Stevens v Spotless

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMON LAW DIVISION

S CI 2012 6706

ANTHONY STEVENS	Plaintiff
v
SPOTLESS MANAGEMENT SERVICES PTY LTD (ACN 099 129 790)	Defendant

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JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	10-14 and 28 November 2014
DATE OF JUDGMENT:	10 December 2015
CASE MAY BE CITED AS:	Stevens v Spotless
MEDIUM NEUTRAL CITATION:	[2015] VSC 746

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BREACH OF CONTRACT – Terms of employment – Retention plan – Agreements concerning Retention Bonus – Termination of employment – Discretion of the Board of Directors to pay under a Retention Plan in “special circumstances” – Actionable representations

MISLEADING AND DECEPTIVE CONDUCT – Alleged representations made on 23 August 2012 – Alleged representations as to the nature of terms and conditions of employment – Australian Consumer Law ss 4 and 236

ESTOPPEL – Alleged representations that employee was terminated as a result of redundancy – Whether employee relied upon those representations – Whether employee suffered damage as a result

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N O’Bryan AM SC with Mr J McDougall	A J Macken & Co
For the Defendant	Mr P Jopling AM QC with Mr G McKeown and Mr E Gisonda	AiGroup Workplace Lawyers

HIS HONOUR:

Introduction

The plaintiff, Mr Anthony Stevens (Stevens), was employed by the defendant Spotless Management Services Pty Ltd (Spotless Services) as the Chief Information Officer for the Spotless Group Ltd (Spotless) from 2 March 2009, under a Contract of Employment entered into on 17 December 2008 (Contract of Employment).[1] On 25 October 2012 Stevens voluntarily left Spotless Services.
[1]CB125-142

In October 2011, Stevens and Spotless Services agreed upon a Retention Plan. The Retention Plan required Stevens to remain employed at Spotless from 1 September 2011 to 1 September 2013, at which point Stevens would be allocated shares worth 100% of his Fixed Annual Remuneration (FAR) as at 1 September 2013. There was also a term of the Retention Plan that provided for these shares, or a proportion thereof, to be allocated to Stevens at the discretion of the Spotless Board if because of “Special Circumstances” Stevens ceased to be an employee of Spotless before 1 September 2013.

The expression “Special Circumstances” used in the October 2011 Retention Plan encompassed termination by reason of a restructure as a change in the state of affairs of the employing company whereby the position previously occupied by the relevant employee no longer existed.

Following a successful takeover of Spotless by Pacific Equity Partners (PEP) in 2012, Spotless was delisted from the Australian Stock Exchange and became privately owned, with PEP taking full operational control on 17 August 2012.

During the corporate restructure of Spotless, Stevens left the position of Chief Information Officer to take up the newly created role of General Manager – Airports Division (General Manager Airports).

In August and September 2012, meetings occurred between: Stevens and Mr Bruce Dixon, the Chief Executive Officer of Spotless (Dixon); Stevens and Ms Vita Pepe, the Chief Operating Officer of Spotless (Pepe); and Stevens, Dixon and Pepe in relation to, amongst other things, Stevens’ position and role with Spotless Services and within Spotless and Stevens’ termination, redundancy and Retention Plan entitlements.

On 14 September 2012, during a meeting with Pepe, Stevens indicated his desire to leave Spotless.

On 15 October 2012 Spotless paid Stevens, in addition to other payments, a lump sum payment of $447,400, which Spotless contends was mistakenly described and paid as a Retention Bonus.

On 25 October 2012, Stevens left Spotless’ employment.

Stevens’ claim against Spotless Services concerns Stevens’ severance entitlements, specifically, whether or not Stevens is entitled to further payment by Spotless Services of $477,400 in lieu of notice of termination of the plaintiff’s employment.[2]
[2]Plaintiff’s Statement of Claim, [21].

Spotless contends that Stevens was not at any time entitled to be paid $477,400 as a Retention Bonus, but was entitled to be paid that same amount in lieu of notice. Therefore Spotless asserts that on 15 October 2012 Stevens received all he was entitled to receive under his Contract of Employment (although that payment was misdescribed as a Retention Bonus) and that the payment of 15 October 2012 in the sum of $477,400 satisfied Spotless’ obligation to pay Stevens that same sum in lieu of notice.

Pleadings
Statement of Claim

Under the Contract of Employment, Spotless Services might terminate the Contract by giving not less than 12 months’ notice in writing or by paying Stevens FAR which would have accrued to Stevens during the balance of the required notice:

19. Termination
19.1 Termination with notice
The Executive may terminate this agreement by:
(a)giving not less than 6 months’ notice in writing.
(b)giving to the Company written notice, effective immediately, within 6 months of a material diminution to the Executive duties and responsibilities.

The Company may terminate this agreement by giving not less than 12 months’ notice in writing or by paying the Executive’s Fixed Annual Remuneration which would have accrued to the Executive during the balance of the required notice period.
If the Executive’s employment is terminated by the Executive pursuant to clause 19.1.(b), the Company will pay to the Executive, in addition to any payments or benefits owing up to the date of termination of this Agreement a payment equivalent to 12 months Fixed Annual remuneration as to the date of termination.

19.2 Employment during notice period
If notice is given to terminate the employment, then the Company may direct the Executive not to perform any duties for part or all of the notice period and require the Executive to remain away from the Company’s premises; and, change the title of the Executive.

Retention Plan – Retention Bonus

By Statement of Claim dated 30 November 2012, Stevens alleges:

5.In October 2011, the parties agreed a Retention Plan.
Particulars
The Retention Plan is partly in writing and partly to be implied. In so far as it is in writing it is comprised:
(a)by a letter of offer dated 11 October 2011 from Mr J P Farnik, Managing Director and Chief Executive of the defendant to the plaintiff, and signed by the plaintiff as acceptance of the offer on 20 October 2011; and
(b)by the Spotless Group Long Term Incentive Share Plan Trust Deed,

copies of which are available for inspection at the offices of the plaintiff’s solicitors during ordinary business hours upon reasonable notice.

6.There were relevant terms of the Retention Plan:
(a)that the Retention Plan was effective for a 2 year period from 1 September 2011 to 1 September 2013;
(b)that the Retention Plan award payment was 100% of the plaintiff’s fixed annual remuneration as at 1 September 2013;
(c)that the retention award payment was payable in shares subject to the plaintiff’s continuous employment with the defendant during the plan period;
(d)that if the plaintiff ceased to be an employee of the defendant at any time before 1 September 2013 as a result of “Special Circumstances” the Board might in its discretion allocate to the plaintiff all or a proportion of the shares that he would have received under the Retention Plan as at 1 September 2013;
(e)that the expression “Special Circumstances” had the same meaning as in the Spotless Group Long Term Incentive Share Plan Trust Deed and included termination by reason of a restructure or a change in the state of affairs of the employing company whereby the position previously occupied by the relevant employee no longer existed.

Particulars
The said terms were in writing and contained in the letter of offer dated 11 October 2011 from Mr J P Farnik.
The relevant definitions contained in the Spotless Group Long Term Incentive Share Plan Trust Deed were incorporated by express reference to the Deed in the letter of 11 October 2011 and are also implied by law in order to give business efficacy to the Retention Plan.

Stevens alleges that in a meeting between Stevens and Dixon on 23 August 2012, it was orally agreed that:

(a) following the Spotless restructure, the defendant would offer Stevens a new position as its General Manager Airports, which would be a Senior Executive position with “substantial profit and loss responsibilities”;

(b) if Stevens became redundant, the defendant would terminate Stevens’ employment and pay Stevens his full termination benefits for redundancy under the Retention Plan, including an amount in lieu of notice equal to his FAR and a Retention Plan award equal to his FAR; and

(c) in such circumstances any Retention Plan award would be paid as a cash bonus and not in shares.[3]

[3]Statement of Claim, [8].

Stevens also alleges that, further or in the alternative, Spotless Services made representations to Stevens on 23 August 2012 to the effect set out in subparagraphs (a), (b) and (c) in the preceding paragraph and such representations were said to have been made by Dixon to Stevens in the conversation on 23 August 2012.[4]
[4]Ibid, [9].

Stevens also alleges that on 14 September 2012, and again on 17 September 2012, Dixon and Pepe agreed with Stevens that:

(a) the position of General Manager Airports did not have substantial profit and loss responsibilities and was not a suitable position for Stevens;

(b) accordingly Stevens’ employment would be terminated for redundancy;[5] and

(c) Stevens’ employment with Spotless Services would end on 19 October 2012.[6]

[5]Ibid, [12] and [13].

[6]Ibid, [13].

On 17 September 2012 the defendant gave to Stevens a salary calculation setting out its estimate of the termination payment to be made to Stevens, calculated to 19 October 2012, which included payment details as follows:

On 17 September 2012 the defendant gave to the plaintiff a statement setting out its estimate of the termination payment to be made to the plaintiff as at 19 October 2012 (Termination Statement), which confirmed that the defendant would pay the plaintiff’s termination benefits on a redundancy basis as had been represented and agreed on 23 August 2012 in the sum of $581,902.71 after deduction of tax, comprising:
(a)Salary and Retention Bonus:
(i)ordinary salary for the period 1 October 2012 to 19 October 2012, in the sum of $25,050.54; plus
(ii)Retention Bonus in the sum of $477,400.00; less
(iii)tax on ordinary salary, in the sum of $9,338.00, tax on the Retention Bonus in the sum of $221,988.00, and car parking charge of $237.39;

(b)Accrued leave and severance:
(i)payment for unused leave of 119.65 hours, being in the sum of $27,909.56; plus
(ii)severance payment (52 weeks) in the sum of $477,400.00; less
(iii)tax on annual leave in the sum of $8,791.00, tax on an employment termination payment up to a threshold of $175,000.00 in the sum of $55,125.00, and tax on an employment termination payment after the threshold of $175,000.00 in the sum of $130,378.00.

Particulars
The termination Statement was in writing dated 17 September 2012. A copy is available for inspection at the offices of the plaintiff’s solicitors during ordinary business hours upon reasonable notice.[7]

[7]Ibid, [15](a) and (b).

Stevens alleges that Spotless Services termination statement dated 17 September 2012, estimated his termination payment as was represented to Stevens on 23 August 2012, in the sum of $581,902.71, after deduction of tax.[8]
[8]Ibid.

Stevens alleges that he agreed to and accepted the proposed termination payment dated 17 September 2012, in discussions with Pepe in her office on that date.

Stevens also alleges that on 12 October 2012 Pepe proposed, and he agreed, that he work for Spotless for an additional week until 25 October 2012.

Stevens asserts that on 15 October 2012, Spotless Services paid him a Retention Bonus of $477,400 less tax under a Pay Advice which “mis-described” the payment as an “annual bonus”.[9]
[9]Ibid, [18].

On 23 October 2012, Mr John Douglas, General Manager – Human Resources (Douglas) of Spotless told Stevens that Spotless Services:

(a) had decided that a Retention Bonus was not payable;

(b) had paid him the Retention Bonus by mistake;

(c) was of the view Stevens was entitled to payment of 12 months FAR in lieu of notice; and

(d) would not pay Stevens the further sum of $477,400 in lieu of notice for the termination of his employment as it had paid him the Retention Bonus.[10]

[10]Ibid, [19].

Stevens asserts that his employment with Spotless Services ended on 25 October 2012 and that despite requests and demands by Stevens, Spotless Services has failed or refused to make payment of the further sum of $477,400 in lieu of notice for the termination of Stevens’ employment. Spotless Services is indebted to Stevens in the sum of $477,400.

