Pettit v Evolution Mining Limited [No 2] - [2017] WADC 68

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: PETTIT -v- EVOLUTION MINING LIMITED [No 2] [2017] WADC 68

CORAM: MCCANN DCJ

HEARD: 19 APRIL 2017

DELIVERED : 25 MAY 2017

FILE NO/S: CIV 1816 of 2016

BETWEEN: PHIL PETTIT
Plaintiff
AND
EVOLUTION MINING LIMITED
Defendant

Catchwords:

Practice and procedure - Application to strike out statement of claim - Contract of employment - Alleged implied terms as to mutual good faith, trust and confidence and procedural fairness - Struck out as untenable - Allegation of unlawful termination for cause - Pleading is embarrassing - Leave to re-plead

Legislation:

Nil

Result:

Appeal allowed in part
Leave to re-plead claim for breach of express terms of the contract

Representation:

Counsel:

Plaintiff: Mr C Edwards
Defendant: Ms M Saraceni

Solicitors:

Plaintiff: Delta Legal
Defendant: Hopgood Ganim

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

Addis v Gramophone Co Ltd (1909) AC 488
Bednall v Wesley College [2005] WASCA 101
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 ALR 356
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 65; 104 ALR 1
Dare v Pulham (1982) 148 CLR 658
Electricity Generation Corporation v Woodside Energy Ltd (2004) 251 CLR 640
Foggo v O'Sullivan Partners (Advisory) Pty Ltd (2011) NSWSC 501
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Hancock Prospecting Pty Ltd v Wright Prospecting Pty (2012) 45 WAR 29
Intico (Victoria) Pty Ltd v Walmsley (2004) VSCA 90
John Holland Pty Ltd v Miami Gold (WA) Pty Ltd & Ors [2006] WASC 141
Kulkarni v Milton Keynes Hospital NHS Trust (2010) ICR 101
Neilson v City of Swan [2006] WASCA 94
Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784
Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405
Ramsey v Annesley College (2013) SASC 72
Rogan‑Gardiner v Woolworths Ltd [2010] WASC 290
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359
Walker v City Group Global Markets Pty Ltd [2005] FCA 1678; (2005) 226 ALR 114

MCCANN DCJ:

Introduction

In this matter the plaintiff claims damages for breach of contract allegedly arising from his dismissal as an underground mine superintendent. He contends that his dismissal and its antecedents breached express and implied terms of his contract of employment with the defendant (the Contract).
The defendant denies that the Contract included the alleged implied terms and further denies that it breached the express terms of the contract.
On 6 October 2016 Deputy Registrar Hewitt granted leave to the defendant to bring an application out of time and struck out the statement of claim. He held that there were no implied terms as alleged by the plaintiff and, further, based on the pleaded facts, the defendant did not breach the express terms of the Contract.
The plaintiff has appealed against the learned deputy registrar's orders.

This court's appellate jurisdiction

The appeal is brought pursuant to r 15 of the District Court Rules 2007. The appeal is a hearing de novo. It is not necessary for the plaintiff to demonstrate any error of law or principle in the decision of the learned deputy registrar.

