a number of recruitment agencies in February 2016 and had weekly contact with those firms before the termination of the contract. Michael Newton provided the Court with a list of job positions that he had applied for commencing from February 2016 to the date of trial, and deposed that he was still searching for a job. The jobs that Michael Newton applied for were in the workers’ compensation, injury management and occupational health and safety fields. The majority of salaries for these positions ranged from $120,000 to $150,000, the lowest salary was $90,000 and the highest was $200,000. Doing the best I can to interpret Michael Newton’s comments on the list provided, he applied and was unsuccessful for approximately 31 positions and he made enquiries about approximately 28 other positions. Michael Newton also registered with approximately 15 recruitment agencies. Michael Newton deposed that in applying for positions he was often asked to provide the reason for leaving his position at APC and that he advised that his position was terminated due to not following a reasonable management request. Further, that many potential employers requested references and that he had attempted to secure references from his APC managers but that he did not receive any response to those requests. As at the date of the trial, a number of job applications were still pending.
Mitigation
APC was critical of Michael Newton’s conduct contending that he failed to mitigate his losses. The legal principles are not in contest. They are helpfully surveyed by Ross J in Whittaker at [169]-[176]. Subject to the reservation that each case must be determined on its own facts, the observations of Ross J were adopted by Nicholson J (with whom Gray and Sulan JJ agreed) at [139]-[140] of Regional Development Australia Murraylands and Riverlands Inc v Smith [2015] SASCFC 160. Those authorities support the following principles:
·the general rule is that an applicant is not entitled to recover damages for any loss that has in fact been avoided or could have been avoided by taking reasonable steps;
·the question of what steps are reasonable is a question of fact to be determined having regard to the particular circumstances;
·there is no onus on an applicant to show it has taken reasonable steps to mitigate loss, rather the onus is on the respondent to show that the applicant did not take reasonable steps and show the extent of the failure to do so;
·mitigation does not require an applicant to do what is unreasonable including to do things that present serious risks to the applicant’s interests;
·in employment cases, personal factors are likely to be of greater weight than in commercial cases; and
·it is not unreasonable to refuse an offer of employment where the level of remuneration or status of the position offered is less than that previously enjoyed by the applicant, but with the passage of time, it may be reasonable for the applicant to “lower their sights”.
APC contended that Michael Newton’s attempts to obtain employment are characterised by a lack of reasonableness. That was said to be so because Michael Newton focused almost exclusively on employment in the field of workers’ compensation or injury management in circumstances where he has post-graduate qualifications in finance, human resources and industrial relations. In that respect APC contended that Michael Newton had not been prepared to “lower his sights”.
That criticism must be rejected. The evidence that Michael Newton was prepared to “lower his sights” is manifest. The vast majority of positions that he applied for were positions well below the level of remuneration, and I would infer, level of status, of the position that Michael Newton previously enjoyed. The jobs applied for were in the fields of workers’ compensation, injury management and occupational health and safety. Each of those fields are wide and the large number of positions applied for (as well as Michael Newton’s registration with approximately 15 recruitment agencies) demonstrated that Michael Newton embarked upon a wide field of enquiry. Despite the fact that the field did not extend to finance, human resources and industrial relations (areas in which Michael Newton has some qualifications but no experience) does not in my view, demonstrate that the field of exploration chosen by Michael Newton was unreasonably narrow and that, in that respect, Michael Newton failed to “lower his sights”. In any event, I note that Michael Newton did work outside of his occupational field including by taking on landscaping work. The most cursory of factual comparison with the facts in Riverlands, where the employee there in question was held to have failed to “lower his sights” well demonstrates how far off the mark APC’s reliance on Riverlands is. In that case, the former CEO of a regional council only applied for four positions after his contract was repudiated in the 2 years and 4 months subsequent to the termination of his contract and did not lower his sights by applying for positions of a lower status or less remuneration to that which he previously enjoyed.
