Stevens v Spotless Management Services Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0016

ANTHONY STEVENS	Applicant
v
SPOTLESS MANAGEMENT SERVICES PTY LTD	Respondent

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JUDGES:	KYROU and McLEISH JJA and ELLIOTT AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	6 October 2016
DATE OF JUDGMENT:	30 November 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 299
JUDGMENT APPEALED FROM:	[2015] VSC 746 (Digby J)

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CONTRACT – Employment – Dispute over applicant’s entitlements upon leaving employ of respondent – Judge found parties did not reach oral agreement – Appellate review of primary judge’s findings of fact – Whether payment made by respondent to applicant for failed or no consideration – Whether payment made due to mistake of fact or law – Fox v Percy (2003) 214 CLR 118; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679, applied – Appeal allowed.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr N J O’Bryan AM SC with Mr J B McDougall	A J Macken & Co
For the Respondent	Mr P J Jopling AM QC with Mr E A Gisonda	Rigby Cooke

KYROU JA
McLEISH JA
ELLIOTT AJA:

TABLE OF CONTENTS

The applicant’s employment arrangements

The meeting of 23 August 2012 (the applicant and Dixon)

Developments after 23 August 2012

The meeting of 17 September 2012 (the applicant, Dixon and Pepe)

Events after the meeting of 17 September 2012

Events of October 2012

The trial judgment

Proposed grounds of appeal

Appeals against findings of fact

Ground 1 — the 23 August meeting

Ground 2 — the events of 17 September

Ground 3 — Consideration

Ground 4 — Mistake

Conclusion

This application for leave to appeal concerns a dispute about the amount due to be paid to the applicant following the termination of his employment as a senior executive with the respondent. The applicant was employed pursuant to a contract of employment and associated arrangements. His case at trial was that there was a subsequent oral agreement entered into between the parties regarding the termination of his employment, which the respondent failed to honour. The trial judge did not accept that such an agreement had been entered into, and dismissed the applicant’s claim accordingly.

The proposed grounds of appeal principally involve challenges to findings made by the trial judge in respect of two critical meetings. It is convenient to explain the contractual basis for the applicant’s employment before turning to the circumstances giving rise to the dispute.

The applicant’s employment arrangements

The applicant was employed by the respondent as Chief Information Officer (‘CIO’) for Spotless Group Ltd (‘Spotless’) from 2 March 2009 under a contract of employment entered into on 17 December 2008. By cl 4.2(a), it was provided that the applicant would report directly to the Managing Director and Chief Executive Officer of Spotless. Clause 22.4 stated that the contract ‘supersede[d] all previous agreements in respect of the [applicant’s] employment by the [respondent] and embodie[d] the entire Agreement between the parties’. By cl 24, the contract could only be altered in writing signed by each party.

Clause 19.1 was in the following terms:

The [applicant] may terminate this agreement by:

(a) giving not less than 6 months notice in writing.

(b) giving to the [respondent] written notice, effective immediately, within 6 months of a material diminution to the [applicant’s] duties and responsibilities.

The [respondent] may terminate this agreement by giving not less than 12 months notice in writing or by paying the [applicant’s] Fixed Annual Remuneration which would have accrued to the [applicant] during the balance of the required notice period.

If the [applicant’s] employment is terminated by the [applicant] pursuant to clause 19.1(b), the [respondent] will pay to the [applicant], 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 at the date of termination.

In October 2011, Spotless separately made offers to, and put in place, retention plans for three of its key senior executives, including the applicant. The letter of offer provided that, if the applicant remained in continuous employment with Spotless from 1 September 2011 to 1 September 2013, he was entitled to receive shares in Spotless (then an ASX-listed company) equivalent in value to a payment of 12 months’ Fixed Annual Remuneration (‘FAR’) as at 1 September 2013.

On 17 August 2012, following a change of control of Spotless, a new management team led by Bruce Dixon (Managing Director and CEO) took charge. The team included a new Chief Operating Officer, Vita Pepe, and a new General Manager — Human Resources, John Douglas. The new controlling entity was Pacific Equity Partners, a private equity firm. Spotless ceased to trade on the ASX at this time. At the time of the takeover, Spotless was in the process of implementing a new company-wide IT system called ‘SAP’, under a project known as ‘Project Springboard’.

As soon as the new management team was in place, the employment of the Group General Manager — Managed Services, Wendy Field, was terminated, by a letter dated 17 August 2012 from Dixon. Field was one of the other senior executives in whose favour a retention plan existed. In her case, the plan had been amended by a letter from Spotless dated 3 July 2012 specifying that any amount payable under the retention plan would be paid in cash, rather than in shares. A similar letter had been prepared in the case of the applicant, and there was evidence that it was signed on behalf of Spotless, but the letter appears not to have been sent. The third executive, Michael Givoni, was Group General Manager, Development. He received a similar letter and his employment was terminated not long after the takeover.

The retention plans of both Field and Givoni specified that they would be paid 60 per cent of their FAR if they were still employed by Spotless on 1 September 2013. The payment was also due, as was the 100 per cent payment in the case of the applicant, in the event of ‘Special Circumstances’ as defined in the relevant trust deed referred to in the letters providing for the retention plan. The definition of ‘Special Circumstances’ referred to retirement, redundancy, death, permanent disablement or other circumstances determined by the Board from time to time.

The meeting of 23 August 2012 (the applicant and Dixon)

The applicant met with Dixon on 23 August 2012 to discuss his continuing role with Spotless. The two men had met previously, including in Board presentations the applicant had made during the previous six days, and they had discussed various matters by telephone, but this was their first private meeting. There is a substantial factual dispute between Dixon and the applicant as to what was discussed at this meeting, but the applicant does not challenge the judge’s finding that no agreement was reached on that day. Although the applicant pleaded that an agreement was reached at this meeting, his case was ultimately that the operative agreement upon which he relied was made on 17 September 2012. It is convenient to consider the evidence of what occurred at the 23 August meeting before turning to later events.