Striking out pleadings – relevant principles

The defendant's application to strike out the statement of claim is made pursuant to O 20 r 19(1)(a) and (1)(c) of the Rules of the Supreme Court 1971 on the grounds that the statement of claim discloses no reasonable cause of action and/or would prejudice, embarrass or delay the fair trial of the action.
The first question to be determined is whether it would be open to the plaintiff upon the pleadings to prove facts at trial which would constitute a cause of action. (Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 [413]).
A plea will only be struck out as disclosing no reasonable cause of action if it is so obviously untenable that it cannot succeed, and great care must be exercised to ensure that a party is not improperly deprived of an opportunity to put its case at trial. (John Holland Pty Ltd v Miami Gold (WA) Pty Ltd & Ors [2006] WASC 141 [45] citing General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 130).
As a general rule, a plaintiff is entitled as of right to have his case heard, and to argue questions of law, at a trial based on the facts as found. It is only in cases where it can be seen from the outset that there is no basis for the legal conclusion contended for by the plaintiff that the statement of claim should be struck out.
A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action would lie. (Neilson v City of Swan [2006] WASCA 94 [18]).
However, the rule should not be reserved for those cases where argument is unnecessary to show the futility of the plaintiff's claim. Argument, even extensive argument, may be necessary to demonstrate that the plaintiff's case is so clearly untenable that it cannot possibly succeed.
Irrespective of the legal merits, a pleading should be struck out on the grounds of likely prejudice, embarrassment or delay of a fair trial because of textual shortcomings. Facts and causes of action must be clearly and, if necessary, distinctly pleaded to avoid embarrassment (John Holland Pty Ltd v Miami Gold Pty Ltd [45] citing Dare v Pulham (1982) 148 CLR 658, 664).

The pleaded facts

The plaintiff pleads that the Contract was entered into on 10 February 2014.
He commenced employment as an underground mine superintendent at the defendant's Pajingo gold mine near Charters Towers in Queensland on 12 February 2014.
Between 3 and 6 July 2015 a sequence of events occurred at the mine in relation to remote bogging 829 stope (the incident) which culminated in a stand down notice being issued to him. In other words, he was suspended on full pay.
From 6 to 11 July 2015 the defendant carried out an investigation into the incident and held meetings with the plaintiff. The plaintiff was given no more than 3.5 hours' notice of each meeting and was told that he must not leave Charters Towers. This had the effect, known and intended by the defendant, that he was geographically isolated and unable to access an advocate for, or during, the meetings. In particular:
(i)On 6 July 2015 he was approached by his supervisor, Craig Delaney, for an informal discussion without notice. At this meeting Mr Delaney informed the plaintiff that he was stood down.
(ii)On the morning of 7 July 2015 the plaintiff met briefly with representatives of the defendant. He was given approximately 30 ‑ 35 minutes notice of this meeting by way of a telephone call from Craig Delaney.
(iii)At approximately 4.30 pm on 7 July 2015 the plaintiff met with representatives of the defendant for approximately 30 ‑ 45 minutes. The plaintiff was given approximately 3.5 hours' notice of this meeting by way of an email from the defendant which he received at approximately 1.00 pm.
(iv)On 11 July 2015 the defendant met the plaintiff for approximately one minute for the sole purpose of informing him that his employment was terminated. The announcement was not part of the defendant's investigation or decision‑making process (that is, his termination was a fait accompli) and the plaintiff was given no opportunity to hear, challenge, examine or question any evidence relied on by the defendant.
On the same day (presumably at, or immediately after, the meeting) the defendant terminated the plaintiff's employment in writing.
The termination notice was signed by Mr Delaney and stated as follows:
Dear Phil
Termination Notice
I refer to the incident that occurred on Saturday 4 July 2015, whereby you failed to follow a directive given to you in relation to remote bogging 829 stope and subsequent meetings held with you, the last being on 8 July 2015.
We (Evolution) have now completed the investigation regarding the facts at hand. We have concluded that you failed to obey a statutory and reasonable direction given to you by your manager, the SSE/Acting General Manager. This is a serious and willful [sic] breach of your employment contract.
Evolution has a duty of care to our employees and its shareholders. This incident pose significant risk to the operation and hence its employees. Your actions in continuing unsatisfactory work performance could have had significant consequences.
In addition to the above, you received a final written warning on 17 December 2014 for breach of the Evolution Mining Code of Conduct, poor behaviours and not living the Evolution Values.
As a result of this, Evolution Mining is terminating your employment effective immediately in accordance with your employment contract (s3 ‑ Employment Obligations extract as follows):
You are required to;
3.Follow lawful and reasonable directions given to you by the company.
b)The Company takes a zero tolerance approach to any breach of these requirements. Failure to comply will render you liable to disciplinary action and could result in termination of your employment.
You will be paid 4 weeks' salary in lieu of notice and the balance of your accrued annual leave entitlement. You will receive payment in lieu of notice, and any outstanding accrued leave entitlements, which will be paid into your nominated bank account within 10 working days.
I would also like to take this time to provide you with the Employee Assistance Program which is available to you on … If you require anything further then please do not hesitate to contact … HR and Community Manager … .
The plaintiff pleads that the notice purported to terminate his employment 'for failing to obey a statutory and reasonable direction given by the SSE/Acting General Manager on 4 July 2015, being a directive given in relation to remote bogging 829 stope'.
The statement of claim then pleads (par 9):
There was no such failure on behalf of the plaintiff, and at no time did the plaintiff engage in performance‑related error, or make any other conduct or omission warranting dismissal.
The pleading that there was 'no such failure' is ambiguous. Does the plaintiff plead that a directive was given and it was complied with, or is he pleading that no such directive was given and, as such, there was no failure to comply? The plea is embarrassing, but amenable to correction.
The statement of claim then pleads that the termination of the plaintiff's employment occurred 'without cause'. This is embarrassing for two reasons. First, the termination apparently did occur for cause (disobedience) – the issue is whether such was lawful. Second, the Contract authorized the defendant to terminate the plaintiff's employment 'without cause' (see cl 15(b)). Either way, the sentence adds nothing to the facts and should be struck out.

