Sanchez v The Commissioner of the Queensland Ambulance Service

[1992] HCATrans 358

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B49 of 1992

B e t w e e n -

FRANK SANCHEZ

Applicant

and

THE COMMISSIONER OF THE

QUEENSLAND AMBULANCE SERVICE

First Respondent

SUNCORP INSURANCE AND FINANCE

Second Respondent

Application for special

leave to appeal

Sanchez 1 10/12/92

MASON CJ
DEANE J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON THURSDAY, 10 DECEMBER 1992, AT 10.30 AM

Copyright in the High Court of Australia

MR K.C. FLEMING, QC: If the Court pleases, I appear with

MR N.F. NUNAN for the applicant. (instructed by

Biggs & Biggs)

MS M.A. WILSON, QC:  If the Court pleases, I appear for the

respondents.	(instructed by O'Mara Patterson &
Perrier)

MASON CJ: Yes, Mr Fleming?

MR FLEMING:  If the Court pleases, we have an outline of

submissions and cases upon which we would like to

rely. May we go firstly to the case of Turner,

because it deals with the case of Watson, which is

the only High Court decision on point. Indeed,

when one comes to Watson, it may be that the only

comments that have been made on the relationship of

ordinary contractual principles to

employer/employee relationship are obiter, because

Watson's case was really determined upon a

particular regulation. It is Turner v Australasian

Coal and Shale Employees Federation and Another,

55 ALR 635.

It is a decision of the Full Court of the

Federal Court, Justices Northrop, Keely and Gray.

It is a decision relating to whether or not a young

man was entitled to join a union as a result of an

employment contract. Could I take Your Honours to

page 645 of that case.

MASON CJ: That does not help us very much because you have

provided us with copies that have taken studious

care to omit the pagination.

MR FLEMING:  I am sorry, Your Honours, working backwards it

is in fact the third-last page, if they are in fact

on a double page.

MASON CJ:  Do you mean the third-last double page?

MR FLEMING: Yes, Your Honour. There is a reference to

Automatic Fire Sprinklers Pty Ltd v Watson at about

line 35 on that page. Their Honours in the Court

of Appeal look at the facts and say that there were

unusual facts because Mr Watson was an employee of

two companies and he was demoted in one and then

sacked. The question specifically on point in

Watson was whether or not he could be sacked, given

the existence of a regulation saying that you could

not be dismissed from employment without a

particular consent.

However, some of Their Honours did discuss the common law principles of contract, and the analysis

then is on the following page, 646, and then over

Sanchez 2 10/12/92

to 647. The passage that I have extracted in the

submissions appears in fact at 647 at about

line 20.

MASON CJ: But that does not help you very much in this

case, does it, because what happened here was that

there was a dismissal purporting to take effect to
the particular date. There was subsequently an

agreement between the parties which substituted

resignation for dismissal, but on the footing that

the relevant event took place on the date of the dismissal. In other words, the parties accepted

that employment terminated as at that date.

MR FLEMING:  Yes. Your Honours, we would submit that that,

though, denies the effect of ordinary contractual

principles with respect to the contract of

employment. For example, the contract itself

continued to remain open until 2 April when that

particular proposition was accepted. If it was a

wrongful dismissal, for example - and there is some

suggestion in the findings of both the learned

trial judge and the appeal court that it was a

wrongful dismissal - then a couple of things could

happen.

For example, it could be accepted as at the date it was given, and it was not - it was kept

open because Mr Sanchez appealed against that

decision, as he was entitled to under the Ambulance

Act, but in addition to that, if it was wrongful

because the proper notice had not been given and he

kept it open, then the repudiation was not accepted

until 2 April. Whatever else they did, the

contract remained open to that point in time if one

uses ordinary contractual principles to analyse it.

It was either accepted at that point in time, the repudiation, or the wrongful dismissal was

withdrawn or, alternatively, even if it was a

proper dismissal, it was withdrawn on 2 April.

They then of course entered into the document, and

I should add that that was just prior to the

hearing of the appeal brought by Mr Sanchez against

his dismissal.	Mr Sanchez was without legal
assistance or any assistance at all.	When that

document was drawn, it was drawn by the person who

was assisting the ambulance board.

Admittedly, they said that the resignation

took effect from the 27th, but the difficulty with

that, though, is the document itself says, "If it

is accepted" - that is, the document of 2 April -

"then the resignation will be backdated." The

document itself makes it clear that it was to be

accepted on that particular later date. If it was

Sanchez 3 10/12/92

accepted then, the contract remained on foot until

that date.

