Pettit v Evolution Mining Limited

[2016] WADC 147

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   PETTIT -v- EVOLUTION MINING LIMITED [2016] WADC 147

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   23 SEPTEMBER 2016

DELIVERED          :   6 OCTOBER 2016

FILE NO/S:   CIV 1816 of 2016

BETWEEN:   PHIL PETTIT

Plaintiff

AND

EVOLUTION MINING LIMITED
Defendant

Catchwords:

Practice and procedure - Strike out application - Implied term in employment contract - Whether applicable to termination

Legislation:

Nil

Result:

Statement of claim struck out

Representation:

Counsel:

Plaintiff:     Mr Edwards

Defendant:     Ms Saraceni

Solicitors:

Plaintiff:     Delta Legal

Defendant:     Hopgood Ganim

Case(s) referred to in judgment(s):

Commonwealth Bank of Australia v Barker [2014] HCA 32

1. DEPUTY REGISTRAR HEWITT: On 12 July 2016 the defendant to this action brought an application seeking to strike out the whole, or alternatively parts, of the plaintiff's statement of claim. The grounds upon which the defendant relies in that application are firstly to O 20 r 19(1)(a) Rules of the Supreme Court 1971 that the statement of claim discloses no reasonable cause of action or alternatively that pursuant to O 20 r 19(1)(c) the statement of claim will prejudice, embarrass or delay the fair trial on the action.

2. Without going into the details I would broadly categorise the plaintiff's claim as being one in which he claims damages for unfair dismissal.  The basis upon which that claim is mounted is a proposition contained in par 4 of the statement of claim that the employment contract between himself and the defendant contained clauses which broadly speaking required the parties to act in good faith and deal fairly with each other.  Those terms are said to be implied into the contract by virtue of various other provisions in the contract which are identified in par 4(c), namely cl 3(e), 4(c) and 14.  The contract is before me as an exhibit to the affidavit of Josephine Satina Hart sworn 12 July 2016 and is exhibit 15 to that affidavit.

3. Paragraph 3 of the contract commences with a recital of the general objectives of the company which perhaps I might characterise as a mission statement since it contains nothing in the way of contractual obligations but sets out the ambitions which the defendant brings to the contractual relationship.  Paragraph 3(a) sets out a series of requirements which the defendant expects the plaintiff to observe in his role as an employee and again are very general in their nature.  Paragraph 3(e) refers to the fact that the company has a system of individual performance assessments which will be conducted at least annually and in which the plaintiff would be required to participate.  The final paragraph concerns disciplinary action.

4. In truth I see very little and quite possibly nothing at all within the quoted paragraphs which would have the effect of creating the implied terms contended for in the statement of claim.  Notwithstanding that reservation, I now continue to analyse the statement of claim.  Rather inscrutably, in par 7 the statement of claim refers to a sequence of events which culminated in the plaintiff being issued a stand down notice by the defendant.

5. Paragraph 8 refers to a number of meetings which were held between the plaintiff and the defendant as a consequence of the investigation of the incident which led to the stand down notice being issued.  It is said that the plaintiff was given little notice of those meetings, did not have the opportunity to engage an advocate to represent him and was not given an opportunity to challenge, examine and question the evidence relied upon by the defendant.  The statement of claim then goes on to say that on 11 July 2015 the defendant terminated the plaintiff's employment.  It is common ground that in such termination the defendant gave the plaintiff four weeks' pay in lieu of notice.  When one refers to the contract of employment, it can be observed that at par 15(b) there is a provision which allows either the plaintiff or the defendant to terminate the employment contract on giving four weeks' notice or, in the case of the defendant, to terminate the contract on giving payment in lieu of such notice.

6. The critical paragraph in the statement of claim is par 9 which in effect says that the defendant terminated his employment on the basis of a failure to comply with a reasonable direction when in fact there was no such omission.

7. In par 10 the plaintiff pleads that the defendant breached the employment contract by wrongfully dismissing the plaintiff and thereby terminating the employment contract without lawful grounds of doing so.  That paragraph is so vague as to being offensive and in my view should not be permitted to remain in any statement of claim.  Finally, it is said that the contract was breached by failing to observe the implied terms earlier pleaded, the breach occurring by reason of the plaintiff not being given a proper opportunity to answer the accusations levelled against him.

8. As I understand the law that one of the considerations which is relevant to whether or not a court would imply a term in a contract is whether or not that term is in conflict with an express term of the contract.  In the present case, clearly the proposed implied term is in conflict with the express terms of the contract.  The contract provides that either party may terminate the contract by giving four weeks' notice.  The statement of claim effectively seeks to diminish or even negate the effect of that term by saying in the circumstances of this case even if the defendant had the right to terminate the employment contract, it was improper of it to do so by virtue of the implied terms which are characterised in par 4 of the statement of claim.  The issue becomes quite interesting.  I would have thought it tolerably clear that the motivation by the defendant in terminating the contract was its perception of the failure of the plaintiff to carry out his employment duties in a satisfactory way.  Nonetheless, the termination, although probably motivated by that perception, was in the terms provided by the contract, namely by the giving of four weeks' notice or pay in lieu thereof.  I have some difficulty in understanding how the plaintiff's cause of action can be soundly based in those circumstances unless it can be shown that there is some line of authority which supports the implication relied upon by the plaintiff.

9. It is conceded by the plaintiff that the decision of Commonwealth Bank of Australia v Barker [2014] HCA 32 puts to rest the notion that terms of good faith and mutual trust are implied into employment contracts in relation to the termination of the contract itself. Such terms can however exist and regulate the conduct of the parties whilst the contract is ongoing.

10. The proposition advanced by the plaintiff that the implied term as pleaded existed in respect of the plaintiff's contract of employment and regulated the manner in which the defendant was required to behave in investigating a complaint regarding the plaintiff performance of his contractual duties. It is said that the defendant, in its investigation, breached the implied terms and reached conclusions adverse to the plaintiff and those conclusions led it to terminate his contract.  Those breaches are said to be the basis upon which damages (presumably substantial damages) are claimed.

11. The difficulty I have with the reasoning is that the defendant was not dismissed for misconduct, he was dismissed under the provisions of the contract permitting the plaintiff to do so on giving four weeks' notice or payment in lieu.  Furthermore the damages claimed arise from the dismissal not the findings on investigation (whatever they were).

12. The Barker case has established that implied terms of fairness and good faith are not relevant to the termination of contracts of employment.  To my mind that is the end of the matter.  To argue that an investigation was conducted unfairly and that was the motivation which led the defendant to dismiss the plaintiff is not to the point.  The defendant as a matter of law, had an unfettered right to dismiss the plaintiff providing it did so within the compass of the contract.  The proposition that the right was in some way restricted by implied terms, as is the proposition advanced by the plaintiff, is in my view unsustainable.

13. This application is late by some 21 days however in light of my view that the statement of claim does not set out a reasonable cause of action I shall extend the time within which the application may be brought.  The orders I propose are that the time to bringing the application is extended and the statement of claim is struck out.