Further or in the alternative, Stevens pleads misleading or deceptive conduct by Spotless Services under the Australian Consumer Law in respect of the same Representations[11] as relied on in relation to the agreement which Stevens asserts was made with Dixon on 23 August 2012.
[11]Ibid, [9].

Defence and Counterclaim

By its Amended Defence and Amended Counterclaim dated 30 August 2013, Spotless Services pleads the key terms of the Retention Plan of 11 October 2011 but denies Stevens’ account of the meeting on 23 August 2012.

Spotless Services alleges that at the meeting of 23 August 2012 between Stevens and Dixon:

(a) Dixon told Stevens that in his role as Chief Information Officer he would now be reporting to Mr Cryzewski, the Chief Financial Officer, rather than Dixon;

(b) Stevens told Dixon during the meeting that he was an operations person and wanted a position with profit and loss responsibilities; and

(c) Dixon told Stevens that if he assisted Spotless Services with its information systems issues he would make an offer of a position running a division of the defendant.

Spotless Services also alleges that on or about 28 August 2012, Dixon offered Stevens the position of General Manager Airports from early October 2012, which Stevens accepted.

Spotless Services alleges that at the meeting of 14 September 2012, Pepe asked Stevens if he wanted to leave Spotless’ employ and Stevens responded that he did. In that meeting Pepe told Stevens he could leave but it would not be by way of redundancy because the position of General Manager Airports was an ongoing position.[12]
[12]Amended Defence and Counterclaim dated 30 August 2013, [11].

Spotless Services alleges that on or about 17 September 2012 a meeting occurred between Stevens, Pepe and Dixon, at which Stevens reiterated his desire to leave his position at Spotless. During the course of the meeting in response to a question from Stevens as to the terms on which his employment would be terminated both Dixon and Pepe told Stevens that they would honour what was in the Stevens’ Contract of Employment with Spotless Services. At the same meeting on 17 September 2012, Dixon and Pepe and Stevens agreed that Stevens last day of employment with Spotless would be 19 October 2012, which date was subsequently pushed back to 25 October 2012.

Spotless Services admits that later on 17 September 2012 it provided Stevens with a Manual Salary Calculation containing various estimates of payments to be made to Stevens upon his termination of employment with the defendant. One of the payments listed in the document was for $477,400 and was described as a “Retention Bonus” payment.[13]
[13]Ibid, [11(c)].

Spotless Services admits that on 15 October 2012, in addition to other payments, it made a lump sum payment of $477,400 to Stevens, which Spotless Services asserts was based on Stevens’ FAR.[14]
[14]Ibid, [18].

On or about 23 October 2012, Spotless Services provided Stevens with another Manual Salary Calculation that did not include reference to the Retention Bonus payment. Spotless Services alleges that on 23 October 2012, Douglas met with Stevens and informed him that the amount of $477,400 less tax, which Stevens had been paid, had mistakenly been described and paid as a Retention Bonus. However, because that sum was the same amount which Stevens would have received in terms of a notice payment under Stevens’ employment contract when he left Spotless’ employment on 25 October 2012, no further payment would be made to Stevens.[15]
[15]Ibid, [19] (a) and (d).

Further, Spotless Services also denies that the positions of Chief Information Officer or General Manager Airports have been made redundant. Spotless Services asserts that at 10 January 2013, the Chief Information Officer role was being performed as it had been at all material times, by another Spotless employee.[16]
[16]Amended Defence and and Amended Counterclaim dated 30 August 2013, [7A].

As to the allegations of misleading or deceptive conduct, Spotless Services asserts that the position of General Manager Airports was a Senior Executive position with substantial profit and loss responsibilities and Stevens’ employment was not terminated on the grounds of redundancy of the position of General Manager Airports. Further, Stevens did not agree to accept the position of General Manager Airports in reliance upon the representations made by Dixon in his meeting with Stevens on 23 August 2012.[17]
[17]Statement of Claim, [27].

Spotless Services asserts that, under the terms of Stevens’ Contract of Employment, Stevens had no entitlement to be paid a Retention Bonus, the payment of any such bonus being conditional upon Stevens satisfying the prerequisites prescribed by the Retention Plan.

Spotless Services asserts that no agreement was reached between Stevens and Spotless Services on 23 August 2012, or thereafter, that Spotless Services would pay Stevens the Retention Bonus immediately.

Spotless Services also asserts that any oral agreement between Stevens and Spotless Services on or about 23 August 2012 to pay Stevens a Retention Bonus immediately would have been void and of no effect because of clause 22.4 and clause 24 of Stevens’ Contract of Employment.

Spotless Services also counterclaims that its payment of $477,400 less tax made to Stevens on 15 October 2012 was made both as a result of mistake of fact and mistake of law. Accordingly, because Spotless Services has not been repaid, it claims $477,400 by way of set-off and or counterclaim.[18]
[18]Amended Defence and Counterclaim [38] and Prayer for Relief.

Spotless Services asserts that the said $477,400 could only have been payable by way of Retention Bonus, as mistakenly described and paid by Spotless Services on 15 October 2012, if the conditions of the Retention Plan were satisfied. Here the conditions of the Retention Plan, that Stevens remain employed by Spotless Services from 1 September 2012 to 1 September 2013, were not satisfied because Stevens left Spotless Services on 25 October 2012. Furthermore, Spotless Services asserts that the Retention Plan required that the Retention Bonus be paid in Spotless Group Limited Shares and was at all events only payable on the exercise of the discretion of the Board of Spotless Group, which discretion was never exercised.

By its Prayer for Relief, Spotless Services claims the sum of $477,400 on the above bases, alternatively claims damages in that sum.

Estoppel

By Further Further Amended Reply and Defence to Amended Counterclaim of 14 November 2014, Stevens alleges that Spotless Services is estopped from denying that Stevens was entitled to payment of the Retention Bonus in cash upon termination of his employment for redundancy because:

(a) at all material times from 14 March 2012, Stevens was entitled to receive any benefit under the Retention Plan in cash instead of Spotless Group Limited shares;

(b) at all material times from 17 August 2012 until 25 October 2012 it was Spotless Services’ intent that, in circumstances of the termination of Stevens’ employment for redundancy, Spotless Services would pay Stevens’ Retention Bonus in cash and not in shares; and

(c) Spotless Services represented to Stevens several times between 17 September 2012 and 25 October 2012 that he was terminated for redundancy and Stevens relied upon those representations in terminating his employment.

Stevens also further and alternatively alleges that Spotless Services on or by 17 September 2012 decided to pay him the sum of $477,400 less tax by way of Retention Bonus without regard to whether it was under a legal obligation to do so, and on 15 October 2012 Spotless Services paid him the sum of $477,400 by way of Retention Bonus.[19]
[19]Further Further Amended Reply and Defence to Amended Counterclaim, 14 November 2014, [16G].

Background
Prior to the takeover

The Contract of Employment contained the following relevant terms:

(a) Spotless Services appointed Stevens as its Chief Information Officer and any change to Stevens’ role was conditional upon written agreement between the parties (clause 2.1);

(b) Stevens would report directly to the Managing Director and CEO of Spotless (clause 4.2(a));

(c) Stevens might terminate the contract by:

(i) giving not less than six months’ notice in writing (clause 19.1(a));

(ii) giving to Spotless Services written notice, effective immediately, within 6 months of a material diminution to Stevens’ duties and responsibilities (clause 19.1(b));[20]
[20]Further, Clause 19.1 states that if the employment contract is terminated as specified Spotless will pay to Stevens, in addition to any outstanding entitlements, a payment equivalent to 12 months FAR as at the date of termination.

(d) Spotless Services might terminate the contract by giving not less than 12 months’ notice in writing or by paying Stevens’ FAR which would have accrued to Stevens during the balance of the notice period (clause 19.1);

(e) the contract supersedes all previous agreements in respect of Stevens’ employment by Spotless Services and embodies the entire agreement between the parties (clause 22.4); and

(f) the contract may only be altered in writing signed by each party (clause 24).

In August and October 2011, Spotless Services made offers and put in place an Employee Retention Bonus Scheme for what it considered its three key employees, Ms Wendy Field (Group General Manager – Managed Services), Mr Michael Givoni (Group General Manager – Development) and Stevens.[21] The Retention Plans were identical in terms, except the Retention Plan applicable to Stevens’ provided that he would receive 100% of his FAR upon completion. In the cases of the Retention Plans applicable to Ms Field and Mr Givoni, the Retention Plans provided they would receive 60% of their respective FARs on completion.
[21]CB143-4, 145-6, 147-8.

The relevant terms of Stevens’ Employee Retention Plan provided:

(a) that the Retention Plan was effective for a two year period from 1 September 2011 to 1 September 2013;

(b) that the retention award payment was payable in Spotless Group Ltd shares subject to Stevens’ continuous employment with Spotless Services during the above plan period; and

(c) that if the employee ceased to be an employee of Spotless Services at any time prior to 1 September 2013 as a result of “Special Circumstances” the Board might in its discretion allocate to the employee all or a proportion of the shares that they would have received under the Retention Plan as at 1 September 2013.

Stevens submits that the term “Special Circumstances” in his Retention Plan, had the same meaning as in the Spotless Group Long Term Incentive Share Plan Trust Deed (‘the Trust Deed’) and included ‘termination by reason of a restructure or a change in the state of affairs of the employing company whereby the position previously occupied by the relevant employee no longer existed’.[22] The application of this definition of “Special Circumstances” to the written retention agreement is not disputed by the defendant.[23]
[22]CB60.
[23]Outline of Argument of Defendant 9 July 2014 at [5].

Offers to participate in the Retention Plan were made to the three key employees in the context of a proposed corporate takeover of Spotless by PEP. In mid-2011, Dixon had taken a proposal to PEP for the takeover of Spotless.[24] The takeover was common knowledge, or in the words of Dixon “in the market”, for about 12 months prior to its completion.[25]
[24]T369.
[25]T335.

On 14 March 2012, the Spotless Group Human Resources Committee resolved to amend the Retention Plan agreements so that any bonus would be paid in cash rather than in Spotless Group shares.[26] Ms Rita Agati, Group General Manager - Human Resources (Agati) prepared and signed letters dated 3 July 2012 for each of the three key executives advising of this change.[27] Although these letters were approved by the Board and signed by Agati, the letter addressed to Stevens was not provided to him.[28]
[26]CB151A.
[27]T505 L12-25.
[28]T326 to T328 L13.

On 23 February 2012, Spotless introduced a further key employee Retention Scheme.[29] The purpose of this scheme was to reward and retain key employees during the due diligence exercise which was to be completed by PEP.[30]
[29]CB442.
[30]CB469.

Stevens was invited to participate in the 2012 Retention Scheme, which entitled him to $115,875 if he remained with Spotless until the earlier of 1 September 2012, or the completion of the takeover.[31] A letter setting out the terms of this Scheme was sent to Stevens, who needed to be made aware of the scheme in order for it to achieve its objective of mitigating the potential risk of the flight of key employees during the due diligence period.[32]
[31]T525; and CB476.
[32]T526.

Spotless resolved, on 20 July 2012, to pay the bonus as early as possible following approval and the scheme of arrangement involving PEP’s proposal being approved by the court.[33] Stevens remained employed with Spotless for the duration of the due diligence and on 30 July 2012 the bonus of $115,875 was paid to Stevens.[34]
[33]CB496.
[34]CB527.

Prior to the takeover on 15 August 2015, or perhaps earlier on Agati’s evidence,[35] Dixon had met privately with Agati.[36] At the meeting, Dixon asked Agati to prepare a calculation of Ms Field’s termination entitlements and on 17 August 2012 her employment was terminated.[37] As part of her redundancy package Ms Field was paid the Retention Bonus of 60% FAR contained in her Retention Plan agreement.
[35]T371 L23; T383 L30 to T384 L2.
[36]T511.
[37]T509 L26; CB154-156A.