The backdating of the termination of

employment is explicable in terms of one of the

other principles of contract applying to master and

servant, and that is that there is no pay for no

work. He had not worked since that previous

occasion, and accordingly his termination in terms

of remuneration for work is backdated to that. But

that says nothing then about the other rights that

he might have.

That is the particular issue which we want to raise in this Court. If one uses ordinary

contractual principles to deal with the document of

2 April, then one can find that the contract of

employment remained open. That, on one view of the

deed, was an important issue. Your Honours, the

document itself which they signed on that

particular day is to be found in the application

book on page 14 in the learned trial judge's

reasons at the bottom of the page. The first

paragraph of course is that he tendered his

resignation from employment effective from

27 October due to medical reasons.	The second
paragraph:

"I further state that if this resignation is

accepted by the Committee -

that is an act that had to occur on 2 April -

I will withdraw my appeal -

again, another act which had to occur on 2 April

not to proceed in the matter in any way

whatsoever."

Then of course, the third paragraph really sets out

the reason why this is backdated.

GAUDRON J: But does not that third paragraph do what the

Court of Appeal said? It confirms the termination

of employment as at 27 October.

MR FLEMING:	Your Honour, we submit that it confirms the severing of the master/servant relationship as of
that day, because that is the date upon which
remuneration will cease. It does not in fact bring the contract of employment to an end. This is the
dichotomy of course which is brought out in Watson's case.

Sanchez 4 10/12/92

GAUDRON J: Yes, but assuming there is such a dichotomy, how

is it carried over into the insurance policy? It

does not seem to be.

MR FLEMING:	The termination is an important issue in the insurance policy, certainly at least on one view of
that.  On another view - and I must say this was
not argued, it seems, in either of the courts
below - it is but a deeming provision for total and
permanent disablement. If termination of employment occurred as a result of being totally and permanently disabled, that may not destroy the
fact that you could be totally and permanently
disabled in some other way.

But that was not dealt with specifically,

although towards the end of the judgment in the

Court of Appeal, they did make a comment which is

quite difficult to come to terms with. At page 34

Their Honours dealt with the fact that the employer

and the employee were parties to that settlement,

but they were not parties to this action; this

action was being conducted against the controller

of the superannuation policy. In the middle of the

page:

The litigation before the Appeal Board

was therefore compromised on terms which

acknowledged that the respondent's services

had been terminated on 27 October 1989, and

the circumstances attending that compromise

raise no doubt that it was a valid and binding

contract between the respondent and his

employer. As between those parties, the

matters which they agreed operate as

conventional estoppels.

Then there is this rather puzzling passage:

While the estoppels between the

respondent and his employer might not bind the

parties to these proceedings, there was no

full investigation of the efficacy of the

termination of the respondent's services on

27 October 1989 between the present parties in

these proceedings and this litigation was

conducted on the basis that the rights and

obligations of the respondent and appellants
fall to be determined by reference to the

position between the respondent and his

employer, including their transaction on

2 April 1990. No attempt was made to seek to

establish a different date for the termination

of the respondent's services for the purposes
of these proceedings from that which is
operative as between the respondent and his

employer.

Sanchez 10/12/92

MASON CJ: But that is directed to a point different from

the point raised with you by Justice Gaudron.

MR FLEMING: It may not be ultimately, Your Honour, because

in fact the contract of employment which is dealt

with, at least that master/servant relationship,

might be something different to the contract of

employment simpliciter. In respect of the contract

of employment, that might be the important issue in

terms of the deed. As between the master and the

servant, the date upon which the person ceased work

might well be the important date.

GAUDRON J: But you are still in a position that that seems

not to have been argued anywhere.

MR FLEMING:  With respect, Your Honour, Their Honours made

reference to both Turner and Watson, but did no

more than that in effect. If one goes back to the

bottom of page 32, Their Honours deal with the fact

that:

It was argued for the respondent that the

peremptory termination ..... was at least prima

facie wrongful ..... had reasonable prospects of

success before the Appeal Board ..... change

which has occurred in judicial attitudes -

There is a reference to Turner, and then the following passage is important:

However, it is tolerably clear that after his

employer gave him notice of dismissal on

27 October 1989 the respondent's further right

to provide services to his employer was

dependent on either a favourable decision of

the Appeal Board in the appeal which he

instituted or if the employer could be induced

to retract the discharge: cf Automatic Fire

Sprinklers Pty Ltd v Watson -

We would be submitting that that ignores the other

elements, of course, of the application of
contractual principles to contracts of employment.