APC also contended that Michael Newton failed to mitigate his losses by refusing alternative positons offered to him by APC in the period after 5 February 2016. As only the MBII position was refused, I assume that the contention was confined to that position, although if reliance was also being made on the MPFS or MFWPA positions my conclusion would be the same. Although I doubt it to be the case, I will assume in favour of APC that a duty to mitigate loss exists at a time when that loss is merely prospective and whether it will eventuate is uncertain. Nevertheless, I reject APC’s contention that there was a failure to mitigate by any non‑acceptance of either the MBII, MPFS or MFWPA positions. As I have earlier discussed, there was nothing unreasonable in Michael Newton insisting on APC complying with its contractual obligations. Further, the duty to mitigate did not extend to requiring Michael Newton to do things that presented a serious risk to his own interests. Accepting a position that compromised his contractual entitlements would have, in the circumstance, likely to have been seriously adverse to Michael Newton’s interests.
The need for updating
To return more directly to the assessment of earnings on the factual scenario, it is also necessary to assess Michael Newton’s earnings after the trial and through to August 2020. As things currently stand, that assessment could only be made as a matter of judgment and degree on the basis of evidence that was current at the time of the trial. The unfortunate delay between that time and the present is long. It is likely that if the Court was updated with evidence of Michael Newton’s earnings and employment circumstances, the Court would be better able to assess with greater surety the quantum of Michael Newton’s loss because the assessment will more readily be able to be made on actual rather than assumed facts.
I am minded therefore, subject to hearing any objection if there be any, to receive evidence or preferably a statement of agreed facts which deals with Michael Newton’s earnings and his employments since trial. It would be better still if on the basis of that updating and my findings, the parties were able to agree the damages and any interest payable under s 51A of the Federal Court of Australia Act 1976 (Cth). A Registrar of the Court can be made available to mediate if that would be of assistance.
This course will be facilitated by directions I intend to make.
General Damages
Lastly, Michael Newton also claims $50,000 in general damages for pain and suffering. The claim was based on Michael Newton’s evidence that he had become withdrawn, had difficulty sleeping and suffered from isolation. I suspect that the claim was made principally in relation to Michael Newton’s statutory causes of action which have not succeeded. Nevertheless, the claim for general damages was also made under the contractual claim.
The claim must be rejected because Michael Newton is not able to claim damages for distress in relation to his breach of contract claim.
The general rule in relation to contractual breaches is that damages for anxiety, disappointment and distress are generally not recoverable, save for certain exceptions: Baltic Shipping Co v Dillon(1993) 176 CLR 344 at 361 (Mason CJ with whom Toohey and Gaudron JJ agreed). The rule in relation to those exceptions was detailed by Mason CJ in Dillon (at 365, with whom Toohey and Gaudron JJ agreed) as follows:
damages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation. In cases falling within the last-mentioned category, the damages flow directly from the breach of contract, the promise being to provide enjoyment, relaxation or freedom from molestation. In these situations the court is not driven to invoke notions such as ‘reasonably foreseeable’ or ‘within the reasonable contemplation of the parties’ because the breach results in a failure to provide the promised benefits.
It was not the object of the contract to provide Michael Newton peace of mind nor was Michael Newton physically inconvenienced. Even if I were to be satisfied that Michael Newton was distressed and that the distress flowed from the breach of contract, I would nevertheless find that no award for distress could be made. In support of his submission Michael Newton referred to Walker (at [91]), however, in that case the damage for distress was awarded in relation to Mr Walker’s statutory claim and not his contractual claim.
CONCLUSION
I have rejected all of Michael Newton’s statutory claims and, in particular, his claimed contraventions of ss 348, 355 and 340 of the FW Act and associated claims of accessorial liability.
Of the two contractual claims made, one (a breach of cl 1.1 of the contract) has succeeded but the other (an asserted breach of cl 10.4 of the contract) has failed.
In relation to the contractual claim that has succeeded, I have rejected Michael Newton’s claim of general damages for pain and suffering. I have upheld his claim of damages for loss of remuneration. The quantum of that loss is not yet fully assessed and I propose that the Court receive further evidence or an agreed proposal to enable that assessment to be finalised.
I will make orders to facilitate that course.
I certify that the preceding three hundred and seventy-one (371) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 23 December 2019
SCHEDULE OF PARTIES
VID 876 of 2017 Respondents
Fourth Respondent:
JAMES METCHER
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