The express terms of the Contract

The role of the court in construing a written contract is to identify the common intention of the parties as expressed in the written words. The ordinary rule of construction is that the intention is to be ascertained objectively from the point of view of what a reasonable person would have understood the words to mean in the circumstances. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. Ordinarily, this process is possible by reference to the contract alone, but the court is not obliged to construe it in a vacuum without regard to surrounding circumstances known to the parties. (Hancock Prospecting Pty Ltd v Wright Prospecting Pty (2012) 45 WAR 29 [75] (McLure P); Electricity Generation Corporation v Woodside Energy Ltd (2004) 251 CLR 640 [35] (French CJ, Crennan & Kiefel JJ)).
The Contract is set out in a letter comprising over 12 closely worded pages. There are 21 clauses. It is necessary to set out cl 3 and cl 4 in full.
3.Employment obligations
The primary objective of the Company is to be a safe, efficient and cost effective mining company and there is an expectation that every employee is committed to working with our management to achieve this objective. At our Company, great emphasis is placed on encouraging an environment where diversity of thought, respect for individuals and the building of positive relationships are cornerstone behaviours. Your willingness to contribute in a meaningful way to these ideals will form part of your relationship with the Company.
(a)You are required to:
i.perform the duties associated with the Position and other duties which you are capable of performing, as required by the Company;
ii.devote all of your time, attention and skill to the performance of your duties both during your work hours and at other times as reasonably necessary and perform your duties faithfully and diligently;
iii.follow lawful and reasonable directions given to you by the Company;
iv.make every effort to make the Company's production schedules and quality targets;
v.suggest improvements and apply efficient work practices to constantly achieve high quality performance;
vi.actively participate, create an efficient, highly productive and successful team;
vii.maintain and promote an open and communicative work environment;
viii.be flexible with respect to work practices and work patterns including:
•acquiring and applying knowledge and skills to operate the plant and equipment and undertake work tasks proficiently; and
•undertake work and duties within your skills, training and competence as directed by the Company.
(b)You, warrant that you will not engage in any employment, business enterprise or any other activity, which in the view of the Company conflicts with the interests of the Company or the duties and responsibilities of the Position.
(c)All information provided by you to the Company, including prior to employment, must be accurate and complete. The provision of incorrect information may result in disciplinary action including termination of employment.
(d)You must not give or receive any monetary payment, gift, benefit or personal favour or gratuity in, or in connection with, any business of the company except in any case involving items of a nominal nature or where it is authorised business related expenditure.
(e)The Company has a system of individual performance assessment which will be conducted at least annually and which you will be required to participate in as part of your employment.
(f)During your employment, you must not, without our prior written consent:
i.act as an officer or employee of, or act as a consultant or advisor to any other corporation, firm, organisation or person;
ii.take up any position with any other corporation, firm or organisation (whether paid or unpaid); or
iii.hold any shares or securities which create or may create a conflict of interest.
4.Safety, health and environment
(a)You are required to perform work in a safe manner and in accordance with health and safety and environmental laws. Your obligations include that you must:
i.actively participate in consultation in the workplace;
ii.comply with all policies, guidelines, instructions, legislation and regulations with respect to safety, health and environment;
iii.take reasonable care for the health and safety of people who are in the workplace and who may be affected by your acts or omissions at work;