The takeover

On 17 August 2012, the PEP management takeover of Spotless occurred and Dixon took charge. Dixon brought with him a team of new Senior Executives, many of whom had worked with him at his prior employer, Healthscope, including Pepe and Douglas.

Many of Spotless’ employees at all levels in the company were made redundant in the days and weeks following the PEP takeover of Spotless. Of the pre-takeover senior management of Spotless, only two remained after the takeover, including Stevens.[38]
[38]T336.

The corporate restructure of Spotless included the following relevant changes:

(a) the Chief Information Officer was now to report to the CFO, instead of the CEO;

(b) payroll was now to report to the CFO, instead of the Chief Information Officer; and

(c) a new organisational structure, including operating divisions, was implemented and these were centred around markets rather than services. The nine new operating divisions included the Airports Division. All divisions reported to Pepe, as the Chief Operating Officer.[39]

[39]CB176.

At the time of the takeover, Spotless was in the process of implementing a new companywide IT system, called ‘SAP’. The process of the implementation of SAP was known as ‘Project Springboard’.

Dixon gave evidence in relation to Project Springboard, that:

(a) he had become aware of SAP prior to the takeover during the due diligence process;[40]
[40]T336.

(b) in the 18 months prior to the takeover, $80 million had been spent on SAP;[41]
[41]T338.

(c) SAP was a complex system, the implementation of which was, at about the time of the Spotless takeover, out of control and expenditure on Project Springboard was unsustainable;[42]
[42]Ibid.

(d) he had no choice but to continue with the implementation of the new system because it had destroyed the pre-existing IT systems;[43]
[43]T337.

(e) there was an additional estimated sum of $120 million to be spent on the rollout of Project Springboard in 2013;[44]
[44]T338.

(f) Project Springboard was Dixon’s “number one issue walking in on day one”;[45]

(g) Stevens was the only person with the depth of knowledge of the SAP system and the pre-existing relationships with the contractors involved;[46] and

(h) the management team that Dixon had brought with him to Spotless did not include an IT person and Dixon had no intention of ending Stevens’ employment with Spotless.[47]

[45]T339.

[46]Ibid.

[47]Ibid.

There was no real contest at trial as to the accuracy of Dixons’ statements in (a) to (h) of the previous paragraph save as to the sum of $120m referred to in (e) above. Dixon clarified that the $120m he referred to was Stevens’ estimate as to the maximum amount of further expenditure on Project Springboard.[48] Senior Counsel for Stevens drew attention to the discrepancy of nearly $60m between the $120m that Dixon says Stevens had referred to in a presentation on the Monday 20 August 2012, and the figures at CB345 that were contained in the hard copy of the presentation on Wednesday 22 August 2012.[49] Dixon explained that that the $60m was probably not changed in the Report[50] because of the work involved in changing the underlying figures in a short period of time.[51]
[48]T441.
[49]T444.
[50]CB341.
[51]T443.

It was in this context that the meeting of 23 August 2012 took place between Dixon and Stevens.

Meeting of 23 August 2012

Although it was agreed by both Dixon and Stevens that a meeting took place between them at 1pm on 23 August 2012 in Dixon’s office, their accounts of what transpired at that meeting are radically different.

The competing versions of what was said between Dixon and Stevens on 23 August 2012 is of great significance in relation to Stevens’ claims in this proceeding.

Stevens’ account of the meeting

In relation to the meeting of 23 August 2012, Stevens’ evidence was, in essence, that:

(a) he had proposed the meeting take place to Dixon via email and had prepared an agenda for the meeting;[52]
[52]T154-155; and CB171-174.

(b) he gave Dixon a copy of the agenda and asked him if they could use it as a guide for the discussion;[53]
[53]T156.

(c) the items on the agenda were worked through sequentially at the meeting;[54]
[54]Ibid.

(d) he told Dixon that his role was redundant and Dixon agreed;[55]
[55]T157 L19-24.

(e) he asked Dixon whether he was aware of the retention agreement that he had in place, to which Dixon responded that he was;[56]
[56]T158 L18-21.

(f) he asked Dixon if he was aware that the agreement was drafted as relating to the payment of shares and that it should be changed to cash as the organisation was no longer publicly listed, to which Dixon responded “yes, of course, that’s fine”;[57]
[57]T158 L21-28.

(g) he confirmed his entitlement to the Retention Bonus and if he was made redundant that it would be paid, to which Dixon responded “yes, that’s fine”;[58]
[58]T158 L28 to T159 L1.

(h) he asked Dixon what his plans for the future were and Dixon commenced talking about a new organisational structure for Spotless, at which point Stevens started taking notes;[59]
[59]T161.

(i) Dixon told Stevens that he wanted Stevens to run the company’s new Airports Division;

(j) Stevens told Dixon that he wanted to make sure he had a ‘meaty’ role, and Dixon assured Stevens that his future role would be;[60] and

(k) he told Dixon that they should put an agreement in place, to which Dixon agreed, however, no written agreement was made.[61]

[60]T163-164.

[61]T166.

Dixon’s account of the meeting

Dixon’s evidence in relation to the meeting of 23 August 2012, was in essence that:

(a) he took control of the meeting with Stevens on 23 August 2012;[62]
[62]T346.

(b) he was primarily concerned with issues surrounding the SAP implementation and went through these issues with Stevens;[63]
[63]T346-347.

(c) he informed Stevens that he would no longer be responsible for payroll and would now report to the CFO, to which Stevens expressed concerns that this amounted to a demotion;[64]
[64]T348.

(d) Stevens reiterated his concerns about it being a demotion and told Dixon that he saw himself as a potential CEO;[65]
[65]Ibid.

(e) in response, Dixon made an offer to Stevens, saying that if Stevens helped him with the SAP implementation he would give Stevens a chance to move to a senior operating role in the business;[66]
[66]T349 L19-22.

(f) he did not offer Stevens Airports as, at the time, Dixon had not determined what division he would offer Stevens and would need to talk to Pepe about it first;[67]
[67]T350 L6-12.

(g) they did not discuss redundancy or converting Stevens’ Retention Plan award from shares to cash;[68]

(h) he may have been handed a document by Stevens towards the end of the meeting, but did not read it during the meeting;[69] and

(i) he did not discuss with Stevens the potential restructure of Spotless from service lines to market lines.[70]

[68]T350 L6-8 and L16-17.

[69]T351 L26 to T352 L4.

[70]T352 L9-12.

Events post 23 August 2012

Dixon gave evidence that it was not until a further meeting on 28 August 2012 that he went through the restructure plans for Spotless with Stevens and offered him the position of General Manager Airports, after discussing the matter with Pepe.[71]
[71]T352.

Stevens accepted the role of General Manager Airports.[72]
[72]T354 L28-29.

Stevens continued to work on the SAP implementation and also began transitioning into the new role. This involved developing an understanding of the Airports business and creating an organisational structure for the new division.[73]
[73]CB180-191.

On Friday 14 September 2012, Stevens met with Pepe to discuss the Airports Division of Spotless. At that meeting Stevens provided a typed memo to Pepe, which put forward his view that Airports as a division was not viable and the role of General Manager Airports should be made redundant.[74] Pepe’s evidence was that having flicked through to the back page of Stevens’ typed memo, where he had noted his view that ‘GM – Airports redundant’, Pepe asked Stevens if he wanted to leave Spotless. Stevens responded in the affirmative and after some further discussion it was decided that Stevens would think about it over the weekend and they would meet with Dixon on the Monday to talk about such matters.
[74]CB193-195; T171-175; T535-536.

Pepe’s evidence in relation to her meeting with Stevens on 14 September 2012, included:

Could you tell his Honour what happened at that meeting, where did it take place, what you said and what he said?---Okay. The meeting took place in my office. Ant came up to my office and he handed me the draft memo and said that he really wanted to talk about the plans for the airport sector and also the profitability of the airport sector.
What did you say to him?---And he then went on to say that he didn’t think that - he didn’t believe that it could be really profitable. He thought that there were significant issues with the sector and that yes, he thought it really wasn’t going to be profitable. I was a bit surprised at that. He had been in the job for a little over two weeks, he had been most - - -
Is that what you are saying to him?---I did say that to him.
Remember I said we have got to give an account of what you said and what he said?---I’m sorry.
You’ve told us what he said initially, now tell his Honour what you said?---Well, I said to him that I was a bit surprised with that statement because he had only been in the job for a very short time and that he had spent a lot of his time in the negotiation of both the – I can’t think of the name - there it is, the TCS contract for the SAP program and also on the Qantas negotiation, so I said to him that I was surprised he could come to such a conclusion in such a short time. Nevertheless, Ant went on to say that that was his conclusion and as he was talking, because I was surprised with this, I started to flick through the memorandum, because - - -
So that’s the memorandum at 193?---Correct, because I was really wondering, your Honour, where this was going. I was surprised with Ant saying that at the start of that meeting.
And continue to tell his Honour what you did and what you said and then what he said?---Okay. Then I quickly saw one of the options which had - - -
Where are we, what page?---195: "Option 1. Point 2, GM airports redundant", I saw that.
What did you then do?---When I saw that and Ant was still talking to me about the profitability issues of the airport sector, I said to him, "Let’s cut to the chase, Ant, what are you really saying here? Do you want to go?"
And what did he say?---He said that that was an option for him.
And what did you say?---I then started to - then I asked him, because I was surprised and I asked him did he have another job, did he want to go - did this mean that he really wanted to go, and he said to me yes, he did want to go. I was a bit surprised also, your Honour, in my own head I was thinking we had gone from an option to talking about Ant wanting to go. So then we stopped really talking about the profitability of the airport sector and started talking about Ant wanting to go.
Could you tell his Honour what was then said in relation to that topic, the topic of Ant wanting to go?---Yes. I asked him if he had another job and he said no, he didn’t have another job. I said to him that I was surprised that after such a short time in this position that he had made a decision so quickly, and he just kept come back to me that he didn’t think that the job was big enough in terms of revenue being there to make the sort of profits that we were after.
What did you say to him about that?---Well, again I reiterated that I thought it was far too soon for him to make that call. I then started to talk about ways in which I thought that we could improve the airports sector and, your Honour, this was the same that was happening right across the company. There were profitability issues everywhere so this was, in a sense, no different to what we were finding in other places, but we had a plan which I talked to Ant about -
- -
So rather than being general, can you tell his Honour what you said to Ant in this meeting about those matters?---Okay. I said that - I outlined how we should start to look at the costs in the airport sector, that we should start to look at the contracts in those areas, your Honour. I said that we needed to review staffing costs by looking at rosters, by looking at the scope of work. Were we, in those contracts, what we were being paid to do were we doing things that we weren’t being paid to do, because again, your Honour, it’s the things that we were finding in other contracts, and I discussed this with Ant. Then I also went into detail about how we could grow the airport sector and again it was about expanding our services. Ant was sceptical of this and said to me that he didn’t think that was possible from what he had seen and he certainly didn’t think that he could do that.

What did you say to him in response that?---Well, I said to him that if he put his mind to it, I believe that he could do it but if at the end of the day he didn’t want to do it, then there was nothing I could really do about that.
What did he say to that?---Well, he agreed with that.
Then what happened?---Then we - when I said to him, because I knew that Bruce was away that day, Bruce was interstate and I did want to talk to Bruce about this, and I said to Ant that I thought that he should really think about it at the weekend, don’t decide straightaway, and that we would both talk to Bruce on Monday morning when he was back in town.
You mentioned at page 195 of the memorandum the reference under option 1, point 2, "GM airports redundant"?---Yes.
Was that topic discussed?---What I did say to him was that I couldn’t make the GM airports position redundant because we had just established the sector and if he wasn’t going to be in that position, I would appoint somebody else to that position but that position would be ongoing. So the position itself, I remember very clearly saying that the position would not be made redundant.
Was anything said by Mr Stevens about the CIO role?---No.[75]

[75]T535 L20 to T539 L11.