According to the statement of claim, at the meeting on 23 August 2012 Dixon represented to the applicant (and agreed) that:

(a)he would be offered the role of General Manager — Airports, a senior executive position with ‘substantial profit and loss responsibilities’;
(b)if he were made redundant, his employment would be terminated and he would be paid his full termination benefits for redundancy under the retention plan (ie a sum in lieu of notice equal to his FAR and a retention plan award also equal to his FAR); and
(c)the retention plan award would be paid in cash, not shares.

In further and better particulars, the applicant claimed that, at the commencement of the meeting, he gave Dixon a copy of discussion points he had prepared. During the meeting Dixon described a revised corporate structure he proposed to introduce and the applicant took notes of the structure on the back of his copy of the discussion points. The applicant claimed that Dixon told him that the payroll function was to be removed immediately from the responsibility of the CIO and that the CIO would report to the Chief Financial Officer, Josef Czyzewski. He said that Dixon told him that he would commence as General Manager — Airports (reporting to Pepe as Chief Operating Officer) once other responsibilities he held as CIO, including for Project Springboard, had been transferred to Czyzewski.

The amended defence and counterclaim portrayed a different version of events. The respondent claimed that at the meeting:

(a)Dixon told the applicant that as CIO he would now report to Czyzewski rather than to Dixon;
(b)the applicant told Dixon that he was an operations person and wanted a position with profit and loss responsibilities; and
(c)Dixon told the applicant that if he assisted the respondent with its information systems issues, Dixon would make an offer of a position running a division of Spotless.

The amended defence and counterclaim went on to allege that Dixon offered the applicant the position of General Manager — Airports on 28 August 2012.

On that day, a general notice was issued to staff advising of a new corporate structure and stating, among other things, that the applicant was to lead the newly formed Airports Division as its General Manager.

These conflicting accounts were given and expanded upon in the evidence adduced at trial. In his evidence, the applicant said that Dixon agreed that the applicant’s role was redundant; that Dixon was aware of the retention plan; that Dixon agreed that the retention bonus would be paid if the applicant were made redundant; and that they both agreed that a written agreement should be put in place to document these arrangements.

The applicant said that he passed Dixon a copy of a document headed ‘Bruce Dixon and Anthony Stevens 23/8/12 1:00 pm’ as a guide for the discussion. Near the top of the document, the following appeared:

Current Situation:

· IT function to move reporting and responsibility to CFO

· Payroll function to move reporting and responsibility to CFO

· Likely outcome that Project Springboard will be significantly reduced in scope (demobilisation) with then incremental ~$2.5M investments addressing key legacy system integration requirements.

My role as CIO (as a result of the above) is redundant.

The applicant said that he went through what was stated in the document and said he was keen to understand Dixon’s future plans. He said that Dixon agreed that the applicant’s current role as CIO was redundant.

Towards the bottom of the document, under the heading ‘Bruce:Requested For Consideration Only ’, there were three numbered paragraphs, the first of which stated ‘Agreement that my current and future employment entitlements will remain unchanged’. As to this, the applicant gave the following evidence in chief:

So I started by asking Bruce whether he was aware of the retention agreement that I had in place. He responded he was. I said, ‘You’re aware of the fact that it currently is drafted as relating to the payment of shares.’ I said to Mr Dixon, ‘Obviously in your shoes it doesn’t seem to make sense to me that you would issue shares to pay that retention bonus and that cash would make a lot more sense, given that the trading organisation is no longer listed’, and Bruce said, ‘Yes, of course, that’s fine.’ I went on to say that I wanted to confirm my entitlement about a retention bonus and in the instance that I was made redundant, that that would be paid. Mr Dixon said, ‘Yes, that’s fine.’

The third numbered paragraph referred to ‘detailed insight in relation to a P&L role’. The applicant said that at this point Dixon explained his proposed restructure of the organisation and the applicant made notes on his copy of the discussion document. The applicant wrote ‘Airports’ next to the numbered paragraph and more detailed notes on the reverse of the document, including ‘AS’ above ‘Air’. The applicant said that Dixon had told him that he thought he should run airports, and that the applicant had replied that he would do so on a trial basis and report to Dixon and Pepe.

The concluding paragraph of the document, headed ‘Proposed Next Step’, referred to a written commitment ‘covering the above’. The applicant said that he and Dixon had agreed that an agreement would be a good idea, but this was never done.

Dixon’s evidence was markedly different. He said that the applicant had telephoned him about two weeks before the change in ownership and asked him if he intended removing his responsibility for payroll and having him report to the CFO, as Dixon had done in the previous organisation he managed. Dixon said that he told the applicant that this was his present intention but he did not yet have a firm position and they should talk about it when he started. After Dixon started, the applicant gave some presentations to the Board concerning Project Springboard. Dixon was very concerned about the possibility that addressing problems associated with the project would cost $120 million.

In relation to the meeting on 23 August 2012, Dixon said that he took control of the meeting and told the applicant that he wanted him to concentrate on controlling the implementation of Project Springboard, as his sole responsibility, reporting to the CFO rather than to Dixon. Dixon told the applicant that the SAP system was ‘an absolute mess’ and not to worry about other IT issues in the business. He told the applicant he would not be responsible for payroll. The applicant told him he saw this as a demotion, and Dixon replied that it was not, but that if he helped fix the problems with Project Springboard he would give him a senior operating job in the business. Dixon’s evidence in chief continued:

Anthony asked what would the role be in operating, and I said, ‘I don’t know. I need to talk to Vita Pepe’, the COO, because all the operating divisions report to her but he has my word that we will assist in his career and give him an option … So we both agreed at the meeting that he would help on the SAP and in return I would give him a chance at a senior operating role and I would talk to Vita in due course.

[COUNSEL]: But at that meeting, did you identify the nature of the role that you might give him?---No, I didn’t, because again I needed to talk to Vita because we had not determined — I was a little bit unsure who Vita had slotted into the various nine divisions. We had agreed on about five or six of the nine, so I needed to talk to Vita.