iv.avoid conduct that is reckless or may cause death or serious injury to any person to whom you owe a duty relating to health, safety and welfare at work;
v.cooperate with the Company and its employees or any other person so far as is necessary to enable compliance with any requirement that is imposed on the Company in the interests of health, safety and the environment;
vi.report all incidents and other relevant information regarding safety issues including near misses, errors and hazards to safety; and
vii.report all pollution incidents that you become aware of including providing all relevant information as required.
(b)The Company takes a zero tolerance approach to any breach of these requirements. Failure to comply will render you liable to disciplinary action and could result in termination of your employment.
(c)The Company may require you to undertake medical tests or examinations from time to time as deemed appropriate in its discretion and at its const. This may include, without limitation, blanket and random drug and alcohol or physical capability tests, and you must make the results available to the Company.
I pause to make some observations about these provisions.
The preamble to cl 3 sets out the objectives of the company and hence the Contract, which are relevant to its construction. But the objectives are also described as 'ideals' and are couched in such abstract and general terms as to confer very little, if anything, in the way of contractual obligation on either party. That process is to be found in cl 3(a) – (f) and in cl 4. Amongst other things, those provisions impose affirmative obligations on the plaintiff to perform his duties 'faithfully and diligently', to be 'open and communicative' and 'accurate and complete' in furnishing information to the defendant, and to act in a quasi-fiduciary fashion by eschewing unauthorized personal benefits and conflicts of interest.
In a similar vein, cl 17 imposes post‑employment restrictions upon the plaintiff, cl 18 contains extensive provisions relating to confidentiality and the protection of intellectual and moral property rights and cl 19 relates to the parties' privacy obligations.
In my opinion cl 4(b) deems the requirements set out in cl 4(a) to be fundamental terms of the Contract, particularly when read in conjunction with the provisions relating to disciplinary action and termination, to which I now turn.
Clause 14 and cl 15 provide as follows:
14.Suspension and disciplinary action
(a)If the company forms the view that your conduct, capacity or performance may warrant serious disciplinary action (including termination of your employment), the company may suspend you from duty with pay or direct you to perform work in a different position, and in the outcome of an investigation.
(b)The Company may initiate disciplinary action against you, including for unsatisfactory performance or misconduct. Without limitation, disciplinary action may include changes to working arrangements, re‑deployment, demotion or termination of your employment with or without notice. The Company may alter your duties and/or reduce your remuneration in association with any disciplinary action.
15.Termination of employment
(a)The company may terminate your employment without notice where you:
i.engage in a serious breach of company policies and procedures;
ii.engage in serious misconduct;
iii.are seriously negligent in the performance of duties, including by being absent without authorisation;
iv.commit a serious or persistent breach of this agreement;
v.commit an act, whether at work or otherwise, which brings the company into disrepute; or
vi.are charged with/convicted of an offence punishable by imprisonment.
(b)After the probationary period, the company or you may terminate your employment at any time by giving at least four (4) weeks' notice. …
(c)If the company or you give notice of the termination of your employment, the company may, at its discretion:
i.direct you not to attend work or to perform limited or no duties for any part of your notice period; and/or
ii.pay you in lieu of your notice period or require you to work for part of your notice period and pay you in lieu of the balance of that period. The company will calculate any payments in lieu of notice or accrued leave in accordance with applicable law.
(d)…