Their Honours here, we would be submitting, made

that fundamental mistake of equating capacity to

provide services to an employer with the

termination of the contract of employment.

DEANE J: But your argument is necessarily predicated upon a

conclusion that the dismissal was wrongful, is it

not?

MR FLEMING: Yes, Your Honour, in one element, but by the

same token, even if it was a proper dismissal and

it was retracted on 2 April, there is some

authority to suggest - and there is some conflict

Sanchez 6 10/12/92

about this, and indeed there is no clear High Court

authority on this - that the contract which

originally was in place continued to be in place as

at the date of the retraction. That probably

occurred on 2 April as well.

DEANE J: But if the dismissal was not a wrongful dismissal,

it terminated the contract of employment. If that

were so, in the circumstances of this case the

substitution of resignation for dismissal in the

agreement, I would have thought, could not possibly

have reinstated the contract in the intervening

period, regardless of what might have been the

situation if it had simply been a withdrawal of the

dismissal.

MR FLEMING:  Your Honour, the withdrawal of dismissal was

discussed in Emery v The Commonwealth of Australia,

5 FLR 209. Mr Justice Pape at page 217 deals with

the matter. There appears to be conflict on the

authorities as to whether or not, if the original

notice of termination is withdrawn, that reinstates

the original contract or whether or not it is in

fact a new contract that comes into being.

DEANE J: Yes, except there it was before, was it not? He

was given notice of retrenchment, but before the

employment came to an end.

MR FLEMING:	Yes, that might be so, Your Honour, but that principle still has not been discussed in the cases
and even if it was withdrawn after the relationship
came to an end, it may well in fact reintroduce the
original terms of the agreement. Indeed, when one
looks at the document which the parties signed on
2 April, it makes reference back all the time to
that original agreement. It may be that that
contract of employment was reinstated as at
2 April. There is no authority on that point.
GAUDRON J: But the point I was trying to raise with you

earlier is that assuming even that be right, the

problem is the expression in the policy or the
superannuation trust deed: "service with the

brigade is terminated". That is the expression

that that document uses.

MR FLEMING:  It may well in fact come down to an

interpretation of the document. We obviously do

not want that to happen, but if it turns on that,

there are alternative interpretations. "Service"

may mean the contract of employment as distinct

from the master/servant relationship. Indeed, that

becomes a very important issue in terms of total

and permanent disablement if that is incorporated

in superannuation deeds such as that. Does it mean

service? If it in fact means service, it means

Sanchez 7 10/12/92

that an employer in fact can terminate service

whilst that six months is running and so deprive a

person of total and permanent disablement.

As in here, for example, a man who has AIDS

and cannot continue working, they could find some

other basis for terminating his employment and so

he would be deprived of all of his superannuation

entitlements. That verges upon unconscionability.

Admittedly, the facts in this case are rather unusual in that the day upon which he is called

upon to show cause why he should not be sacked, he

is diagnosed as having AIDS. His behaviour for a

month or two prior to that had been bizarre -

unusual, perhaps I should say - and he had been

charged with offences which had occurred in convicted of those charges and not informing them of those and not properly performing his work, all of which might be explicable by the AIDS condition

that he was suffering.

DEANE J:  Where would all this lead, Mr Fleming, if one were

of the view that on the argument that had been

advanced in the court below, an appeal would have

no chance of ultimate success unless the dismissal

was wrongful?

MR FLEMING:  Your Honour, that obviously still leaves us

with the argument that the dismissal was wrongful

and that that stated - - -

DEANE J: But has that ever been litigated anywhere?

MR FLEMING:	The facts were there, Your Honour.
DEANE J:	I appreciate that.
MR FLEMING:	The facts were there and in fact the Court of

Appeal specifically adverts to it.

DEANE J: But it would be somewhat inappropriate for this

Court to set out on facts to investigate whether

the dismissal was wrongful in the context where no

other court had dealt with that.

MR FLEMING:  Your Honour, all I can say is that the Court of

Appeal says that it is prima facie wrongful. The

facts are quite simply put: he did not receive a

week's notice, as he should have received. That is

the basis of the wrongful dismissal. If that is the case, that is a point that can be determined very promptly. There is no evidence that could be

called to the contrary, and so we are in that

position of perhaps raising a fresh issue on

appeal, at least just that one factual issue.	The
other issues were raised, the relationship of

Sanchez 8 10/12/92

ordinary contractual principles to employer and

employee - - -

MASON CJ: But we have consistently refused to grant special

leave to allow an issue to be litigated for the

first time in this Court except in circumstances

where the litigation of the issue has been

precluded in lower courts by reason of authority in

this Court.