As extracted in full in the paragraph below, Stevens’ evidence included him saying that after being asked by Pepe “do you want to just take a package”, he responded “yes, I do. I want to rely on the discussion I had with Dixon and it’s important to me that I get the paid calculation”.[76]
[76]T175.

Stevens’ evidence in relation to the meeting with Pepe on 14 September 2012 included the following:

Amongst these topics, which ones do you now recall were not the subject of discussion? --- So I got to, as I was before, we walked through in some detail the first page. We started on the top of the second page, 1 – we talked about point (d), the likelihood of recovery that Spotless would have in relation to the Qantas contract, an outstanding debt. I then moved forward a little bit. Vita then flipped over the page and was distracted at the time, I could see, reading the bottom of the page - sorry, court book 195, and at that point said, "Ant, I can see where this is going. Do you want to just take a package", and I said, "Yes, I do. I want to rely on the discussion I had with Mr Dixon and it's important to me that I get the paid calculation." She said, "Are you sure, do you want to think about that", and I said, "No, I'm sure", and she said, "Well, why don't we let the weekend transpire and we can catch up with Mr Dixon, the two of us", Bruce, Vita, myself, "on Monday and talk about it further." I said, "Okay, that's fine. I will think about it further over the weekend", and we concluded the discussion. So we didn't actually go through - - -[77]

[77]T175 L5-23.

Pepe did not agree with Stevens’ evidence as to that exchange which took place on 14 September 2012, and when asked by counsel for the defendant whether, as pleaded at [11] of the plaintiff’s Statement of Claim, Stevens had said anything to her along the lines of the position not being “a Senior Executive position with substantial profit and loss responsibilities as had been represented to him at the meeting on 23 August 2012”, Pepe responded in the negative.[78]
[78]See Statement of Claim dated 30 November 2012 at [11]; and T539.

As extracted in the passage of transcript above, Pepe’s evidence was that she told Stevens that she could not make the General Manager Airports position redundant because they had only just established the sector and if Stevens was not going to be in that position she would appoint someone else to that role.[79]
[79]T539.

At the meeting of 17 September 2012, between Stevens, Dixon and Pepe, it is common ground that Stevens confirmed his desire to leave Spotless. Stevens, Dixon and Pepe gave different accounts of the conversation that took place at that meeting. Pepe’s evidence was substantially in accord with Dixon on this exchange although her precise recollection of the relevant conversation differed slightly from Dixon. It is also common ground that earlier at the meeting between Stevens and Pepe on 14 September 2012 Stevens had told Pepe he was unhappy with the General Manager Airports position and he wanted to leave Spotless’ employ.[80]
[80]Plaintiff’s submission 18 November 2014, [21].

Stevens gave evidence that he said “… it’s very important to me that I receive my entitlements and to that end I would like to see the pay calc that reflects our agreement”.[81] To which Dixon responded “Yep, Ant, you’ll get paid your entitlements”.[82]
[81]T177.
[82]Ibid.

Dixon’s account of the exchange was that after a brief conversation about Stevens’ decision to leave, Dixon said “that’s it, I’m not going to talk you into staying, we will just pay you what you’re owed”.[83]
[83]T359.

Pepe’s evidence was that Stevens asked what he would be paid, to which Dixon replied “we will pay you whatever is in your contract, we will pay you what our obligations are”.[84]
[84]T541-542.

Later that day, on 17 September 2012, Stevens received a Manual Salary Calculation provided to him by Pepe.[85] The Manual Salary Calculation stated ‘these are estimates only until approved for payment’. It contained two payments of $477,400, one described as ‘Retention Bonus’ and the other described as the ‘Redundancy Payment’. The document also reflected other entitlements, deductions and the like. In the place the date of bank transfer was to be inserted, the document was endorsed ‘Draft 2’. The Manual Salary Calculation also stated that it was prepared by ‘Lisa Corcoran’, and checked by ‘Jessica D’Amicis’. That document was also unsigned in the place prepared for the “GGM’s Approval”.
[85]CB205; T178.

Ms Lisa Corcoran (Corcoran) gave evidence that she was instructed by Ms Kim Dodd (Dodd), then General Manager – Payroll, to prepare Stevens’ Manual Salary Calculation on 17 September 2012.[86] Dodd instructed her to include both a payment for the 12 month in lieu of notice and a payment for 12 month Retention Bonus. After considering Stevens’ Contract of Employment and file, Corcoran then queried Dodd as to why she thought Stevens was entitled to the Retention Bonus. Dodd answered by saying that the Retention Bonus was applicable to Stevens because there was to be a payout of the one year in lieu of notice, that would mean that those payments were made in respect of a period past 1 September 2013, and therefore the Retention Bonus became payable. Corcoran disagreed with Dodd’s assessment, but was informed by Dodd that the calculation had been approved by Douglas. Corcoran then went and prepared the Manual Salary Calculation as instructed.
[86]T691.

Dodd gave evidence that she was instructed by Douglas on the morning of 17 September 2012 to prepare a redundancy calculation for Stevens.[87] After picking up Stevens’ file from Pepe’s office, she raised with Douglas whether she was to use the letter regarding the Retention Bonus payment to undertake Stevens’ calculation. Dodd’s evidence was that after briefly looking at the letter, Douglas confirmed that the Retention Bonus payment was to be included in Stevens’ redundancy calculation. Dodd did not recall having a conversation with Corcoran as to whether or not the Retention Bonus was payable.
[87]T47.

Douglas gave evidence that he did not discuss Stevens’ termination entitlements with Dodd on 17 September 2012, and more specifically, did not discuss whether or not Stevens was entitled to the Retention Bonus payment of $477,400.[88]
[88]T625.

On 15 October 2012, Stevens received $477,400 less tax, in addition to his regular monthly pay.[89] It was common ground that the reason for this early payment, that is before Stevens’ termination date of 25 October 2012, was that for the purpose of preparing the Manual Salary Calculation the amount of $477,400 had been entered into the IT system and had not subsequently been deleted, and as a result was processed along with the rest of the October 2012 pay cycle.[90]
[89]T183; CB235.
[90]T55; T696-697.

On 18 October 2012, it was brought to Douglas’ attention by Mr Matthew Potter, National Human Resources Manager (Potter), that the Retention Bonus may not be payable to Stevens upon his termination.[91] Having considered Stevens’ Retention Plan letter, Douglas was of the view, which he expressed to Potter, that the Retention Bonus was not payable to Stevens.[92]
[91]T626; CB419.
[92]T626.

On 22 October 2012, at a meeting between Douglas, Potter and Corcoran, Corcoran told Douglas that the payment of the Retention Bonus had already been made to Stevens.[93] Douglas decided that this payment could be offset against what Spotless owed Stevens by way of termination in lieu of notice, since both payments were for $477,400 less tax.
[93]T627.

On 22 October 2012, Douglas also discussed with Pepe and Dixon his view that Stevens was not entitled to the Retention Bonus and that there had been a mistaken payment, however the mistaken payment could be offset. Later that same day, Corcoran drafted another Manual Salary Calculation for Stevens endorsed, ‘Draft 3’, which did not include a Retention Bonus.[94]
[94]CB248-252.

On 23 October 2012, at a meeting between Stevens and Douglas, Stevens was informed that he would not be receiving another payment of $477,400 less tax, and that instead Spotless would be treating the mistaken payment of the Retention Bonus on 15 October as a termination payment.[95]
[95]T185; CB253-261.

Stevens secretly taped the conversation he had with Douglas on 23 October 2012. In his evidence Douglas confirmed that he was not aware that Stevens was recording their conversation on Stevens’ mobile phone.[96]
[96]Douglas also confirmed in his evidence at T629 that the transcript of his conversation with Stevens on 23 October 2012 is correctly transcribed in exhibit CB253-261. Stevens accepted the accuracy of the transcript of his tape recordings of the meetings on 23 and 24 October 2012.

On 24 October 2012, Stevens met with Pepe and Stevens also secretly recorded this meeting.[97] On 25 October 2012, Stevens had his last day of employment at Spotless.[98]
[97]T187-T188; CB262-263.
[98]T189.

The Retention Plan

Fundamental to consideration of Stevens’ entitlement to payment of the Retention Bonus are the terms of the Retention Plan letter itself. The terms of the Retention Plan are, in my view, unambiguous and set out at paragraphs [44] and [45] above.[99]
[99]CB247B-247C.

Stevens was to be paid 100% of his FAR, payable in Spotless shares, on 1 September 2013, if he was still in the employ of Spotless at that time. Alternatively, a discretion existed in Spotless for the payment in full, or in part, of the Retention Bonus if Stevens left Spotless because of ‘Special Circumstances’. ‘Special Circumstances’ expressly included redundancy, but also “other circumstances that the Board determines from time to time”. For Stevens to receive a contractually based payment of Retention Bonus before 1 September 2013, would require either a new Retention Plan agreement, a variation of the existing Retention Plan agreement, or an exercise of discretion by Spotless on the basis of ‘Special Circumstances’ as contemplated in paragraph 6 of the letter from the Managing Director and Chief Executive Officer of Spotless to Stevens.

Notwithstanding the terms of the Retention Plan letter appearing to be clear and straightforward, Stevens considered himself entitled to payment of the ‘Retention Bonus’, as of right, if he was made redundant before 1 September 2013.

It appears that Stevens held this belief because of his view that his 12 month notice period notionally extended beyond 1 September 2012 and it appears because Mr Givoni and Ms Field, who also had these Retention Plan agreements, had both apparently been paid Retention Bonuses as part of their termination package upon being made redundant as part of the Spotless takeover.

However, there are at least two crucial differences between the situation of Mr Givoni and Ms Field, and that of Stevens.

Firstly both Mr Givoni and Ms Field were able to produce a letter from Spotless which altered their Retention Plan agreements so that the bonus would be payable in cash, not in shares, as a consequence of the resolution of the Human Resources Committee made on 14 March 2012. Stevens did not have such a letter in his possession, although evidence was given by Agati that such a letter had been prepared. This differentiation is however ultimately immaterial because Spotless conceded that if Stevens were otherwise entitled to a Retention Bonus, Spotless would pay that bonus in cash, principally because after the takeover Spotless Group was no longer a publicly listed company with shares freely tradable on the Stock Exchange.

Secondly, there was a key difference between the termination of Mr Givoni and Ms Field, and that of Stevens, in that Spotless decided, and then effected, the termination of Mr Givoni and Ms Field. However, in Stevens’ case, Stevens ultimately made his own decision to leave Spotless. By contrast with Mr Givoni and Ms Field, Stevens was an employee who Spotless wanted to keep and was offered the opportunity to continue his employment with the company and be paid the Retention Bonus on 1 September 2013 when it became due and payable.

It is clear that Stevens believed he was entitled to payment of the Retention Bonus because a 12 months’ notice period took him past the relevant date of 1 September 2013. In his conversation with Douglas on 23 October 2012, Stevens put his understanding and argument on this aspect as follows:

Well, I’ve I’ve I’ve been employed, I’ve got a notice period that’s 12 months. My employment has ceased as a result of redundancy. If I was to be continued to be employed, at my choice, then I would’ve been entitled to that but I haven’t been – that choice has been taken away. My role’s been made redundant. I’ve elected to take redundancy, I’ve got a 12 month notice period that clearly covers that period.[100]

[100]CB258.