Clause 14(a) relates solely to the suspension of the plaintiff's employment. In other words, it abrogates the defendant's contractual obligation to provide the plaintiff with work, but subject to three conditions as follows:
(i)First, that the defendant had actually formed a view that the plaintiff's conduct, capacity or performance may warrant serious disciplinary action. For present purposes I proceed on the basis that any 'view' formed by the defendant needed to be genuinely held;
(ii)Second, the defendant had initiated an investigation for the purpose of determining whether serious disciplinary action was warranted;
(iii)Third, any period of suspension was limited to the duration of the investigation.
Further, pursuant to cl 14 and cl 15, the outcome of the investigation and the initiation of disciplinary action are not necessarily the same things. The former predicates the exercise of investigatory functions and the formation of opinions and findings. The latter predicates the taking of particular action based on the opinion or findings.
The disciplinary actions provided for in cl 14(b) include termination with or without notice. In my opinion this overlaps with, but is not coterminous with, the provisions of cl 15(a) (which specify six particular forms of serious misbehaviour that permit termination for breach), and cl 15(b) which permits either party to terminate on the giving of one month's notice.

The pleaded implied terms

The plaintiff pleads (par 4) that the following terms were implied in the Contract:
(i)A term, implied in fact, that the parties would maintain mutual trust and confidence, and not do anything likely to destroy or seriously damage the relationship of trust and confidence, without proper cause for doing so.
(ii)A term that the parties would act in good faith and fair dealing towards each other.
(iii)A term that the plaintiff was entitled to procedural fairness in relation to the termination of his employment.
At face value pleaded term (iii) only directs attention to the circumstances of 'the termination' of the plaintiff's employment referred to at [17] – [20] above. However, during submissions it became apparent that the plaintiff contends that he was entitled to procedural fairness (and was denied the same) in relation to the investigation as well as the termination.

Alleged breach of the Contract

The statement pleads that the defendant breached the Contract in two ways.
First, by par 10(a), it is contended that the defendant terminated the Contract 'without lawful grounds'. As I construe it, this contention relates to the events referred to at [17] – [20] above relating to the actual termination on 11 July 2015. In short, it is contended that the defendant had no contractual basis to terminate the Contract.
Second, by par 10(b), it is contended that by reason of the matters referred to at [14] – [16] above (i.e., the defendant's conduct of the investigation and the meetings), the defendant breached the implied terms pleaded in par 4.

The general law relating to the implication of contractual terms

The requirements which must be met in order to imply a term in fact into a contract which is complete on its face were set out in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, 283 and have been consistently cited ever since:
(i)the term must be reasonable and equitable;
(ii)it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
(iii)it must be so obvious that it 'goes without saying';
(iv)it must be capable of clear expression; and
(v)it must not contradict any express term of the contract.
Mr Edwards submitted that there has been 'substantial clarification of the law as to implied terms' in the decades that followed the Privy Council's decision in BP Refinery. There has certainly been a considerable body of case‑law around the subject, but in my opinion the law has remained stable and clear. Categories of cases and terms have evolved which are helpful to jurists, but little, if anything, of principle has changed since 1977.
In Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 ALR 356 [28], [29], French CJ, Bell & Keane JJ said:
An implication in law may have evolved from repeated implications in fact. As Gaudron and McHugh JJ observed in Breen v Williams (1996) 186 CLR 71, some implications in law derive from the implication of terms in specific contracts of particular descriptions, which become 'so much a part of the common understanding as to be imported into all transactions of the particular description' (1996) 186 CLR 71, 103, quoting Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 449 per McHugh and Gummow JJ. The two kinds of implied terms tend in practice to 'merge imperceptibly into each other': (1996) 186 CLR 71 at 103, quoting Glanville Williams, 'Language and the Law – IV' Law Quarterly Review, vol 61 [1945] 384, p 401. That connection suggests, as is the case, that the 'more general considerations' informing implications in law are not so remote from those considerations which support implications in fact as to be at large. They fall within the limiting criterion of 'necessity', which was acknowledged by both parties to this appeal. The requirement that a term implied in fact be necessary 'to give business efficacy' to the contract in which it is implied can be regarded as a specific application of the criterion of necessity. The present case concerns an implied term in law where broad considerations are in play, which are not at large but are not constrained by a search for what 'the contract actually means'.
In Byrne v Australian Airlines Ltd, McHugh and Gummow JJ emphasised that the 'necessity' which will support an implied term in law is demonstrated where, absent the implication, 'the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined' ((1995) 185 CLR 410 at 450) or the contract would be 'deprived of its substance, seriously undermined or drastically devalued': (1995) 185 CLR 410 at 453.