Dixon denied telling the applicant that, if he became redundant, he would be paid his full termination benefits, including cash under the retention plan, totalling twice his FAR. He said that, to the contrary, he needed to retain the applicant and his priority was getting him to commit to fixing the SAP system, which remained ‘the number one issue we had’. Further, Dixon said that the CIO position continued to exist, with the role and reporting line foreshadowed to the applicant.

Dixon said he had no recollection of seeing the document the applicant had prepared during the meeting and had not read it until the court case. He denied having any discussion with the applicant about restructuring Spotless on 23 August, but had done so on 28 August. He said that, the previous day, after a few days spent thinking which division would suit the applicant, he told Pepe that he had done a deal with the applicant that he would help fix the SAP system in return for a senior operating role, and that Dixon wanted him to operate the airports division. Dixon said that he made the offer of that position to the applicant at a meeting on 28 August, and the applicant accepted the position, commencing in early October conditional on the SAP system being fixed, at that meeting. Dixon said that no issue about redundancy was discussed at the second meeting. He could not recall the applicant taking notes at either meeting.

In cross-examination, the applicant ‘categorically’ disagreed with the suggestion that Dixon opened the meeting on 23 August 2012 by saying that SAP was a mess and the number one priority. He agreed that he knew before the meeting that Dixon wanted to get the cost of Project Springboard under control. He said that the discussion point document was in front of Dixon during the meeting and the two of them were pointing to topics and speaking to them. The applicant was ‘absolutely’ certain that his notes on the reverse of the document were made in the meeting and not in a meeting with somebody else at a later point in time. He rejected the suggestion that he and Dixon had discussed the restructure only at a later time. He did not recall Dixon offering him the airports role or discussing the restructure on 27 or 28 August.

It was put to the applicant in cross-examination that the suggested provision that the retention benefit would be paid in cash, rather than shares, had not been discussed at the meeting and that the discussion points contained no handwritten annotation that a change had been agreed. Nor had his outline of evidence mentioned such a discussion. He denied that making provision for a cash payment would be a change, rather than a clarification based on established practice:

Sorry, so we are not at cross-purposes, it was really important for you at this point in time on 23 August to get a change to your retention agreement to ensure that you would get cash in the event that you were made redundant?‑‑‑What I was seeking to clarify was that on the basis that my role was made redundant, that I would be paid two components, one was the retention bonus, one was the 12 months in lieu of notice and that was what was entitled to me. Subsequent to that, the logical flow in my mind was the form of payment and that’s where I discussed with Mr Dixon that the best, the most logical thing was for that payment to be made in cash, to which he agreed.

I put to you that what you wanted from him was an unconditional agreement that a benefit in cash would be paid as opposed to the payment being in the discretion of the board, as was the position in relation to the 11 October agreement?---The agreement I had with Mr Dixon in the meeting was that two things would be paid out. He confirmed that with me. Two things would be paid, the retention bonus and the 12 months in lieu of notice.

So these were significant variations to the agreement on your case, were they not, to the letter of 11 October?---Not as I saw them.

They didn’t need documenting?---As I said before, your Honour, a week earlier, a peer of mine went through exactly the same process and had been paid. I knew the retention agreement that she had received, bar the magnitude, 100 per cent versus 60 per cent, was the same in form and substance, that was it.

On your understanding of what had happened to Ms Field, did you assume that if you chose to leave, you would receive a cash retention payment because that’s what she had got?---In essence, yes.

The applicant denied that Dixon and Pepe, during August 2012, simply told him that he would receive his contractual entitlements.

Dixon firmly denied that the word ‘redundant’ had been used by the applicant during the 23 August 2012 meeting. He agreed in cross-examination that the organisational restructure was discussed:

Mr Dixon, Mr Stevens said to you immediately when you were discussing all this with him that he was very concerned about the demotion that was implicit in these arrangements on the 23^rd — I’m talking about your discussion on the 23^rd — he said to you immediately, ‘I am troubled that you are in effect demoting me’, didn’t he?---Yes, he did, yes.

So you were very conscious of the fact that he was becoming unsettled or nervous about his position?---Yes.

Mr Dixon, it was in that context, wasn’t it, that he said to you, ‘In effect, you’re making my CIO role redundant’, he said that to you, didn’t he?---No, he didn’t.

He didn’t?---No.

So your evidence is the word ‘redundant’ was not used in this meeting, is that your evidence?---Correct.

It was further put to Dixon that his outline of evidence had stated that the applicant had given him a memorandum of discussion points at the start of the meeting. He denied ever having told anybody that this had happened and could not explain how his outline contained that statement.

Developments after 23 August 2012

The applicant gave evidence that, after the meeting on 23 August 2012, he and Dixon went to Pepe’s office and Dixon told her that the applicant was ‘going to look after airports’. As noted above, Dixon said that he had told Pepe of this decision on 27 or 28 August 2012, and had not decided on the appointment during the earlier meeting.

Pepe’s evidence regarding the discrepancy was equivocal. In her evidence in chief, she was asked about a discussion with Dixon on 27 August 2012. She said that Dixon had come into her office and said that he had had a discussion with the applicant and that both Dixon and the applicant thought that the airports general manager position would be a good move for the applicant and that Dixon ‘was likely’ to offer him that position. Dixon told Pepe, she thought jokingly, that she had no choice in the matter. She then contacted the applicant and told him she was very pleased that he was going to take the position.

In cross-examination, Pepe gave the following evidence about the selection of the heads of the new operating divisions:

Your discussions about the reorganisation were very well advanced by 17 August, weren’t they?---In terms of what the market segments would be, yes. There were really only two.

In the days after you got there, you started immediately identifying who would be the people who would be the heads of these new divisions, didn’t you?---We did start to talk about potential people to fill those positions, yes, we did.