I consider however that Stevens’ view as to the operation of the Retention Plan agreement is erroneous.

In the material period up to late October 2012, Spotless did not want Stevens to leave its employ and up until the meeting on 14 September 2012 between Stevens and Pepe, and Stevens’ presentation of his memorandum dated 14 September 2012,[101] Stevens himself did not consider that Spotless intended to terminate his employment.[102]
[101]CB193-195.
[102]T271 L13-17.

I consider that the evidence clearly establishes that it was Stevens’ own decision to leave Spotless’ employ in October 2012.[103]
[103]T261 L29-30; T275 L31, T276 L1-3 and L21-28; T487 L1-7.

Accordingly, in my view, Spotless did not terminate Stevens’ employment under clause 19.1 of the employment contract, or otherwise.

The additional incentive arrangements under the Retention Agreement of 11 October 2011 required that a relevant employee remain in Spotless’ employ until 1 September 2013 so as to be entitled to any Retention Bonus. Stevens did not. Stevens voluntarily ceased employment with Spotless on 25 October 2012.

In the result, I consider that Stevens therefore failed to qualify for a Retention Bonus under the Spotless Retention Plan.

Furthermore, I do not consider that Stevens has established that the Retention Agreement gives rise to any entitlement in Stevens on the basis that there has been, or should be, a discretionary allocation or payment of a Retention Bonus to Stevens in the circumstances. In my view, Stevens has not established any foundation for a right or entitlement to an allocation of shares (or payment of cash in lieu of shares) pursuant to paragraph 6 of the letter of 11 October 2011.[104] I observe that this paragraph of the Retention Plan permits Spotless to confer a benefit upon an employee but it does not oblige it to do so.
[104]CB247B.

Furthermore, although Stevens has argued the term “Special Circumstances” used in paragraph 6 of the said letter carried with it the extended meaning earlier referred to, Stevens has, I consider, failed to establish an applicable termination by Spotless of Stevens’ employment as required under the Retention Plan, and Stevens has also failed to establish any termination of his employment by Spotless by reason of a restructure or change in the state of affairs of Spotless Services or Spotless whereby Stevens previously occupied position no longer exists.

Accordingly, I consider that Spotless was under no obligation to pay Stevens the Retention Bonus under the terms of the Retention Plan agreement, upon his leaving the employment of Spotless on 25 October 2012, or prior to that date.

It is now necessary to consider whether a new agreement was reached between Stevens and Spotless which resulted in a Retention Bonus being payable.

Alleged Agreement with Dixon on 23 August 2012

Stevens’ contractual case in support of his entitlement to both $477,400 termination pay when he decided to leave Spotless, and his claim for an additional $477,400 entitlement in relation to a Redundancy Bonus, is also founded on what Stevens says Dixon said to him in Dixon’s office in a conversation on Thursday 23 August 2012. In essence Stevens says of that conversation in his Statement of Claim:

7.In or about August 2012 the defendant decided that, following a restructure, the plaintiff’s functions as chief information officer would be changed so that the plaintiff would report to the chief financial officer of Spotless Group and not to the chief executive officer, and the plaintiff’s position of chief information officer thereupon became redundant.
Particulars
The then Chief Executive Officer of the Spotless Group, Mr Bruce Dixon, told the plaintiff the matters alleged in paragraph 7 in a meeting on 23 August 2012.

8.On 23 August 2012 the parties agreed:
(a)that, following the restructure, the defendant would offer the plaintiff a new position as its General Manager Airports Division, which would be a Senior Executive position with “substantial profit and loss responsibilities”;
(b)that if the plaintiff became redundant, the defendant would terminate the plaintiff’s employment and pay the plaintiff his full termination benefits for redundancy under the retention plan, including an amount in lieu of notice equal to his FAR and a retention plan award equal to his FAR; and
(c)that in such circumstances any retention plan award would be paid as a cash bonus and not in shares.

Particulars
The agreement was oral and was made in the meeting on 23 August 2012 between Mr Dixon and the plaintiff.[105]

[105]Statement of Claim [7] and [8].

Dixon repudiates that in the conversation he had with Stevens:

(a) there was any discussion about redundancy of Stevens’ then position; and

(b) that he stated to Stevens that if he were to become redundant Spotless would pay Stevens an amount in lieu of notice equal to his FAR and a Retention Plan award equal to Stevens’ FAR.

Dixon’s evidence was:

(a) that at 23 August 2012 Dixon was not aware of the contents and terms of Stevens’ employment contract,

(b) that at 23 August 2012 he was unaware whether Stevens was participating in the Retention Plan; and

(c) there was no discussion at that time, or on any other occasion thereafter to the effect that if Stevens was to be made redundant he would be paid a Retention Bonus in cash.

I firmly consider that Dixon’s evidence as to the conversation alleged by Stevens on 23 August 2012 is the more likely version of this contentious conversation and that Dixon’s evidence is to be preferred to Stevens. This is because I consider Dixon’s evidence to be inherently more likely because of his unchallenged state of knowledge at the time of the meeting of 23 August 2012, detailed in the last preceding paragraph, and the improbability in those circumstances of Dixon discussing Stevens’ redundancy or arrangements relating to Stevens’ employment contract or Retention Plan entitlements.

Furthermore, I consider that it is also inherently most unlikely that Stevens’ version of what Dixon said and agreed on 23 August 2012 actually occurred, given that in subsequent meetings with Spotless Services Executives, relatively soon after 23 August 2012 in which the topic of Stevens’ entitlements, including to a Retention Bonus, were discussed, Stevens did not in a clear and affirmative way detail and rely on what he now says were critical statements and agreements by Dixon on 23 August 2012.

The transcripts of the conversations which Stevens had with Douglas on 23 October 2012,[106] and with Pepe on 24 October 2012,[107] reference earlier conversations, which were obviously of importance to Stevens, with Dixon, Pepe and Douglas.
[106]CB253-261.
[107]CB262-263.

The earlier conversations of importance to which Stevens refers in his secretly recorded conversation on 23 October and 24 October 2012, centrally concern the Retention Bonus which Stevens was intent on receiving in addition to his payment in lieu of 12 month notice.

Counsel for Stevens referred to the following extract of the recorded conversation Stevens had with Douglas on 23 October 2012, as amounting to a reference by Stevens to the agreement that had been reached:

[Speaking to Douglas] If you remember the process that I went through, it was very clearly documented, visited with both Bruce and Vita stating that my employment was terminated, I firstly went through um I was made redundant, I firstly went through a process with Bruce to confirm in writing that all my entitlements currently and in the future and I talked about the incentive agreement would be honoured, and that was put in the document to Bruce [emphasis added].[108]

[108]CB254; T815.

However at best, in those recorded conversations, Stevens makes a very general and oblique reference to an earlier visit with “Bruce”. Stevens did not in this recorded conversation with Douglas on 23 October 2012 refer to any agreement being earlier reached on such matters with Dixon, nor does Stevens refer to the matters he now specifies as agreed with Dixon on 23 August 2012. The conversation with Pepe on 24 October 2012[109] makes no reference to an agreement with Dixon on 23 August 2012 or to the terms of the agreement Stevens now asserts was made at that time with Dixon.
[109]CB262-263.

Furthermore, in the conversation with Pepe on 24 October 2012, Stevens asks whether this is Spotless’ considered and final position, to which Pepe replies “unless there is anything that changes that, and I can’t see that there is anything that changes that, except what is in file, that is our position.” At this point Stevens does not bring up the alleged agreement reached with Dixon on 23 August 2012, or the representations that were allegedly made by Dixon.

If on 23 August 2012 there had in fact been an agreement in the terms alleged by Stevens in paragraph [7] of his Statement of Claim, and there had been any form of acceptance by Dixon that Stevens’ position of Chief Information Officer had become redundant, it would be most unlikely that Stevens would not have referred to and relied upon those earlier alleged conversations with Dixon in support of his claims which were being discussed in plain terms on 23 October 2012 and 24 October 2012 with Douglas and Pepe respectively.

In my view, had there in fact been the alleged statements by, and agreement with, Dixon on 23 August 2012, it would be even more likely that Stevens would in conversation with Douglas and Pepe have clearly and consistently described and relied upon any earlier conversation and agreement with Dixon which supported his position, particularly given that Stevens planned to and implemented his own secret record of the conversations with Douglas and Pepe on 23 and 24 October 2012. Stevens neither clearly and consistently recounted his conversation of 23 August 2012 with Dixon to Douglas and Pepe, nor did he attempt, in any express or affirmative way, to rely on what he now says were critical earlier conversations and agreements with Dixon.

Further, I consider that the weight to be given to Stevens’ evidence in relation to his conversation with Dixon on 23 August 2012 is also diminished in comparison with Dixon’s evidence on the same matters, because Stevens’ evidence of this critical conversation[110] was not squarely put in detail to Dixon in cross-examination. Nor was the substance of the evidence which Stevens’ ultimately gave at trial in relation to critical parts of the meeting with Dixon on 23 August 2012[111] foreshadowed in Stevens’ outline of evidence.[112]
[110]T158 L19 to T159 L17.
[111]Ibid.
[112]Plaintiff’s Outline of Evidence dated 8 November 2013, [10]-[15].

Stevens did not seek to record or confirm his version of the important conversation with Dixon on 23 August 2012, notwithstanding that he forwarded by email his Memorandum which he used as his agenda for that meeting to Dixon five days later.[113]
[113]CB411-412.

I also consider that it would be more likely than not that if the statements Stevens claims were made on 23 August 2012 by Dixon were accurate, and included the agreement Stevens asserts, Stevens would have recorded and confirmed those matters in some fashion when he provided his Memorandum dated 23 August 2012 to Dixon by email.

Stevens had himself planned, as recorded in his Memorandum dated 23 August 2012,[114] to have any relevant agreement recorded and, therefore, if in fact agreement had been reached with Dixon on 23 August 2012, it is very likely that Stevens would have taken steps to ensure that a “written commitment” covering the matters Stevens desired to have agreed, would have been initiated by Stevens soon after 23 August 2012. No such thing occurred.
[114]CB412, last paragraph.

Stevens own evidence of the concluding parts of his discussion with Dixon on 23 August 2012 reflects that there was no agreement reached between him with Dixon on any aspect of their discussion.[115]
[115]T159 L12-15.

For the above reasons, I strongly prefer Dixon’s version of what transpired and was said in his conversation with Stevens on 23 August 2012. I am also therefore far from satisfied on the evidence, which I note is devoid of any concrete contemporaneous documentary evidence in support of Stevens’ version of the “agreement” with Dixon on 23 August 2012, that Stevens has proved, on the balance of probabilities, his alleged agreement with Spotless Services, that if Stevens became redundant, Spotless would terminate Stevens’ employment and pay Stevens his full termination benefits for redundancy under the Retention Plan, including an amount in lieu of notice equal to his FAR and Retention Plan award equal to his FAR, and do so in cash.

Conversely, for the same reasons, I prefer Dixon’s evidence as to the conversation with Stevens on 23 August 2012 and Dixon’s evidence that there was no discussion in relation to Stevens’ redundancy or the redundancy of the position of Chief Operating Officer,[116] and his evidence that he did not agree that following the planned restructure of Spotless, Stevens would be offered the position of General Manager Airports.
[116]Plaintiff’s Submissions dated 18 November 2014, [25(c)].

Dixon’s evidence, which I wholly accept, was also that he needed to retain Stevens, not make him redundant.[117]
[117]T350 L13-15.

