CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - CONTRACT IMPLIED FROM CONDUCT OF PARTIES
EMPLOYMENT LAW - CONTRACT OF SERVICE - TERMS OF CONTRACT - IMPLIED TERMS
EMPLOYMENT LAW - TERMINATION AND BREACH OF CONTRACT - GROUNDS - MISCONDUCT - GENERALLY
EMPLOYMENT LAW - TERMINATION AND BREACH OF CONTRACT - REMEDIES - AGAINST EMPLOYER
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT - GENERAL
Ms Ramsey was employed by Annesley College as Head of Boarding from 2003 under formal employment contracts executed in 2002 and 2005. In mid 2009, there were discussions concerning a further three or five year contract after expiration of the current contract in January 2010. The discussions were confirmed, to an extent, by letters from Annesley to Ms Ramsey. There was discussion about preparation of a formal contract. Ms Ramsey contends and Annesley denies that by the conversations or letters or by their conduct the parties entered into a three or five year contract of employment. Ms Ramsey continued to be employed by Annesley beyond the 31 January 2010 expiration of the 2005 contract. Annelsey accepts that an implied contract arose but for no fixed term and terminable on notice.
In November 2009, the Deputy Head of Boarding made a complaint about Ms Ramsey’s conduct. Annesley conducted an investigation subsequently expanded to encompass other allegations about Ms Ramsey’s conduct. Ms Ramsey contends that Annesley breached the implied term of mutual trust and confidence (and another alleged implied term) in the conduct of that investigation.
In March 2010, Annesley purported to dismiss Ms Ramsey summarily on the ground that she was guilty of serious misconduct. Ms Ramsey contends that Annesley had no grounds for summary dismissal and thereby breached and repudiated the contract. She also contends that Annesley dismissed her for an ulterior motive of saving expenses.
Ms Ramsey claims damages comprising 12 weeks’ remuneration, loss of the opportunity to remain at Annesley, loss of the opportunity to gain employment elsewhere in the teaching profession, mitigatory expenditure and damages for distress.
HELD:
1. The parties did not enter into a three or five year contract in 2009 or 2010 (at [143]-[176]).
2. The parties by their conduct entered into a contract of employment for no fixed term, terminable on 12 weeks’ notice, with effect from 1 February 2010 (at [177]-[187]).
3. It was not a term of the contract that Annesley would comply with its Complaints Policy (at [193-[209]).
4. Annesley did not breach the implied term of mutual trust and confidence in the conduct of the investigation (at [337]-[369]).
5. Annesley did not dismiss Ms Ramsey summarily acting under an ulterior motive of reducing expenses (at [370]-[378]).
6. Ms Ramsey was not guilty of misconduct. Annesley had no grounds to terminate the contract summarily. Annesley breached and repudiated the contract in purporting to dismiss Ms Ramsey…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Ramsey v Annesley College [2013] SASC 72
Case
[2013] SASC 72
Decision Date
CaseChat Overview and Summary
In the case of Ramsey v Annesley College, the plaintiff, Ms Ramsey, sought damages from her employer, Annesley College, for wrongful dismissal. Ms Ramsey was Head of Boarding at Annesley, and she alleged that she was summarily dismissed without grounds. The central dispute was whether Ms Ramsey's dismissal was lawful and if the College had grounds to terminate her employment summarily. The case was heard in the Supreme Court of South Australia.
The legal issues in this case included the formation and terms of the employment contract between the parties, whether the College breached any implied terms of the contract, and the grounds for and consequences of any alleged breach. The court needed to determine whether there was a contract of employment for a fixed term or if the employment was terminable on notice, whether the College breached the implied term of mutual trust and confidence during the investigation into the allegations against Ms Ramsey, and whether Ms Ramsey was guilty of misconduct justifying summary dismissal.
The court found that the parties did not enter into a fixed-term contract but rather had an employment relationship terminable on 12 weeks' notice. The court also found that the College did not breach the implied term of mutual trust and confidence during the investigation and that Ms Ramsey was not guilty of misconduct. Consequently, the College's purported summary dismissal of Ms Ramsey was unlawful. Ms Ramsey was awarded 12 weeks' remuneration and long service leave. However, the court held that she was not entitled to damages for the loss of a valuable opportunity to obtain alternative employment due to the College's breach because she failed to prove that such an opportunity existed. Additionally, Ms Ramsey was not entitled to recover her legal costs as mitigatory expenditure or damages for distress. The court ordered that Ms Ramsey was entitled to judgment for $47,081.95, with further orders to be determined.
Orders
Orders of the court
HELD:
1. The parties did not enter into a three or five year contract in 2009 or 2010 (at [143]-[176]).
2. The parties by their conduct entered into a contract of employment for no fixed term, terminable on 12 weeks’ notice, with effect from 1 February 2010 (at [177]-[187]).