So certainly by, let’s say the 23^rd, a few days before this announcement, most of those slots had been filled in your mind, correct?---Yes.

Was Stevens in fact the last one to be identified as going to head up one of these divisions?---Yes.

When do you say the last piece of the jigsaw puzzle was put in?---On the day that Bruce came into my office to tell me, which was — I think it was 23 August.

On the 23^rd?---Yes, it was.

That’s when he walked in and said, ‘I’ve got your head of airports, it’s going to be Anthony Stevens’?---Yes, that’s right.

It was not suggested to Pepe that the applicant had been party to that conversation.

Counsel for Spotless returned to the matter in re-examination:

And you had a conversation with Mr Dixon about Mr Stevens fitting into the position of general manager of airports, did you not?---Yes, I did.

You gave evidence yesterday about a conversation that you had with Mr Dixon about that topic and you’ve given evidence today about a discussion you had with Mr Dixon about that topic. Can you just tell his Honour the date on which you say you first had the discussion with Mr Dixon about Mr Stevens filling that position?---That was the day before the — it was the day that Bruce came into my office before this was announced, the day before.

There was no re-examination about the content of the conversation.

On 28 August 2012, an announcement was made which included the fact that the applicant would fulfil the role of General Manager — Airports from early October. He continued to work on the SAP implementation and also began transitioning into the new role.

On Friday 14 September 2012, the applicant met with Pepe to discuss the Airports Division. At that meeting, the applicant provided a typed memo to Pepe, which stated his view that the Airports Division was not viable and presented options for the role of General Manager — Airports, including that it be made redundant. Pepe gave evidence that, having flicked through to the back page of the memo, where the applicant had noted his view ‘GM — Airports redundant’, she asked the applicant if he wanted to leave Spotless. The applicant responded in the affirmative and, after some further discussion, it was decided that he would think about it over the weekend and they would meet with Dixon on the following Monday to talk further.

The applicant gave the following evidence in chief about this conversation:

Vita then flipped over the page and was distracted at the time, I could see, reading the bottom of the page … 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.

The applicant was relevantly cross-examined as follows:

She said, ‘Let’s cut to the chase, what you’re really asking for us a redundancy’, did she not?---No, she said, ‘Ant, you just want to take the package.’

Her evidence will be, ‘Let’s cut to the chase, what you’re really asking for is a redundancy’, and what you said was, ‘Yes, that’s an option’?---Yes, as I said, she used the word ‘package’ in the discussion that I had with her.

That’s your recollection?---Yes.

Then she said, ‘Do you want to go’ and you said yes, you did?---Yes.

The applicant was not cross-examined about having made reference to the conversation with Dixon or his desire to ‘get the paid calculation’.

Pepe was asked in her evidence in chief, by reference to the pleadings, whether the applicant had said anything to her on 14 September 2012 along the lines that Dixon had represented anything to the applicant on 23 August 2012 about the airports position having substantial profit and loss responsibilities. She said that he had not. She was not asked whether the applicant had said that he wanted to rely on the discussion he had with Dixon and ‘get the paid calculation’.

The meeting of 17 September 2012 (the applicant, Dixon and Pepe)

On the morning of Monday 17 September 2012, Pepe told Dixon that the applicant wanted to leave Spotless and Dixon agreed to meet with the applicant. Pepe gave the following evidence:

I advised Bruce that Ant had given me a memorandum on the Friday and that Ant had expressed a desire to leave the company, he didn’t want to stay any more, and we didn’t really go into the details. Bruce really wasn’t interested, he said to me, ‘Well, if he wants to go, he wants to go’, and I said to Bruce that I would like to [sic] Ant to come to the office and talk to Bruce directly about it and Bruce said to me, ‘That’s not necessary’ and I insisted that it was necessary. I wanted Ant to come and talk about it because I had also said to Ant that I wanted to give him the opportunity to think about it over the weekend.

Dixon described this discussion this way:

Ms Pepe said that she had just been advised, I think she said she had an email from Anthony saying he wants to — that the airport GM should be made redundant. I said to Vita, ‘You’ve got to be kidding me. We have just put Anthony in the role, so I want to see Anthony myself’, from that meeting.

Did you ask Vita to show you the document she was referring to?---No, I didn’t, no.

…

What did Vita say to you during that meeting about what Anthony had told her about the role of general manager, airports division?---Vita mentioned, ‘Anthony said that the division was not big enough for him and the profitability was not large enough for him.’

What did you say to Vita?---I said, ‘That’s ridiculous, it’s one of our nine operating divisions and it’s a key division’, and it still remains a key division today.

Then what was said?---(a), I asked [sic] her that I wanted to talk to Anthony myself, given the agreement we had previously, I wanted to make sure that everything was going well from his side in the sense [that] nothing has happened that I don’t know of. So I asked to see Anthony myself.

The applicant then met with Pepe and Dixon, where he confirmed his desire to leave Spotless. This meeting is critical to the applicant’s claims. There is a dispute between the parties as to what was said at the meeting on 17 September 2012, and the consequences that flowed from that meeting and the provision to the applicant of a document called a ‘Manual Salary Calculation’. The applicant’s case at trial was that on 17 September 2012 the respondent agreed to terminate his employment on the basis of redundancy, and to pay him a retention bonus of 12 months’ FAR and a further 12 months’ FAR in lieu of notice. The respondent denied that any such agreement was made and said that, if it had been, it would have failed for want of consideration.

The applicant’s and Pepe’s evidence was that the applicant asked for confirmation of what he would be paid on termination. On that afternoon, the applicant was provided with the Manual Salary Calculation, which set out an estimate of termination payments to be paid to him on 19 October 2012. It is convenient to set out the relevant evidence regarding the meeting before returning to the Manual Salary Calculation document.