The alleged implied terms – submissions and findings

It is convenient to address pleaded terms (i) and (ii) together. These would import mutual obligations of trust and confidence, good faith and fair dealing between the parties.
Mr Edwards submitted that the common law has evolved to the point where the implication of such terms is a generally accepted feature of contracts of employment.
That submission was definitely supported by authority until the decision of the High Court of Australia in Barker. For instance, in Rogan‑Gardiner v Woolworths Ltd [2010] WASC 290, the Supreme Court of WA (Hall J) held ([112]) that the 'necessity for there to be trust and confidence between an employer and employee is a basic component of an employment contract' and that a term is regularly implied for that purpose. The court later referred ([116]) to this term as 'an implied term of good faith'. In other words, the expressions 'trust and confidence' and 'good faith' are interchangeable.
However, the court further held ([125]) that the implied term only applies during the currency of the employment and does not apply to a dismissal or the manner of the dismissal. This was said to be so because ([116]):
The purpose of the good faith term is to ensure the effectiveness of the working relationship between an employer and employee ... [which would be] fundamentally inconsistent with the termination of the relationship.
Further, Hall J referred to a number of authorities including another decision of the Supreme Court of Western Australia, namely Bednall v Wesley College [2005] WASCA 101. Thus par 10(b) of the statement of claim only relies upon matters antecedent to the termination of the Contract as breaching pleaded implied terms (i) and (ii).
Rogan-Gardinerand all similar Australian authorities were over-ruled in Barker's case. The High Court unequivocally held that an implied duty (i.e., term) of mutual trust and confidence cannot be supported under Australian law. The plurality (French CJ, Bell & Keane JJ) distinguished authorities from the United Kingdom on the ground that the general law in that jurisdiction developed in a different statutory context from Australia, and held that the implication of the alleged duty (term) was not necessary to give business efficacy to employment contracts. In this respect the plurality pointed out ([29]) that what is reasonable is not, on that account alone, necessary. Their Honours pointed out ([30]) that employment contracts have attracted a number of implied terms in the course of the evolution of employment relationships, and all such terms are subject to the express terms of the particular contract and any relevant legislation. Their Honours referred to a number of examples, including an employee's duty of fidelity.
For completeness, I note that the plurality referred to the term 'trust and confidence' throughout their reasons (as did the other members of the court: Keifel & Gageler JJ) without using the term 'good faith', save for a passage ([42]) in which their Honours said that their
conclusion should not be taken as reflecting upon the question whether there is a general obligation to act in good faith in the performance of contracts, since that question was not before the court.
As I construe that passage, the court used the term 'good faith' interchangeably with 'trust and confidence', as the Supreme Court did in Rogan-Gardiner. Thus, the outcome in Barker applies to pleaded terms (i) and (ii) in this matter, is binding and conclusive.
For completeness, I am satisfied that the pleaded facts and circumstances of this case are not materially distinguishable from Barker's case.
Furthermore, I am not satisfied that the criteria for the implication of terms set out in BP Refinery are satisfied. The express and other implied terms of the Contract are extensive. They meticulously set out the defendant's requirements of the plaintiff and, thus, the boundaries of the defendant's rights and powers. They also require the defendant to provide the plaintiff with work, save for good cause, and a safe system of work.
The plaintiff had remedies if the Contract was breached by the defendant, including damages or termination or both. The contention that the plaintiff's enjoyment of his rights under the Contract would be nugatory, worthless or seriously undermined or devalued, in the absence of pleaded terms (i) and (ii), is untenable.
This conclusion is demonstrated by the absence of any need for mutuality of obligation. If the plaintiff's contention is correct he could not terminate for purported breach by the defendant without acting with good faith himself. I am unable to conceive how the presence of such an obligation in the Contract could be seen as essential.
Accordingly, I hold that the allegation that the Contract included pleaded terms (i) and (ii) is untenable at law and the learned registrar correctly struck out the pleadings that are predicated upon them.