3. It was not a term of the contract that Annesley would comply with its Complaints Policy (at [193-[209]).
4. Annesley did not breach the implied term of mutual trust and confidence in the conduct of the investigation (at [337]-[369]).
5. Annesley did not dismiss Ms Ramsey summarily acting under an ulterior motive of reducing expenses (at [370]-[378]).
6. Ms Ramsey was not guilty of misconduct. Annesley had no grounds to terminate the contract summarily. Annesley breached and repudiated the contract in purporting to dismiss Ms Ramsey summarily (at [270]-[336]).
7. Ms Ramsey is entitled, in debt or alternatively in damages, to payment of 12 weeks’ remuneration and long service leave totalling $47,081.95 (at [381]-[386]).
8. There is no reason in principle why Ms Ramsey could not recover the value of a lost opportunity to continue at Annesley (at [389]-[403]). However, on the facts, Annesley would not have continued to employ Ms Ramsey in any event and no damages are recoverable (at [404]-[412]).
9. Ms Ramsey is not entitled in principle to recover as damages for the breach comprising wrongful termination the value of a lost opportunity to obtain employment elsewhere in the teaching profession (at [437]-[458]). She would have been entitled in principle to recover such damages for breach of the mutual trust and confidence term, but she failed to prove breach of that term (at [461]-[475]). In any event, she failed to prove that she had a valuable opportunity which was lost or reduced due to Annesley’s breach of contract (at [477]-[491]).
10. Ms Ramsey is not entitled to recover her costs of action as mitigatory expenditure because the head of loss avoided or reduced by such expenditure is not recoverable (at [492]-[494]).
11. Ms Ramsey is not entitled to recover damages for distress because her claim does not fall within the exceptions identified in Baltic Shipping Co v Dillon (at [496]-[505]).
12. Ms Ramsey is entitled to judgment for $47,081.95 with the parties to be heard as to other orders (at [506]-[513]).
Background
Background to the litigation
The alleged misconduct ultimately relied upon at trial by Annesley was as follows:1.exaggerating to boarders and their parents the cost to replace a damaged fire door in April 2009;2.permitting the consumption by two year 11 students of alcohol in August 2009;3.saying to herself the words “black bastards” to refer to two Indigenous students in July or October 2009; and4.falsely denying on 3 March 2010 in response to allegations which had been put to her by Annesley on 9 February 2010:a) that she had acted as alleged in sub-paragraphs 1-3 above; andb) that she had made particular statements to Annesley staff members on 22 September 2009, 29 October 2009 and 28 January 2010.A. FACTUAL BACKGROUNDAnnesley College Annesley College is a body corporate pursuant to section 4 of the Annesley College Act 1920 (SA). At all material times until the end of 2011, Annesley conducted a school at Wayville for girls ranging from reception to year 12. The school was divided into a junior school (reception to year 6), middle school (years 7-10) and senior school (years 11 and 12). Annesley also conducted a boarding house for boarders in years 7-12. At the end of 2011, Annesley closed the middle school, the senior school and the boarding house. From the beginning of 2012, Annesley has only conducted a junior school for day students.School hierarchy and personnel Linda Douglas was the Principal at material times from 2007 to 2010. Subject to strategic direction by the School Board, she had managerial responsibility for school operations, including the employment of all professional staff (apart from Principal and Deputy Principal). The Principal chaired the Executive. The Executive met fortnightly, usually on a Monday at lunch time. The Executive comprised the following educational staff: the Principal, Deputy Principal, Head of Senior School, Head of Middle School, Head of Junior School and Head of Boarding. At the end of 2008, the Head of Middle School left Annesley. Her role was subsumed by the Head of Senior School (renamed Head of Secondary School). The Executive also included at various times the Business Manager and the newly created position of Director of Development. Each of the educational staff members of the Executive (other than the Principal) had additional responsibility for one or two areas beyond their primary responsibility. They usually held the position of Director in respect of each such additional area. For example, in August 2009, the Head of Junior School was also Director of Early Learning and the Head of Secondary School was also Director of Learning Pathways. Susan Richards was Deputy Principal at material times from 2008 to May 2010. She was also the Director of International Programs and Director of Human Resources. Radmilla Lalic was Manager of International Students and Alumni and Executive Assistant to Ms Richards. Ms Ramsey was Head of Boarding at all material times. In 2009, she was also Director of Community Relations and de facto Director of Student Wellbeing. From July 2008, Samara Jaeger was Administration Assistant, Student Wellbeing and Personal Assistant to Ms Ramsey. Some time after that, she also took on the role of junior mistress in the Boarding House.