The applicant’s evidence was that he had prepared a handwritten note before the meeting, to use as a prompt. The applicant gave the following evidence:

So we sat down at Bruce’s round table in his office. Vita said to me, ‘Ant, I’ve spoken to Bruce about our discussion on Friday. I understand you want to take a package, is that right’, and I said, ‘Yes, I’ve thought about it over the weekend, that’s right, I would like to take a package.’ Mr Dixon said, ‘Well, Ant, that’s disappointing. You were one of a couple that we decided to keep on’, I said, ‘I understand, but that’s that.’ I said, ‘It’s very important’ — they asked me, ‘What’s the issue’, and I said, ‘Well, I don’t think the role is suitable. We talked about the fact that it should be meaty, I don’t think it is. I don’t think it’s viable as a business unit and I shared that view with Vita on Friday.’ Vita said, ‘Well, we have got a different view, Ant’, and I had said, ‘Well, I’m just working off the information that we have got.’ I can’t remember exactly who said it but Bruce or Vita said, ‘Okay, so you want to take a package’, and I said, ‘Yes, but 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’, referring to — looking at Bruce, and he said, ‘Yep, Ant, you’ll get paid your entitlements’, and I said, ‘Okay, that’s fine.’ He said, ‘Okay’ and that, as best as I recall, concluded the meeting.

In cross-examination, the applicant gave the following evidence:

Is it fair to say that going into the meeting on the 17^th you had already decided to leave the company?---Yes, consistent with my discussion with Ms Pepe on the 14^th, I agreed I would take a package, and she referred to it, and so in that context, your Honour, the answer to the question is yes.

… On the Friday she had asked you to think about your decision to leave?---Yes.

You said you had made up your mind to go but yes, you would think about it. I put it to you that going into the meeting on the 17^th, you had decided you were going to leave the company?---That’s right.

It was [your] decision to leave Spotless, was it not?---It was my decision to accept or rely on the agreement that I had with Mr Dixon on the 23^rd, that I had established well and I confirmed that in the meeting.

But it was your decision to leave? Forget the basis upon which you say you were going, you were the one who said, ‘I’m going to go’?---I said that was — I was relying on their offer and accepting that and so in that context, yes.

I put it to you that it’s not in that context at all. I put it to you that you told them you’d decided you wanted to leave and you told them that first on the 14^th and you told them again on the 17^th?---There’s part of the discussion that’s not referenced by Mr Jopling, your Honour, in the sense that I said very clearly to Mr Dixon and Ms Pepe, I wanted to see the calculation and my expectation, consistent with the agreement that I had with Mr Dixon, was that it include both the severance, 12 months in lieu of notice and the retention bonus and that triggered the events that followed.

The cross-examination continued:

Spotless wasn’t trying to agree an amount that it would need to pay so that you would leave, was it?--- … No, in fact we discussed that quite explicitly.

But they weren’t trying to agree an amount that it needed to pay you so that you would leave the company?---It was as simple as reconfirming the agreement in place and saying to Ms Pepe, ‘I would like to see the paperwork that reflects the agreement, including those two sums.’ I can’t express it in the terms that you have, Mr Jopling.

HIS HONOUR: Mr Jopling is looking at the other side of the coin. That was your thinking about what you wanted to clarify, Mr Jopling’s asking you whether it is correct or incorrect to say at any point up to 17 September 2012 Spotless were seeking to agree an amount so that they could procure your departure?---No, I would say — I say it was discussed at that meeting, the amount that was reflective of my departure.

Because you wanted that clarified, not Spotless wanting it clarified so they could procure your departure?---Correct.

I think that’s the difference?---Your Honour, that’s right. It was as simple as, it was obviously — put it this way, I wouldn’t leave and I don’t think anyone would leave without having an understanding of the — clarifying the terms associated with the departure, so that’s at that point on the 17^th, all I was seeking to clarify.

The applicant was then asked by counsel about what was specifically said:

In that meeting on the 17^th, neither Mr Dixon nor Ms Pepe said to you, ‘Regardless of your entitlements under the contract, Spotless had decided to pay you a retention bonus’?---No, they didn’t say those words, to be clear.

Thank you. Unless it was obliged to make the retention payment under the contract, there was no reason for Spotless to make that payment, was there?---No.

…

You were told by both Vita and Mr Dixon in that meeting on the 17^th that if you left you would be paid whatever entitlements you had under your contract?‑‑‑Yes.

I think one thing we are agreed about is, it was a very short meeting?---Indeed, your Honour.

You wanted to see a calculation of your entitlements under the contract, did you not?---Indeed.

In re-examination, the applicant was asked again about the conversation:

Mr Jopling put to you a couple of times neither Dixon nor Pepe said these words, ‘Regardless of your entitlements, Mr Stevens, under your contract, Spotless will pay you a retention bonus’ and you confirmed, ‘Correct, they did not use those words’, but can you tell his Honour, please, your best recollection of what actual words they — I mean either of them, either Dixon or Pepe used when talking about Spotless paying your retention bonus?---Yes, I understand. Your Honour, I said to both Mr Dixon and Ms Pepe, ‘You’ll both understand it needs to — I want to see my pay slip, I want to see the manual calculation and it needs to include two components, as agreed, the retention bonus and the 12 months in lieu of notice.’ Mr Dixon — Ms Pepe said, ‘Yes, that’s fine’, sort of the standard ‘That’s fine.’ I said, ‘Okay, can I get it’ and Vita said ‘Yes, we will arrange it today.’

The applicant described the meeting as ‘civil, not confrontational, amicable’.

Again, the evidence of Dixon was materially different to that of the applicant:

I said, ‘Anthony, is this correct, you want to resign after just two weeks in a job’, and Anthony said, ‘Yes, it is’, he thinks the job should be made redundant. I said ‘You’re kidding me, we have just’ — I said, ‘Anthony, you’re kidding me. We have just introduced [you] to all of our clients and in two weeks, you haven’t given it a go. It’s a ridiculous decision to say in two weeks you can’t make it work’, and Anthony said, ‘It’s too small, we should make it redundant.’

