Selak v National Tiles Co Pty Ltd (No 4)

In Selak v National Tiles Co Pty Ltd, the plaintiff, Mr. Selak, brought an action against National Tiles Co Pty Ltd, alleging breach of contract and inducing breach of contract, among other claims. The dispute arose from an employee share option plan under which Mr. Selak was entitled to options. The case was heard in the Supreme Court of Victoria. The primary issues for the court to decide were whether there had been a breach of the implied terms of the share option plan, whether there had been an inducing breach of contract, and if so, the appropriate measure of damages.

The court considered the construction of the employee share option plan, including the implied terms that the parties should cooperate to achieve the purpose of the agreement and not hinder its fulfillment. The court held that there was an implied obligation to cooperate and that National Tiles Co Pty Ltd breached these terms by not providing information that would have allowed Mr. Selak to exercise his options. Regarding the alleged inducing breach of contract, the court found that the defendants did not have the requisite knowledge or intent to induce the breach. However, the court did find that the defendants were liable for the breach of the implied terms of the plan.

The court awarded Mr. Selak nominal damages for the breach of the implied terms of the plan, considering the principles in Mackay v Dick and Adaz Nominees Pty Ltd v Castleway Pty Ltd. The court rejected the claim for aggravated and exemplary damages, finding that the loss of opportunity did not amount to damages under tort law. The court applied the ‘Sellars’ discount to the nominal damages, taking into account the speculative nature of the lost opportunity. The final orders included the awarding of nominal damages and costs to Mr. Selak.