Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357
HEARING DATE(S):
18 October 2010
JUDGMENT DATE:
17 December 2010
JUDGMENT OF:
Allsop P at 1; Beazley JA at 19; Hammerschlag J at 20
DECISION:
On or before 28 January 2011, the parties bring in short minutes giving effect to the reasons of Allsop P and Beazley JA, including proposed orders for costs and submissions of no more than two pages if the orders for costs are not agreed. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
CATCHWORDS:
DAMAGES – employment contract – breach – failure of employer to review salary – failure of employer to set objectives and review performance for payment of bonus – loss of commercial opportunity or chance – loss of opportunity to increase remuneration – loss of opportunity to be paid a bonus – assessment of value requires proper understanding of content of obligations and entitlements under the contract – opportunity or chance to be measured by the probabilities and possibilities - DAMAGES – award – reduction in damages – ex gratia payment – sufficient connection to the contractual claim to be taken into account – overriding principle of compensation - CONTRACT – employment contract – breach – implied terms of good faith, trust and confidence – contract provided for review of remuneration and for employer to set performance objectives relevant to bonus payments – discretion of employer to decide whether performance bonus paid – discretion to be understood against the proper scope and content of the contract
[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
Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357
Case
[2010] NSWCA 357
Decision Date
CaseChat Overview and Summary
Silverbrook Research Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning a breach of an employment contract. The dispute arose from the employer's alleged failure to review the employee's salary and to set performance objectives for the payment of a bonus, which the employee claimed resulted in a loss of commercial opportunity or chance to increase remuneration and receive bonus payments.
The Court of Appeal was required to determine whether the employer had breached implied terms of good faith, trust, and confidence by failing to review the employee's remuneration and to set performance objectives relevant to bonus payments. Furthermore, the Court had to consider how to assess the value of the lost opportunity to increase remuneration and receive a bonus, particularly in light of the employer's discretion in determining bonus payments, and whether an ex gratia payment made to the employee should be taken into account in reducing any damages awarded.
The Court reasoned that the employer's discretion regarding bonus payments was not unfettered and had to be understood within the proper scope and content of the contractual obligations. The assessment of the lost opportunity required consideration of probabilities and possibilities. The Court also held that the overriding principle of compensation meant that an ex gratia payment, if sufficiently connected to the contractual claim, could be taken into account to reduce the damages awarded. The parties were directed to bring in short minutes giving effect to the reasons of Allsop P and Beazley JA, including proposed orders for costs.
Orders
Orders of the court
On or before 28 January 2011, the parties bring in short minutes giving effect to the reasons of Allsop P and Beazley JA, including proposed orders for costs and submissions of no more than two pages if the orders for costs are not agreed.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]