What did you then say to that?---I said, ‘It’s ridiculous’, and then I’d had enough. I just said, ‘That’s it, I’m not going to talk you into staying. You’ve exposed us now to all of our clients’, and I was furious, and I said, ‘That’s it, I’m not going to talk you into staying, we will just pay you what you’re owed.’

Did you have any subsequent conversations with Mr Stevens before he left the employ of Spotless?---No.

In cross-examination, Dixon agreed that he probably swore at the applicant during the meeting. He was asked to recount what he said as best he could:

I said, ‘Anthony, you have F-ing let us down. We have exposed ourselves to all of our clients, we have introduced you to all of our clients and in two weeks you say you’re going to resign.’ I said, ‘It’s just totally unprofessional and unacceptable from my side.’

That’s the sum total of it, is it?---It was a very short meeting, yes.

Dixon denied that the word ‘package’ was used in the meeting. He said that his language was a lot stronger than the word ‘disappointing’. He was asked further about what was said regarding the terms on which the applicant would leave Spotless:

And then either you or Pepe said, ‘Okay, you want to take a package’, do you remember that?---No.

And he responded, ‘Yes, but it’s very important to me that I receive my entitlements and I want to see the pay calculation reflecting our agreement’, do you remember that?---No.

And then you said, ‘Yes, Ant, you’ll get paid your entitlements’, correct?---No.

You did tell him he would get paid his entitlements?---No, I said, ‘You’d get paid whatever is under your contract, yes.’

So it’s just a matter of language that you are disagreeing with, is it?---Yes, that’s right.

You intended to convey to him that he would be paid his entitlements, correct?---He would be paid whatever he’s entitled to under his contract, yes.

And he then responded, ‘Okay, that’s fine’?---No, I don’t, but yes.

You don’t recall him saying, ‘Okay, that’s fine’?---No, I don’t.

How do you recall the meeting ending at that point?---I think we shook hands and that was it.

…

So you shook hands after what comment had been exchanged?---That he was going to leave and I just wished him luck.

Dixon agreed that he had been furious with the applicant at the meeting, and had sworn at him, being very angry and upset because he felt let down. He was also cross-examined about aspects of his outline of evidence which he accepted were wrong: the parties had not agreed an exit date for the applicant during the meeting; nor had Dixon asked the applicant if he wished to remain in the employment of Spotless.

Pepe also gave evidence about the meeting of 17 September 2012, as follows:

Ant asked whether he would be paid — Ant [wanted] to know what he would be paid and Bruce said that, ‘We will pay you whatever is in your contract, we will pay you what our obligations are’, and that was the end of that. It was a very brief meeting. In fact, I don’t even think that Ant sat down.

Pepe, like Dixon, denied that the applicant had said that he had formed the opinion that the airports position was not a senior executive position with substantial profit and loss responsibilities as had been represented to him at the meeting on 23 August. She was not asked for further details about the conversation.

Events after the meeting of 17 September 2012

The applicant emailed Pepe at 11:23 am on 17 September 2012 stating, among other things, that ‘[f]ollowing this morning’, his proposed last day was 19 October 2012. He said he would ‘appreciate if the paperwork (calc etc) was available for review later today’. Pepe responded to the applicant at 11:37 am, copying Douglas (by way of instruction), stating ‘Ant — John is organising the cals — will give them to you when I get them’. Douglas immediately sent an email to the General Manager — Payroll, Kim Dodd, asking whether it would ‘be possible to get Ant’s calcs’ by 2pm.

The Manual Salary Calculation document was prepared by Spotless’ Payroll Manager, Lisa Corcoran, at the direction of Dodd. Dodd emailed the document to Douglas and Pepe ‘as requested’ at 2:14 pm. Pepe gave the document to the applicant in the circumstances described below and then sent an email to Dixon at 2:30 pm attaching the document and saying:

Bruce — So you know — I gave Ant this and said John would follow up with agreements that need to be signed. Vita.

Douglas gave evidence that he understood this as a request to draft terms of settlement for the applicant to execute. This never happened because of the dispute which subsequently arose.

The applicant’s evidence in chief was that Pepe’s assistant had asked him to come to Pepe’s office around 2 pm and that she gave him the Manual Salary Calculation:

So Vita physically gave you this document, did she?---Yes. When I walked into her office, it was sitting on her conference table. She said, ‘Ant, I’ve got the calc prepared for you.’ She gave it to me, I took it. I turned it over, I had a look at it. I went through the key things that I wanted to ensure were in place, namely, top right-hand corner, the calculation for redundancy. I then went straight down the bottom of the page, looked at the total figure. I knew that two times $477,400 less appropriate tax would be somewhere in the vicinity of $550, $600,000 after tax. I then scanned my eye up diagonally to see the tax treatment that had been applied consistent with the calculation form being a redundancy and a lump sum D which I knew was the taxation classification that was appropriate. I then said, ‘Yep, that looks fine. Thanks, Vita’, and she said ‘Thanks, Ant.’ That was — it was a relatively brief meeting.

The applicant said that, around 5:00 pm, he asked Dodd to confirm that Douglas had given her the instruction to calculate the figure as he received it, and she did. This was because he knew that payroll only acted on instructions from Douglas.

The applicant was cross-examined about the Manual Salary Calculation he received:

So far as you were concerned, when you were looking at the figures, there, it was the contract and not the calculation document that determined your entitlements?---Your Honour, to me this was clear confirmation of the discussions that I had had prior, as we talked about yesterday, so in that sense, this was my paperwork that I sought to just make sure there were key points that were highlighted that reflected the agreement I had.

But it was your contract and not the calculation document that determined those entitlements, was it not?---The agreement that I had with Mr Dixon was what drove the calculation, as I understood, of this [sic] creation of this document.

The applicant was not cross-examined about his discussion with Pepe when she handed over the Manual Salary Calculation, nor did Pepe give evidence as to that discussion. She said that she did not look at the Manual Salary Calculation, nor had she read the applicant’s contract. She assumed the calculation would be correct. Dixon said that he had not seen the email from Pepe attaching the document until he came to give evidence, and he had not been expecting to receive the calculation from Pepe. He had never paid any attention to any of the documents given to the applicant in connection with the termination of his employment.