I turn now to pleaded term (iii). Again, at face value, the plaintiff's argument is foreclosed by authority. It is unequivocally settled in the common law that the rules of procedural fairness (i.e., natural justice) must be observed by those who make judicial or public administrative decisions which affect the rights, interests, livelihood and reasonable legal expectations of others, but there is no like obligation upon an employer who dismisses an employee. The employer is not bound to act reasonably, afford the employee an opportunity to be heard or give reasons. Indeed, an employer can act entirely capriciously. The legality of a termination of a contract of employment must be informed by the contractual terms, but no term such as pleaded term (iii) is implied by law. (Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 433; Intico (Victoria) Pty Ltd v Walmsley (2004) VSCA 90 [17], [27], [29]).
Furthermore, at common law a wrongfully dismissed employee cannot recover damages for the harsh and humiliating manner of his dismissal. (Addis v Gramophone Co Ltd (1909) AC 488; Intico [28]).
Finally, at common law an employer is entitled to rely upon contractual grounds for termination that were not even known or raised by the employer at the time of dismissal. It follows that a termination could occur in circumstances which ignored the tenets of procedural fairness. (Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359; Intico [3]).
I turn now to consider whether the implication of pleaded term (iii) is arguable on the basis of the pleaded facts, including the terms of the Contract.
Mr Edwards principally relied upon the reasonableness of the term and the effect of cl 14(a) which, he submitted, predicated that an investigation would be carried out prior to the taking of any serious disciplinary action. He submitted that there would be no purpose in having a specific provision relating to an investigation if that provision was not intended to limit the right of the employer to terminate.
In the light of that construction, Mr Edwards submitted that pleaded term (iii) must be implied in order to give efficacy to this aspect of the Contract; otherwise the investigative provision would be nugatory. He relied on three authorities, namely Foggo v O'Sullivan Partners (Advisory) Pty Ltd (2011) NSWSC 501; Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784; Ramsey v Annesley College (2013) SASC 72. I say immediately that those cases do not assist his argument because they relate to causation and damages (for loss of a chance), rather than breach.
Ms Saraceni submitted that the plaintiff's construction of cl 14(a) is wrong and the power to investigate, and the manner of any investigation, are entirely unilateral prerogatives of the defendant. In support of this argument she referred to Kulkarni v Milton Keynes Hospital NHS Trust (2010) ICR 101.
Ms Saraceni submitted that the implication of pleaded term (iii) did not meet the requirements set out in BP Refinery, particularly having regard to the express provisions of cl 14(b) and cl 15. She submitted that those provisions were not nugatory or ineffective in the absence of the implied term.
I accept Ms Saraceni's submissions and find that the implication of pleaded term (iii) is not arguable either at law or in fact having regard to the pleaded facts and the terms of the Contract.
The only contractual provision relating to the carrying out of an investigation is contained within cl 14(a). That provision solely relates to the suspension or temporary redeployment of the plaintiff pending an investigation (if any) into whether his 'conduct, capacity or performance may warrant serious disciplinary action'. It does not confer any rights upon the defendant in relation to the termination of the plaintiff's employment. Those provisions are contained in cl 14(b) and cl 15 which, amongst other things, permit the termination of the employment for performance-related cause summarily and/or with notice (or a monetary sum in lieu). There is no mention of any investigation. In my opinion, it is not arguable that the defendant was obliged to conduct an investigation before terminating the plaintiff's employment. Such was only a condition of suspension or temporary redeployment.
Furthermore, on its true construction 'the investigation' referred to in cl 14(a) means a unilateral investigation carried out at the discretion of the defendant and on the defendant's terms; it does not mean a 'hearing' in the dispute resolution sense. In the light of that construction, the Contract (in particular cl 14 and cl 15) is complete and effective and the implication of pleaded term (iii) is not essential.
In conclusion, I am satisfied that:
(i)It is possible to definitively construe the Contract in the light of the pleaded facts.
(ii)On its true construction the suspension and termination provisions of the Contract are clear and effective and it is not necessary to imply pleaded terms (i), (ii) or (iii) in order to render them effective. Nor is the same mandated by common law.
(iii)The learned deputy registrar correctly held that the implication of pleaded terms (i), (ii) and (iii) is not arguable and correctly struck out those parts of the statement of claim that rely on those terms.
But that is not the end of the matter, as the learned deputy registrar struck out the entire statement of claim. I turn now to address the balance of the pleading.