MR FLEMING:  Your Honours, all I can say at the end of the

day is that the facts are there. They were in fact

commented upon by the Court of Appeal. They made a

determination that it was at least prima facie

wrongful. There is nothing that can be said

contrary to that. It is a question of statutory

interpretation whether he is entitled to a week and

whether he got it. The critical issue of course

here, though, is the application of contractual

principles to the employer/employee relationship.

DEANE J:  And also in the background, of course, is the

prospect that if leave were granted, from the back

of the deck would quickly come a point of

construction that was never raised in the court

below. It would be very difficult to deal with

your argument now that that question of

construction has been identified in this Court,

simply ignoring the question of construction.

MR FLEMING:  Your Honour, all I can say is that it was

raised and obviously dealt with to some degree. I

am not in a position to be able to say that it was

fully litigated as such, but the material was

there, it was raised, the Court of Appeal dealt

with it and made the comment that it did on that.

That is an issue upon which there seems to be no

argument, or can be no argument, but of course the

other question is there.	I accept that Your Honour
said that if it is dependent upon that, but the
other issue is there as well.	Even if it was

withdrawn, there is still no authority in relation

to that.

Of course, the application of contractual

principles to employment contracts becomes more and

more critical. Certainly it has become more

critical since 1946 when Watson was determined.

There they tended to say that the only rights that

an employee had was just one to quantify his

damages and he might, by accepting a repudiation,

want to avoid obligations himself such as restraint

of trade. But now, with the passing of time, of

course, and with the accumulation of benefits such

as superannuation - and indeed in the future, if

there are contracts, if the basis of industrial law

Sanchez 9 10/12/92

is workplace contracts, then it becomes an even

more critical issue for the future.

There is no authority, except Automatic Fire Sprinklers v Watson, on the point; something which

has caused some little concern to the Full Court of

the Federal Court and has been discussed from time

to time by only single judges in various other

places. As I say, Watson at the end of the day is

but obiter in any event in respect of this point.

It was determined on the interpretation of a

particular statute or a particular regulation and

only some dealt with the issue.

Your Honours, if I may just for a moment

highlight some of the problems in the judgment of

Sir Owen Dixon in Automatic Fire Sprinklers v

Watson, 72 CLR 435, at page 466. His Honour's judgment starts at page 463 and His Honour analysed

the principles in terms of ordinary contract. At

the bottom of page 465, about point 9 of the page,

His Honour said:

His only remedy -

for wrongful repudiation -

is in unliquidated damages for wrongful

dismissal. By keeping his contract open, he

may be able to resume his service without a

new contract, if his employer is induced to

retract the discharge.

Of course, that probably is the only authoritative statement on that point as well that one can find.

If one goes down to about point 8 of the page, the

second-last and last sentence of that middle

paragraph, His Honour said:

That relationship may be ended by the servant

the servant, although the act of the one or of	forsaking the master or the master discharging
the other amounts to a breach of contract.

There is this continuing running together of the

master/servant relationship and the difficulties surrounding the terms of the contract. A lot of

the difficulty has been caused by comments such as,

for example, "You cannot get specific performance

of a contract of employment." Sir John Latham says

in his judgment earlier on that therefore, to say

that the relationship existed beyond wrongful

termination is to say that you could get specific

performance of a contract of employment. So there

is this continuing difficulty with this notion.

Sanchez 10 10/12/92

Of course, in Turner the Full Court of the

Federal Court said that that would not stop a court giving equitable relief, for example, they could

give injunctive relief, and so on. But the issues

raised are very important issues and they are

unclear, to say the least.	Your Honours, they are
our submissions.

MASON CJ:  Thank you, Mr Fleming. The Court need not

trouble you, Ms Wilson.

For reasons which appeared during the course

of argument, the Court is of opinion that this case
is not a suitable vehicle for the determination of

any question of general principle. The application

for special leave is therefore refused.

MS WILSON:	I would seek an order for costs.
MASON CJ:	You do not oppose an order for costs?
MR FLEMING:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 11.01 AM THE MATTER WAS ADJOURNED SINE DIE

Sanchez 11 10/12/92