Corcoran gave evidence that Dodd instructed her to prepare the Manual Salary Calculation and to include both the 12 months’ FAR in lieu of notice and the 12 months’ FAR retention bonus. Dodd was of the view that when the 12 months’ FAR in lieu of notice was paid, the applicant would be taken past 1 September 2013 (being the end date for the retention plan), and was therefore entitled to the retention bonus. Corcoran disagreed with Dodd’s assessment but prepared the Manual Salary Calculation as instructed, on the basis that Dodd informed her that the calculation had been approved by Douglas.

Dodd gave evidence stating that Douglas had confirmed to her that the retention bonus was to be included in the applicant’s redundancy payment calculation. She did not recall discussing that matter with Corcoran. Douglas denied having given such confirmation to Dodd. He said that he had not reviewed the calculation before it was sent to Pepe. When he was copied in to the email from Dodd to Pepe, he opened the document on his screen and looked at it fleetingly and considered the total figure was about right, but did not notice the reference to a retention bonus.

The heading to the Manual Salary Calculation document stated that ‘[t]hese are estimates only until approved for payment’. Along with a sum of $477,400 (less tax) described as a ‘retention bonus’, the document also listed a sum described as a ‘redundancy payment’ for the same amount. Under the heading ‘Banking Details’ and next to the text ‘Date of bank transfer’, the words ‘Draft 2’ appeared. Further, a signature box marked ‘GGM’s Approval’ remained blank.

Events of October 2012

On 15 October 2012, prior to his final day of employment, an amount of $477,400 (less tax) was paid to the applicant, as a consequence of a processing error by the Spotless payroll department.

Pepe gave evidence that on 18 October 2012 the amount of the proposed termination payment to the applicant was brought to her attention, leading her to ask the National HR Manager, Matthew Potter, to check the calculations were correct. Potter told Pepe that he did not think the retention bonus was payable. Pepe asked Potter to contact Douglas, who was his boss, to ascertain his view. Potter then emailed Douglas suggesting that the retention bonus was not payable to the applicant. Douglas formed the same view and advised Potter accordingly.

On 22 October 2012, Douglas advised Pepe that the retention bonus had already been paid to the applicant. She decided that one figure could offset the other, so that the payment could be treated as the notice period amount. Pepe contacted the applicant and asked him to see if he had any other documentation that could demonstrate that the retention bonus was payable, because she knew that the letter advising that the retention bonus would be payable in cash was not on his file. She was ‘desperately hoping’ that he had something that could allow her to pay the bonus, but he did not. The applicant produced only the original letter regarding the retention bonus. He did not ask her why she had asked for documentation regarding the retention bonus.

The applicant said that the first indication he received that there was an issue regarding the calculations was on 23 October 2012. Pepe had said to him in the corridor outside her office that ‘we have got a problem with your pay, your bonus. We need to talk to you.’ She asked him to speak to Douglas, whose office was opposite hers.

Douglas then met with the applicant and told him that Spotless had a view that the retention bonus was not payable and had been paid by mistake, but that Spotless would not ask the applicant to repay it as there was to be a termination payment in the same amount, and one would be offset against the other. The applicant disputed that the retention bonus was not payable. The applicant recorded the conversation with Douglas, and a transcript of the conversation was tendered in evidence. After Douglas informed the applicant of the above matters, the following exchange occurred:

A: Yep, I’ve got a real problem with this.

J: OK, what’s the problem?

A: Firstly um, the … notice of, 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. Subsequently I had a discussion with Vita, about the concept of um performing a role as a sector GM which I said look in principle it sounds fine, I would do my own due diligence on that, which if you remember at the time everything was happening pretty quickly, so I did, I came back pretty swiftly, 4 days later. Said I don’t think it’s suitable. I said on that basis I would like to take a package, but I’d like to confirm first my payout which I was given in writing, in a spreadsheet, which confirmed there were two payments to be paid, I understand you confirmed that. Or Vita gave it to me, hand delivered.

J: I don’t recall that …

J: Yeah, I’m not, I’m not arguing …

A: So the spreadsheet

[Confused talking over the top of each other]

A: So I was given the spreadsheet, I then said, I then said I’m comfortable on that basis, I confirmed that position, Vita said no problem, in good faith, working collaboratively to hand over manage the situation with Qantas etc and um, agreed to a termination date which was you know, final departure date which was last Friday. Um, you know the circumstances in terms of last Friday to this Thursday has been just an extension at the request of Vita which I think was just an administrative thing, I understand the payment was made on Friday for the bonus, which is fine and my expectation is that the 12 month notice period would be paid at the end of this week.

J: OK

A: In terms of the retention agreement itself, I also know that other executives with the same sort of agreement in place were paid that at the outset.

…

J: My point is that the others were not paid, to the extent others were paid, and I have to be careful what I say here because obviously I got to maintain confidentiality but to the extent others were paid they were paid amounts not based on this letter.

A: Yes.

J: That’s the difference.

A: Well that’s why I requested very clearly. John, everything’s been file noted, everything’s been documented. I’ve received a physical copy, hand delivered from Vita which was on the basis — I looked at the figures. I obviously know. I could do the maths pretty quickly. I looked at the figures. I said yep, they’re two things that are part of my severance if you like. One is, I actually can’t believe this is you, we’re having this discussion … there were two figures presented there. One was the 12 months notice period and the other one was the retention bonus. Both were clearly spelt out in that letter. The total was 580 something or other thousand dollars after tax.

J: No I understand all that.