Wrongful termination for breach of an express term

In par 10(a) of the statement of claim the plaintiff pleads that he did not breach the Contract in that he did not engage in any performance‑related misconduct. That allegation cannot be dismissed on the pleadings and, subject to the issue of the plaintiff's remedy, should not have been struck out.
Mr Edwards submitted (and seeks to plead) that the plaintiff suffered damages of a type different to loss of salary and, as such, the defendant's payment in lieu of notice did not exhaust his remedies. In particular, the plaintiff contends that he lost the chance to retain his employment and avoid damage to his professional reputation.
The argument runs thus. If the defendant had not elected to rely (wrongly, as is alleged) upon termination for cause (i.e., a performance-related breach of the Contract) there was a real and not speculative chance that the plaintiff's employment would not have been terminated by the giving of notice. As such, it is argued, it is not decisive of the remedy question that the plaintiff could have terminated on notice (and made a payment in lieu of notice).
In my opinion, as a general rule an argument of that kind is foreclosed by principle. Pursuant to the so-called 'least burdensome' principle, 'where a contract is simply terminable on notice ... damages may in general only be claimed for wages and other benefits lost over the relevant period of notice' (emphasis added; see Walker v City Group Global Markets Pty Ltd [2005] FCA 1678; (2005) 226 ALR 114, 182).
However, this principle is in reality a recognition of a general or common fact or circumstance, namely the inevitability of a contractually valid termination. The so‑called 'principle' predicates 'the pre‑destination of the outcome' and 'cannot be applied mechanically in every case'. (See Walker (182 – 187) citing, inter alia, Commonwealth v Amann AviationPty Ltd (1991) 174 CLR 65; 104 ALR 1).
Based upon the case law and the pleadings and documents referred to therein, the plaintiff's argument is not strong. But it is essentially a factual matter, and the law is not unequivocally against it. In my opinion the claim cannot be resolved on the pleadings or without potentially stifling the development of the law.
Accordingly, subject to remedying the pleading problems referred to at [21] and [22] above, I am satisfied that the claim pleaded in par 10(a) of the statement of claim is not untenable and should not be struck out.

Conclusion

In my opinion the pleaded claim reliant on par 10(b) of the statement of claim is untenable and should be struck out. The balance of the statement of claim is arguable, but there are textual problems that must be corrected.
In my opinion the appeal should be allowed in part and the plaintiff given leave to partially re-plead the statement of claim.