Spotless also argue that there was no legally binding agreement reached on 23 August 2012 because no consideration passed between Stevens and Spotless in relation to that alleged accord. However, as a result of my findings in relation to the alleged agreement of 23 August 2012, it is no longer necessary for me to decide this issue.

Finally, Spotless submits that the arrangement which Stevens asserts was reached on 23 August 2012 was not committed to writing at any stage and it follows there is no evidence that the written and signed Contract of Employment variations referred to in clause 24 of Stevens’ Contract of Employment[118] were satisfied and accordingly no effective alteration to the Contract of Employment occurred. However, as with Spotless’ argument based on a want of consideration, because of my findings in relation to the alleged agreement on 23 August 2012, it is not necessary for me to deal with this further Spotless argument.
[118]CB125.

Counsel for Stevens also made reference to other extracts of the recorded conversations Stevens had with Douglas on 23 October 2012 and Pepe on 24 October 2012, however those extracts were, in my view, clearly references by Stevens to the meeting of 17 September 2012 and the Manual Salary Calculation that he was given on that day.[119]
[119]T815-816.

The meeting of 17 September 2012

A further potentially important meeting occurred on 17 September 2012 between Stevens, Dixon and Pepe.

The closing submissions for Stevens appear to characterise this as the critical meeting so far as Stevens’ case is concerned. I note however that as Stevens’ case was put, the alleged agreement and understandings relied upon by Stevens on 17 September 2012, in large measure, in turn, rely upon the earlier alleged agreement with Dixon on 23 August 2012.

Stevens submits that:

The plaintiff’s case in a nutshell is that on 17 September 2012, the defendant [Spotless Services] agreed with him [Stevens] that his employment would be terminated on an agreed basis of redundancy, and to pay him a Retention Bonus of twelve months remuneration and a further twelve months remuneration in lieu of notice.[120]

[120]Plaintiff’s Closing Submissions dated 18 November 2014, [1].

Somewhat quizzically Stevens also submits that the “agreement” referred to in the last preceding paragraph was reached between the parties without regard to whether or not Stevens had in fact been made redundant or whether or not the strict terms of his Retention Bonus agreement required Spotless to pay him a Retention Bonus.[121]
[121]Ibid.

For the reasons which follow I reject all of Stevens’ assertions in the two preceding paragraphs:

(a) Stevens’ endeavour in these proceedings to elevate the conversations between him and Dixon and Pepe of 17 September 2012 to the status of actionable representations and a concluded agreement, both of which assertions I reject for the reasons which follow, was predicated on the alleged agreement of 23 August 2012 being effective to establish an entitlement to a redundancy bonus payment.[122] However, as I have elsewhere decided, Stevens and Spotless did not make on an agreement on 23 August 2012 as alleged by Stevens in paragraphs [7] and [8] of his Statement of Claim herein on 23 August 2012.

(b) Stevens’ asserted contractual entitlement based on the alleged agreement of 17 September 2012 is also predicated upon Stevens being made redundant, although Stevens submits that the 17 September 2012 agreement was reached by the parties without regard to whether or not he had in fact been made redundant. However, as I have elsewhere addressed, I do not consider that Stevens has established that he was made redundant by Spotless Services or Spotless, nor has he established that his position, namely that of Chief Information Officer, was made redundant. Stevens left the employ of Spotless voluntarily and of his own accord.

[122]Ibid, [23].

Stevens’ submits that on 17 September 2012 he met with Dixon and Pepe. Stevens’ submits that acting on his understanding that his position was treated by both parties as having been made redundant and acting on his (Stevens’) understanding of the benefits he was entitled to receive following his discussion with Dixon on 23 August 2012, Stevens said he wished to leave Spotless, but asked that he first be given a written document showing a calculation of the benefits he would receive on termination.[123]
[123]Ibid.

However Stevens’ asserted understanding on 17 September 2012 was, I consider, flawed and unreasonable because the view he held (advanced in this proceeding) as to his entitlements, in particular to a Retention Bonus, was based on his alleged discussions with Dixon which I have held do not support the agreement alleged on 23 August 2012.

Neither does it add anything to Stevens’ case that “Dixon confirmed (on 17 September 2012) that Stevens would be paid his entitlements”. Dixon’s evidence in this regard was that when he addressed the topic of what Stevens would be paid, he (Dixon) confirmed that Stevens would be paid what he was entitled to under his employment contract.[124]
[124]T541 L29 to T542 L3.

For these reasons I am wholly unpersuaded by Stevens’ submission at [25] of his written submissions of 14 November 2014, that on 17 September 2012, a binding agreement was reached between Stevens and Spotless as to the terms on which his employment would end, principally because on Stevens’ case his assertion about an agreement on 17 September 2012, is necessarily underpinned by the unsubstantiated agreement he alleges on 23 August 2012.

Furthermore, in addition to Stevens failing to establish his redundancy or the redundancy of the position of Chief Information Officer, and Stevens’ own decision to voluntarily leave Spotless’ employment, the following matters also, in my view, defeat Stevens’ case in relation to his suggested understanding on 17 September 2012 and in relation to the agreement he asserts came into being on that date:

(a) Stevens accepted that neither Dixon or Pepe stated to him that Spotless had decided to pay him a Retention Bonus, whether or not he had such an entitlement under his Contract of Employment.[125]
[125]T278 L24-30.

(b) Stevens accepted that there was no reason for Spotless to make a payment to him unless it was obliged to do so under his Contract of Employment.[126]

(c) Stevens’ evidence as to the 17 September 2012 meeting, in important aspects, was not put to Dixon and Pepe.[127] Furthermore, Stevens’ Outline of Evidence dated 8 November 2013 did not in any substantial way foreshadow the evidence Stevens would give at trial in the two above respects referenced.

(d) As a result of my findings in relation to the meeting between Dixon and Stevens on 23 August 2012, I also consider that in instances of direct conflict between the evidence of Stevens, and that of Dixon or Pepe or Douglas on any matter in issue, the evidence of Dixon and Pepe and Douglas should be given more weight than Stevens’ evidence.

[126]Ibid.

[127]T177 L11-19 and T276 L14-20.

For this reason I ascribe more weight to, and also prefer as inherently more likely in the circumstances, the testimony of Dixon and Pepe, rather than the evidence of Stevens in relation to what was said at the meeting of 17 September 2012. In this regard I have also considered but reject as inconsequential those instances in the evidence cited by Stevens where Stevens argues Dixon gave inconsistent or somehow conflicting evidence.

I accept the Spotless’ submission that Dixon and Pepe, and indeed Stevens, gave evidence that in the conversation on 17 September 2012, Dixon stated to Stevens that he would be paid whatever he was owed under his contract.[128]
[128]T359 L11; T479 L11; T479 L13-27.

Further, Dixon’s evidence, which I accept, was as follows in relation to this issue. Dixon:

(iii) stated that the details of Stevens’ entitlement were irrelevant so long as Spotless honoured its contract;[129]
[129]T479 L21.

(iv) denied that the word “redundancy” and “package” were used;[130]
[130]T481 L2; T483 L16-18.

(v) denied that Stevens said “it’s very important to me that I receive my entitlements and I want to see the pay calculation reflecting our agreement”;[131]
[131]T485 L8-11.

(vi) denied that he said to Stevens that he would be “paid his entitlements”;[132]
[132]T485 L12-13.

(vii) stated to Stevens that he would “get paid whatever is under your contract”;[133]

(viii) intended to convey to Stevens that he would be paid whatever he was entitled to under his contract.[134]

[133]T485 L14-16.

[134]T485 L20-21.

Pepe’s evidence was that:

(ix) at the start of the meeting on 17 September 2012, she told Dixon that Stevens had come to the conclusion on the Friday night that he wanted to leave the company and she asked Stevens whether that was correct, and Stevens said yes.

(x) she stated to Stevens: “Are you still of the view that you want to go,” to which he responded “Yes”.[135]

(xi) Stevens wanted to know what he would be paid and Dixon said: “We will pay you whatever is in your contract, we will pay you what our obligations are”.[136]

[135]T541 L22.

[136]T541 L31.

Furthermore, Stevens agreed that he was told by Mr Dixon and Ms Pepe that if he left he would be paid whatever entitlements he had under his contract.[137]
[137]T279-280; Defendant’s Closing Submissions 21 November 2014, [40].

I accept the substance of the evidence of Dixon and Pepe as to the meeting on 17 September 2012, namely to the effect that all that was conveyed to Stevens at that meeting was that when Stevens left Spotless’ employ he would be paid whatever he was due under his Contract of Employment and no more.

Further, in my view, the exchanges between the Spotless representatives and Stevens at the meeting of 17 September 2012, in substance, also conveyed their intent that Spotless was not creating or acceding to any new or additional payments in respect of Stevens.

I also consider that it is inherently likely and consonant with commercial reality, that on 17 September 2012 the Spotless representatives involved in the meeting with Stevens were intent upon holding Stevens to his contractual rights and agreeing nothing more. After all, Stevens had prior to 17 September 2012 exhibited a lack of interest in the responsibilities associated with the Airports Division of Spotless and Stevens had done so knowing that Dixon and Pepe wanted him to take on those responsibilities. Furthermore by 14 September 2012, Spotless Services’ executives were aware that Stevens had said he wanted to leave Spotless.

I also consider that the Manual Salary Calculation document[138] provided to Stevens by Pepe on 17 September 2012 is not a document with contractual effect but rather a non-binding estimate generated as part of Spotless’ payroll related administrative processes. I also consider there was nothing promissory or contractually binding in the provision of the Manual Salary Calculation to Stevens on 17 September 2012 and on other occasions. I have reached these conclusions for the following reasons:
[138]CB205.

(a) The statement made to Stevens in the meeting on 17 September 2012 was that he would be paid his entitlements under his contract. Accordingly the Manual Salary Calculation documents was intended to reflect Stevens’ contractual entitlement and not to create entitlements.

(b) Because even according to Stevens, approval of the amount to be paid had already occurred by the time that the Manual Salary Calculation was given to him and the Manual Salary Calculation was an administrative step.[139]

(c) The Manual Salary Calculation document was expressed to contain “estimates only until approved for payment”. It was headed “Draft 2”. The box at the bottom that said “GGM’s Approval” was blank and unsigned.[140]

(d) Because, it can be inferred that Stevens knew that being handed the Manual Salary Calculation document had to be authorised as being in accord with his contract. Stevens called Dodd at around 5pm on 17 September 2012 to ask whether she had received an instruction from Douglas to calculate his payment.[141] Stevens was familiar with payroll procedures, and appreciated Douglas needed to check his contract to approve his entitlements.[142] Stevens did not speak to Douglas about his entitlements until the secretly taped meeting on 24 October 2012.[143]

[139]T330 L1-29

[140]CB205.

[141]T180 L3-9.

[142]T180 L11-17.

[143]CB253; Defendant’s Closing Submissions 21 November 2014, [42].

The agreement alleged by Stevens to have been made on 17 September 2012, may not have been compliant with Clause 24 of the Stevens’ Employment Agreement because contrary to the express agreement of the parties, that is Stevens and Spotless, the alterations to that agreement which Stevens asserts were agreed on 17 September 2012, were not reduced to writing in a document signed by Stevens and Spotless. However, because of my primary finding that no agreement to the effect alleged by Stevens was made with Spotless on 17 September 2012, or effected by the provision of the Manual Salary Calculation, in my view the effect of Clause 24 of the Employment Agreement does not need to be determined.