Evidence
Evidence Before The Court
I decline to draw any such inference. The failure to call the two students resulted in Annesley failing to prove its case as opposed to giving rise to an inference that their evidence would not have assisted its case. As to the former staff members of Annesley identified by Ms Ramsey, there is no particular reason to consider them as being in the camp of Annesley as opposed to Ms Ramsey at this point. For example, based on the evidence which I heard at trial, it is more likely that Ms Jaeger would be regarded as being in Ms Ramsey’s camp rather than Annesley’s camp. In any event, beyond the obvious fact that evidence was not adduced from the persons identified by Ms Ramsey, I have no hesitation in making my findings on the evidence before me as opposed to what evidence might possibly have been called by either party.Plaintiff’s evidence Annesley contends that Ms Ramsey was not an honest or reliable witness. Most of Annesley’s contentions are made by reference to Ms Ramsey’s responses contained in Ms Batt’s letter dated 3 March 2010 and her evidence at trial concerning the allegations made against her by Ms Tonkin as formulated by Mr Reid on 8 December 2009 and allegations made by the school as formulated by Mr Reid in Mr Mossman’s name on 9 February 2010. I address those matters insofar as they involve Ms Tonkin’s allegations in Part E and insofar as they involve other allegations in Part F below. For the reasons given in those Parts, I do not consider that these matters reflect adversely upon Ms Ramsey’s honesty as a witness. There were misunderstandings which arose in 2009 between Ms Tonkin and Ms Ramsey and they each had and have different perceptions of what was occurring and what each was saying. However, this does not detract from Ms Ramsey generally being an honest witness. Annesley contends that Ms Ramsey was evasive during cross-examination on four topics. In general, during cross-examination, Ms Ramsey was short in her answers and did not elaborate or volunteer additional matters. However, I do not regard her responses as being evasive or reflecting adversely upon her honesty or the reliability of her evidence. The personality of each witness impacts upon the manner in which they answer questions. For example, the personalities of Ms Ramsey and Ms Tonkin are very different and this was reflected in the way in which they respectively answered questions. The difference between their personalities was also a major factor in the deterioration in their relationship between May and November 2009 after having had a very good relationship for several years before that time. My assessment of the manner in which Ms Ramsey answered questions does not adversely impact on my assessment of her honesty or reliability. Subject to the qualifications identified in Parts E and Part F below, generally I accept Ms Ramsey’s evidence as to the events which she described to the extent that she was able to describe them according to her recollection.C. EXISTENCE (IDENTITY) OF CONTRACT
Decision
Reasons for decision
Ms Ramsey has failed to establish that she will suffer a loss of a valuable opportunity to obtain alternative employment at executive level in the teaching profession.Conclusion As a general principle, the mere fact that there are difficulties in estimating a loss does not mean that a court does not do its best to assess the quantum of that loss on the materials available to it.[213] This principle applies to the assessment of the value of a lost opportunity.[214] However, where a court has no basis to assess whether there was a real or significant chance that the alleged benefit would have been obtained but for the breach, no damages will be awarded.[215] If it is the defendant’s breach which precludes proof of value, that is one thing. If it is a failure by the plaintiff to adduce evidence relevant to value, that is another thing. In the present case, Ms Ramsey failed to adduce any evidence on the basis of which I could conclude that she suffered a loss of opportunity of a real or significant value.K. MITIGATORY EXPENDITURE[213] See, for example, Fink v Fink (1946) 74 CLR 127 at 134-135 per Latham CJ and Williams J, 143 per Dixon and McTiernan JJ; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 411-412 per Dixon and Fullagar JJ.[214] See, for example, Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 125-126 per Deane J.[215] See, for example, Fink v Fink (1946) 74 CLR 127 at 134-135 per Latham CJ and Williams J, 143 per Dixon and McTiernan JJ; McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 411-412 per Dixon and Fullagar JJ; Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 125-126 per Deane J. Ms Ramsey claims that her legal costs incurred in the institution and prosecution of this action constitute mitigatory expenditure which forms a recoverable head of loss.[216] This is on the premise that the costs were incurred for the purpose of vindication and were calculated to have the effect of reducing (or eliminating) Ms Ramsey’s future economic loss. [216] Fifth statement of claim [42.5]-[42.7]. As a matter of general principle, if a plaintiff reasonably incurs expenditure in an attempt to mitigate her recoverable losses, the amount of that expenditure is itself recoverable as a head of loss.[217] Conversely, if the expenditure is incurred to avoid an irrecoverable head of loss, the expenditure is not recoverable as a head of loss.[218][217] Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2008) 72 NSWLR 559 at [45], [53] per Basten JA (Giles and Campbell JJA agreeing).[218] Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2008) 72 NSWLR 559 at [53]-[57] per Basten JA (Giles and Campbell JJA agreeing). If I had held that Ms Ramsey’s future economic loss were recoverable, I would have upheld this head of loss. However, I have held that Ms Ramsey’s future economic loss is not recoverable. Accordingly, this head of loss fails.L. DAMAGES FOR DISTRESS