As at 17 September 2012, the only instrument signed by each party which altered the Employment Agreement by providing for a retention entitlement was the letter dated 11 October 2011 from Mr Farnik that was signed by Stevens on 20 October 2011.[144] A draft letter from Agati to Stevens exists, however only an unsigned copy is relied on by Stevens.[145] Furthermore, Agati did not directly inform Stevens about the arrangements in the letter,[146] did not know whether Stevens had received it and did not see confirmation from Stevens that he had received the letter at the time.[147] Stevens evidence was that he first saw the unsigned letter at trial in re-examination.[148] When, on 22 October 2012, Pepe asked Stevens for “other documentation that could demonstrate that the Retention Bonus was payable”,[149] Stevens provided only the letter dated 11 October 2011.[150] Stevens provided only that letter because there was no other signed written document between Stevens and Spotless that governed Stevens’ retention payment entitlement.[151]
[144]CB147.
[145]CB153A.
[146]T516.
[147]T521.
[148]T328 L1-13.
[149]T550 L29.
[150]CB247A-247C.
[151]T289 L17; Defendant’s Closing Submissions 21 November 2014, [45].

Additionally, the conduct of Stevens is inconsistent with his case that he had an agreement of the kind for which he now contends on 17 September 2012. In particular:

(a) The only documentary record of the meeting on 17 September 2012 is a note prepared by Stevens before the meeting, as a prompt or agenda for use by Stevens.[152] However that document does not make any reference to Stevens ensuring that he is paid a Retention Bonus before agreeing to leave Spotless.[153]
[152]T176 L11.
[153]CB175.

(b) Pepe asked Stevens for any documentation available to support his claim for the Retention Bonus. Stevens did not in any respect suggest that his entitlement to a Retention Bonus arose as a result of any oral agreement or arrangement with Pepe or with Dixon.[154] Neither did Stevens seek to rely on the meeting dated 23 August 2012.[155]

(c) Stevens secretly tape-recorded conversations with Spotless personnel and did so without asking for their permission.[156] Stevens agreed that this constituted unethical behaviour.[157] However Stevens did not confront Dixon about their alleged agreement, nor consistent with Stevens’ earlier strategy record their conversation whilst doing so.[158]

(d) The transcript recording on 24 October 2012,[159] disclosed that Pepe stated to Stevens that it was “always the intention, and still is the intention, to pay you in accordance with you (sic) contract and our contractual obligations – we haven’t moved from that”.[160] Pepe was there explaining that the Retention Plan letter dated 11 October 2011[161] did not entitle Mr Stevens to a Retention Bonus payment. At no point in that conversation did Stevens explain to Pepe that the letter dated 11 October 2011 was irrelevant, and that his entitlement arose from an oral agreement with her, or with Dixon on 23 August 2012, nor did Stevens explain what Stevens now alleges occurred on 17 September 2012.[162] Stevens’ case, in this regard, was not put to Pepe in cross-examination, nor did he put it case to Pepe on 24 October 2012.[163]

[154]T289 L21-23.

[155]T289 L18-20.

[156]T290 L31.

[157]T291 L28-31.

[158]T307.

[159]T313.

[160]CB262.

[161]CB147.

[162]T314 L12-16.

[163]Defendant’s Closing Submissions 21 November 2014, [47].

As a result of my findings in relation to the alleged agreements and understandings asserted by Stevens in relation to the meeting of 17 September 2012, and his receipt of the Manual Salary Calculation, I do not consider that it is necessary for me to deal with Spotless’ further argument concerning want of consideration.

Accordingly, I reject for the several reasons I have explained, Stevens’ submissions that an agreement was made between Stevens and Spotless on 17 September 2012, or that on and after 17 September 2012 Stevens can be accepted as having acted reasonably on an understanding arising from that meeting and the meeting of 23 August 2012,[164] or that any legally binding agreement was reached between Stevens and Spotless as to the terms on which his employment would end, on the basis of the above agreements asserted by Stevens and the provision to Stevens of a Manual Salary Calculation,[165] and Stevens asserted belief that this calculation was correct and in accordance with his agreed entitlements following the asserted agreement with Dixon on 23 August 2012.[166]
[164]Plaintiff’s Submissions 18 November 2014, [23].
[165]CB205.
[166]Plaintiff’s Submissions 18 November 2014, [24] and [25].

Manual Salary Calculation gives rise to no entitlements

Furthermore, I am not persuaded that any agreement arose simply as a result of the production of the Manual Salary Calculation and provision of it to Stevens late on 17 September 2012, and Stevens’ view that the calculation was correct and in accordance with his entitlements, as appears to be asserted in Stevens’ final submissions at [24] and [25]. My reasons for rejecting Stevens’ argument on this aspect are:

(a) the Manual Salary Calculation states at the top ‘these are estimates only until approved for payment’. This, in my view, indicates that the amounts contained in the document had not yet been approved for payment;

(b) at ‘date of bank transfer’ on the Manual Salary Calculation it states ‘Draft 2’, which indicates the document is a draft only and not a final copy;

(c) at the bottom right hand corner of the Manual Salary Calculation it has ‘GGM’s approval’, with space for a signature and a date that is empty;

(d) the Manual Salary Calculation has not been signed, indicating that it has not been authorised by anyone in a position to do so;

(e) also based, as earlier explained, on my findings as to what transpired at the meetings of 23 August, 14 September and 17 September 2012; and

(f) also based, as earlier explained, on the terms of the existing Contract of Employment of 17 December 2008 and the Retention Plan agreement of 11 October 2011.

For these above reasons, I find that no agreement was reached between the parties on 17 September 2012 that Stevens, or the position of Chief Information Officer, would be made redundant, or that Stevens would be entitled to or paid the Retention Bonus. Furthermore, I find that the Manual Salary Calculation issued 17 September 2012 is of no contractual effect and Stevens’ employment agreement was governed by the Employment Contract of 17 December 2008, and the Retention Plan Agreement of 11 October 2011.

Payment of the Retention Bonus on 15 October 2012

On 15 October 2012, Stevens received payment of an ‘annual bonus’ of $477,400 less tax.[167] Spotless Services contends that the payment should be set off against Stevens’ entitlement to 12 months in lieu of notice because it was made to Stevens as a result of mistake of fact and mistake of law, and a failure of consideration.[168]
[167]CB235
[168]Defendant’s Closing Submissions 21 November 2014, [60].

For the reasons I have earlier explained, I find that at no time was Stevens’ entitled to be paid a Retention Bonus of $477,400, or in any other amount.

The mistakes alleged by Spotless are the making of the payment on 15 October 2012, prior to Stevens’ final day on 25 October 2012. The evidence is to the effect that payment occurred prior to Stevens’ final day on 25 October 2012, as a result of the Retention Bonus payment being left in the payroll software following the preparation of the Manual Salary Calculation. It was common ground that termination payments were paid as one lump sum when an employee left the employment of Spotless.

The relevant mistake of law is asserted by Spotless to be Dodd’s belief that the Retention Bonus was payable to Stevens as part of his termination payout, as had occurred in respect of Ms Field and as a result of Dodd’s erroneous view that the notice period of 12 months took Stevens past 1 September 2013.[169]
[169]T87 L21-31.

Dodd also gave evidence that Douglas instructed her to include the Retention Bonus in Stevens’ Manual Salary Calculation, after she raised with Douglas the Retention Plan letter in Stevens’ file.[170]
[170]T48.

However, I am of the view, that it is more probable than not, that this instruction was not given by Douglas to Dodd for the following reasons:

(a) Douglas gave evidence, which I accept, that he did not meet with Dodd on 17 September or instruct her to include the Retention Bonus payment of $477,400 in Stevens’ Manual Salary Calculation;[171]
[171]T625.

(b) if Dodd was of the view that Stevens was entitled to the payment of the Retention Bonus, in my view it is probable that she would not have needed to raise the need for an instruction with Douglas;

(c) inconsistencies between Dodd’s outline of evidence and the evidence she gave as to the sequence of events prior to her alleged query of Douglas and evidence by Dodd which contradicted her outline of evidence,[172] lead me to place less weight on Dodd’s evidence in instances where it is in conflict with Douglas’ evidence, which I regard as consistent and reliable;
[172]T74-77.

(d) when Douglas considered whether Stevens should be paid a Retention Bonus, on 18 October 2012, he checked Stevens’ contract and decided that no such bonus was payable. In my view this also renders it less probable than not that on 17 September 2012 Douglas would have instructed Dodd to pay “Anthony” his retention bonus;

(e) Dodd did not mention that she had been instructed by Douglas to pay a retention bonus to Stevens when she was later told Stevens’ payment was to be reversed;[173]

(f) it appears more likely than not that Dodd instructed Corcoran to include the Redundancy Bonus for Stevens before she says she spoke to Douglas, which is at odds with Dodd obtaining authorisation from Douglas before believing she could organise Stevens’ payment of a Retention Bonus,[174] and similarly even on Dodd’s evidence she did not query with Douglas whether Stevens was in fact entitled to a Retention Bonus;[175] and

(g) the time of events in the morning of 17 September 2012, including in relation to the email from Douglas to Dodd at 11:38am,[176] and the creation by Corcoran of Draft 1[177] of the Manual Salary Calculation document at 12:00pm,[178] and Douglas needing to participate in a Fair Work Commission conference at 12:00pm,[179] in my view makes it unlikely that Dodd had time to speak with Douglas, particularly given the time that it would have taken Dodd to locate and retrieve Stevens’ file.[180]

[173]T121 L18-T125 L6; T126 L15-31; T135 L28 to T136 L14.

[174]T85 L4-18; T96 L10-12.

[175]T93 L24 to T94 L4.

[176]CB413.

[177]CB196.

[178]CB417; T694 L19.

[179]CB414; T623.

[180]T78 L15 to T79 L16; T79 L20 and 28.

In my view, in the above, Spotless has established both a mistake of law and a mistake of fact in relation to the payment of the sum of $477,400 by way of Retention Bonus to Stevens on 15 October 2012. The mistake of law was in essence Dodd’s erroneous view as to Stevens entitlement to such a payment. The mistake of fact was that Dodd did not have authority herself to pay Stevens a Retention Bonus[181] and the payment of Stevens was not approved and was made by mistake.[182]
[181]T60 L4-9.
[182]T697 L1-9, T699 L23-31, T700 L1-9.

I also accept that neither Douglas, Pepe nor Dixon authorised the payment of the Retention Bonus made to Stevens on 15 October 2012 and were unaware that it had occurred until 22 October 2012.

Here, in my view, there has both been a payment of moneys by Spotless to Stevens for a consideration which has failed or there is no consideration moving from Stevens to Spotless, and Stevens has no title to retain the subject moneys.[183] Furthermore, the subject money was paid as a consequence of a mistake of law, in circumstances where Stevens was not legally entitled to receive it[184] as result of a mistake of fact. Further:
[183]Roxborough & Ors v Rothmans of Pall Mall Australia (2001) 208 CLR 516 at [27].
[184]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 376.2, 378.4.

(xii) Spotless’ payroll department had not been authorised by Douglas to process the Retention Bonus payment; and

(xiii) Stevens' entitlements under his Contract of Employment were only due and payable upon the termination of his employment and he was mistakenly paid on 15 October 2012 as a result of an error within the Spotless payroll department.

In these circumstances, Spotless has a prima facie entitlement to recover, or set off, the moneys and Stevens bears the onus of proving why an order for restitution, alternatively, set off, would be unjust.[185]
[185]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 376.2, 384.2; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14 at [67] per Hayne, Crennan, Kiefel, Bell and Keane JJ; Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6 at [20] per Chernov JA.

To reiterate, I consider in the circumstances that Spotless has established that there has been a relevant mistake of law and a mistake of fact and Spotless enjoys a prima facie entitlement to repayment, or set off, of the money had and received.[186] The onus is then on Stevens to raise “any matter or circumstance which shows that his or her receipt (or retention) of the payment is not unjust”.[187]
[186]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353.
[187]Ibid.

Stevens has not established a change of position on his part in reliance upon the payment of 15 October 2012 so as to render any Spotless’ requirement that it be repaid, or in this instance set off, unconscionable. This is because Stevens had already made his decision to leave Spotless prior to receiving the Manual Salary Calculation or being paid the Retention Bonus on 15 October 2012.

Having found that no agreement was reached between Stevens and Spotless on 17 September 2012, or at any preceding time that varied Stevens’ Contract of Employment or written Retention Plan, Spotless is entitled to set off the payment made on 15 October 2012 against any entitlement to a termination payment of 12 month in lieu of notice, which Stevens may have against Spotless Services or Spotless as a result of the mistake of fact, or alternatively, as a result of the mistake of law.

Was Stevens, or his position, made redundant?

Counsel for Spotless submitted that ‘redundancy’ was to take its meaning from the definition of ‘redundancy’ in the Trust Deed:

Termination of employment of a participant with an employing company by reason of restructure or change in the state of affairs of the employing company whereby the position previously occupied by the participant no longer exists with the employing company.[188]

[188]T728; CB60.

Since Stevens decided to leave the company by at the latest 14 September 2012 and the restructure had occurred in late August 2012, Stevens was clearly not made redundant by reason of restructure. The evidence was that both the position of CIO and General Manager Airports still exist within Spotless.

Although an administrative aspect of the role of CIO had changed in that the CIO now reported to the CFO, instead of the CEO, and payroll now reported to the CFO instead of the CIO, in my view these reporting changes did not give rise to the positions under consideration being redundant or non-existent.

Counsel for Spotless also referred to the useful and thorough summary of principles relating to redundancy undertaken by Kyrou AJA in Gamboni v Bendigo and Adelaide Bank Ltd[189].
[189](2013) 39 VR 578 at [43]-[52].

Counsel for Stevens submitted that the test for ‘redundancy’ articulated in the cases is ultimately irrelevant, because Spotless represented and promised to Stevens in the context of his termination that it was being done on the basis of redundancy.[190] Stevens argued that the decision to terminate his employment for redundancy was made on 17 September 2012 when Stevens was provided with the Manual Salary Calculation that included the redundancy payment, numerous references to ‘redundancy’, along with the payment for termination in lieu of notice.
[190]T754-755.

With regard to the position of CIO or General Manager Airports being made redundant, I accept the evidence of Pepe and Dixon that they did not ever agree with Stevens that those positions were to be made redundant. I also accept the evidence that upon Stevens leaving the employ of Spotless those positions remained in existence and were filled by other employees. I do not accept Stevens’ claim that there had been many references to “redundancy” by Spotless in connection with Stevens which, on Stevens’ submissions, demonstrated and established that his position had been, or was to be, made redundant.

In Whittaker v Unisys Australia Pty Ltd[191] Ross J notes that:
[191](2010) 26 VR 668.

Redundancy is defined in the following terms:
Redundancy is what happens to a position when work (or a major portion of it):
- no longer needs to be performed.
…

The policy defines redundancy in terms of what happens to a position, hence it is narrower in compass than redundancy at common law.
…
The “position” here is Mr Whittaker’s former VP and GM role. That position is to be understood in terms of the collection of functions, duties and responsibilities formerly entrusted to Mr Whittaker. As I have already noted the elements that made up that role were redistributed between Ms Carter and Mr Whittaker. Hence it cannot be said that Unisys no longer needed those functions, duties and responsibilities to be performed. Accordingly, the first circumstance in which redundancy may arise does not apply here.[192]

[192]Ibid, 697-698.

The same circumstances apply here, where redundancy was defined in the Trust Deed as referring to a position, not the person. Although changes were made to the position of CIO, it could not be said that the position no longer exists at Spotless.

To the extent that references were made to ‘redundancy’ in the Manual Salary Calculation, I accept that they were to assist Stevens for tax purposes. Further, I consider these references to ‘redundancy’ were likely to have been made by those who prepared the Manual Salary Calculation without an appreciation of the legal meaning of redundancy, as defined in the Trust Deed and as pertaining to a position, not a person. Therefore I do not consider such references are ultimately determinative.

Accordingly, I find that the positions of CIO and General Manager Airports were not made redundant by Spotless. I also find that while Stevens’ termination was referred to as being for redundancy, these references arose out of a decision to assist Stevens for taxation purposes and an incorrect understanding of the legal meaning of ‘redundancy’ as defined in the Trust Deed.

Misleading and deceptive conduct claim

As a result of my findings above with regard to the meeting of 23 August 2012, the misleading and deceptive conduct claim concerning the three alleged representations made on 23 August by Dixon falls away in relation to the representations that if Stevens were terminated for redundancy he would be paid the Retention Bonus and that the Retention Bonus would be payable in cash and not shares.

Stevens’ case in relation to misleading and deceptive conduct and associated claim for damages pursuant to section 236 of the Australian Consumer Law is based on the Representations as defined in [9] of his Statement of Claim. Those Representations are in turn based on the matters said to be agreed by Dixon on 23 August 2012.[193]
[193]Statement of Claim [8].

I have held that the statements and agreements alleged by Stevens in paragraph [8] of his Statement of Claim, have not been made out, for the reasons I have explained above.

I also observe that it is self-evident that the statement alleged by Stevens in paragraph [8(a)] of his Statement of Claim is, standing alone, incapable of giving rise to any material deception on Stevens part or any loss and damage to Stevens. This is because Stevens, eschewed the position referred to in [8(a)] of his Statement of Claim from about the time, on his own evidence, it was foreshadowed to him, and also because I have found that Stevens had himself decided to leave Spotless by, at the latest, 14 September 2012.

Furthermore, Dixon gave evidence that he offered Stevens the position of General Manager Airports at a further meeting on 28 August 2012 but not at the meeting on 23 August 2012, although Stevens gave evidence that the suitability of the General Manager Airports role was discussed with him at the meeting of 23 August 2012.

I am satisfied, for the reasons I have earlier identified in relation to acceptance of Dixon’s evidence in preference to Stevens on matters in issue which are directly contradicted by Dixon, Pepe and Douglas, that Dixon did not offer Stevens the position of General Manager Airports at the meeting of 23 August 2015, but did in provisional terms about five days later.

Furthermore, accepting that Dixon did state to Stevens that the position of General Manager Airports was a Senior Executive position with “substantial profit and loss responsibilities”, for the following reasons I consider that any misleading and deceptive conduct claim founded on this alleged representational element alone would still fail because:

(a) the position in issue could be termed a “Senior Executive position”. As at 28 August 2012, Stevens was at the most senior level of management, other than Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer.[194] Until 18 September 2012, the day after Stevens had told Spotless that he was leaving, Stevens described himself as a “Senior Executive” to Douglas;[195]
[194]T272.
[195]T181.

(b) the position of General Manager Airports could be characterised as having “substantial” profit and loss responsibilities. Pepe gave evidence that the Airports Division had approximately 1,850 staff, a very large number of contracts, and revenues of around $160m.[196] Stevens gave evidence that the revenue of the Airports Division was in the order of $150-$200m, and that he was responsible for about 1,500 staff.[197] On his Linkedin page, Stevens represented to the public that he was responsible for roughly $200m turnover, and 1,800 staff;[198]

(c) Stevens led no evidence to the effect that the position of General Manager Airports was not a Senior Executive position with substantial profit and loss responsibilities; and

(d) as I am not satisfied that Stevens was entitled to payment of the Retention Bonus under the written Retention Plan agreement as at 23 August 2012, therefore Stevens could not have suffered damage in the sum of $477,400, or otherwise, if he acted in reliance upon the said representation in accepting the position of General Manager Airports.

[196]T531.

[197]T273.

[198]CB556; T274.

Accordingly, Stevens misleading and deceptive conduct claim in respect of the three alleged representations said to be made on 23 August 2012 fails.

Estoppel

Stevens submits that there is an actionable estoppel which should prevent Spotless from now denying that Stevens was made redundant in circumstances where it is asserted Stevens’ redundancy was represented to him by the Manual Salary Calculation, and where Stevens has continually been treated by Spotless as entitled to payment of 12 months in lieu of notice as if he were redundant.

For an estoppel to have arisen there must be an unjust departure by Spotless from an assumption which Spotless had some part in causing Stevens to adopt or accept for the purpose of their legal relations.[199]
[199]Australia Financial Services and Leasing Pty Ltd v Hill Industries (2014) 307 ALR 512 (Gageler J) at 556-557.

In Grundt v Great Boulder Mines Ltd[200], Dixon J stated that the basal purpose of the doctrine of estoppel is to:[201]

avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it.

[200](1937) 59 CLR 641.

[201]Ibid, 674.

In the present circumstances, an estoppel has not been made out because Stevens had already made his decision to leave Spotless on 14 September 2012, restated on 17 September 2012, a point in time before he received the said Manual Salary Calculation that contained the Retention Bonus sum and before the mention of redundancy which Stevens’ alleges occurred on 17 September 2012. Further, I have decided that Stevens was not induced by an agreement with, or any representation by, Dixon or Pepe that he would be paid a Retention Bonus, prior to Stevens making his decision to leave Spotless, or at all.

To the extent that Stevens gave evidence that he wanted to see his Manual Salary Calculation and confirm his entitlements before making a final decision to leave Spotless on 17 September 2012, this was contradicted by his evidence that on 14 September 2012 he had already decided to leave Spotless.

Further, when it was conveyed to Stevens that a mistake was made regarding the payment of the Retention Bonus, offers were made to Stevens by Pepe to the effect that his termination could be unwound and he could remain at Spotless. Stevens was not interested in doing so.

With regard to the alleged fundamental inconsistency of Spotless’ position in treating Stevens as entitled to 12 months FAR in lieu of notice, as if Spotless were terminating Stevens’ employment, this position, in my view, is explained by reference to clause 19.1(b) of the Contract of Employment. Notwithstanding that neither Stevens or the position of CIO had been made redundant by Spotless, and further Stevens’ employment had not been terminated by Spotless, Stevens’ payment of 12 month FAR in lieu of notice under clause 19.1(b) was, it appears, regarded as appropriate by Spotless. The acceptance of this position by Spotless is implicit in the decision made by Douglas to treat the mistaken payment of 15 October 2015 as the termination payment.

For these reasons, I do not consider that Spotless’ conduct caused any harm or detriment to Stevens and, in my view, Stevens’ estoppel claim must fail.

Conclusion

In summary, Stevens has failed to establish his claims in contract, misleading or deceptive conduct and estoppel for payment of damages in the sum of $477,400 or related damages. I therefore dismiss Stevens’ claims in this proceeding.

Spotless has established its entitlement to set off the payment made to Stevens on 15 October 2012 against any entitlement Stevens may have to a termination payment of 12 months FAR in lieu of notice, as a result of the above identified mistakes of fact or law, and pursuant to the equitable rights earlier referred to which avail Spotless. This set off will have the just and fair result of preventing Stevens from retaining the sum of $477,400 already paid by Spotless, and at the same time asserting that a further $477,400 is payable on account of Stevens entitlement to pay in lieu of 12 months’ notice.

Orders

I shall order that:

(a) The plaintiff’s claims be dismissed.

(b) The defendants’ counterclaim be allowed, and Spotless be entitled to set-off the sum of $477,400 earlier paid to Stevens on about 15 October 2012, against any sum payable by Spotless to Stevens in relation to Stevens’ entitlement to payment of salary in lieu of notice of termination.

I shall hear the parties as to the appropriate form of final orders and, if necessary, as to costs.

[2015] VSC 746

10 December 2015