A: That’s the basis on which we formed this agreement —

Later in the conversation, there was a further exchange as follows:

A: Put yourself in my shoes, I’ve made a life decision to leave a company that I’ve been employed with and worked my arse off for 4 years, I’ve then been constructive and supportive throughout this period, you know, to the extent at which I could possibly be, assisting in the handover of major areas of my responsibility, of, with a hand shake, with an agreement, with yes that is fine Ant, this is our understanding, etc etc gone through that process. If you and or Vita, and or Bruce hadn’t understood the full extent of it, that’s why I said let’s make sure we formalise you know, what I get paid, I’m going to get because in order to formalise what I get paid, correct me if I’m wrong, but you know Payroll have got to confirm, review the file, tick tack back and forth with you? That process took place. Did it?

J: I’m not saying that process didn’t take place, all I’m saying is that in the course of that process, a mistake was made and we’re now rectifying that mistake.

A: OK. Well I can’t accept that.

J: I can understand what you’re saying. …

In cross-examination, the applicant accepted that he had not told Douglas that he had an oral agreement with Dixon about his entitlements. He said that his reference to the ‘process with Bruce’ he had gone through was a reference to that discussion. He said that he had been thinking that he needed to stop the discussion and get legal advice.

On 24 October 2012 Pepe met with the applicant to discuss the issue. Again, the applicant recorded the conversation with Pepe, and a transcript of the conversation was tendered in evidence. The following exchanges took place:[1]
[1]Typographical errors have been corrected

V: When we gave you the estimation, I didn’t look at your file. I relied on others (and I’m not passing the buck), to determine what you should have been paid. It was always the intention, and still is the intention, to pay you in accordance with your contract and our contractual obligations — we haven’t moved from that. It was when the review took place that we believed it wasn’t part of the contractual obligation. So there is no question about diddling you or doing any of that. None whatsoever. I can only explain to you the position. And that’s why we reviewed it again, I thought you may have had a different correspondence from Joe Farnik about the retention bonus that we didn’t have but what you gave was what we had. I hoped you had something else. We can only go on what we’ve got and the interpretation of that and I wanted to talk to you about that. I had hoped to have done it and not John done it but anyway —

A: It wasn’t a good meeting.

V: I can understand your position and being in your shoes I’d be concerned about it too. I understand all of that.

A: So, now what?

V: I wanted to talk to you about it. Our position is how we interpret the contract. And it was very clear that’s what it said.

A: So, you want to talk about it at this stage? I qualified from John yesterday whether this was Spotless’ considered and final position.

V: Unless there is anything that changes that, and I can’t see that there is anything that changes that, except what is in the file, that is our position. …

A: … [T]his is not about numerical calculation errors and the fact is that the amount has already been paid. I gather you are aware of that — the retention bonus has already been paid which I was surprised about, as my wife said I thought you were getting this amount when you finished.

V: It was a mistake.

A: Nevertheless, I have received the amount. It is a tricky situation because of the materiality, because of the discussion that we had, and the spreadsheet that you gave me, hand delivered, and on the basis that I came back and confirmed, okay, on the basis of this spreadsheet I’m then happy with the agreement that we’ve got in place which is I’ll then leave in a while.

V: It was an estimation.

…

A: I’m shocked to say the least and really disappointing [sic] in terms of the process. That’s why I went through the process I went through to be honest. We haven’t worked together for long however I think I’ve been pretty transparent with what I’ve done.

V: Yes you have.

A: I actually went through the process with you, with Bruce, having received the documentation etc to avoid this sort of misunderstanding or interpretation problem etc. There were lots of grounds on which I made the decision but ultimately —

V: The decision can be unwound if you choose it to be.

A: I think that’s where I need to revert. As I said, I’m really disappointed that we are having this discussion.

Later on the same day, the applicant sent an email to Pepe advising that he would ‘as required’ be finishing the following day. Pepe replied by email, again apologising ‘that the estimates I gave you for your redundancy payment when reviewed were not correct in relation to the retention bonus’. She added that they ‘were an estimate only and did not constitute an offer’. She said that if the applicant wanted to stay with Spotless she was very happy for that to happen, but it was up to him if he chose to leave. The applicant did not respond to that email. Further emails between them did not advance the position.

The applicant’s employment with Spotless finished on 25 October 2012. Spotless treated the amount the applicant had received as his full entitlement, and denied that he was entitled to a further amount of $477,400 by way of retention bonus. That is the sum now in dispute.

The trial judgment

The trial judge rejected the applicant’s claims. In relation to the applicant’s discussion with Dixon on 23 August 2012, the judge preferred the evidence of Dixon.[2] For several reasons, he found that there was no discussion between Dixon and the applicant on that day about the applicant’s possible redundancy, and no agreement reached between them as to the payment of a retention bonus of 12 months’ FAR in the event of the applicant’s redundancy. In particular:[3]
[2]Stevens v Spotless Management Services Pty Ltd [2015] VSC 746 [109] (‘Reasons’).
[3]Ibid [109]–[128].

(a) Dixon’s evidence was inherently more likely because of ‘his unchallenged state of knowledge at the time of the meeting’,[4] namely that he was unaware of the contents of the applicant’s employment contract and whether he was participating in the retention plan;
[4]Ibid [109].

(b) it was improbable in those circumstances that Dixon discussed the applicant’s redundancy or arrangements relating to his employment contract or retention plan entitlements;

(c) in his subsequent meetings with Spotless executives, the applicant ‘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’;[5]
[5]Ibid [110].

(d) the applicant’s evidence of the conversation ‘was not squarely put in detail to Dixon in cross-examination’, nor was the substance of critical parts of the evidence foreshadowed in the applicant’s outline of evidence;[6]
[6]Ibid [118].

(e) the applicant did not record or confirm his version of the conversation, even though he subsequently sent Dixon the memorandum he used as an agenda;

(f) the applicant’s own evidence of the concluding parts of the discussion reflected that no agreement had been reached; and

(g) there was no ‘concrete contemporaneous evidence’ in support of the applicant’s evidence.[7]

[7]Ibid [123].

As a result of these findings, the judge did not need to deal with arguments made by the respondent that any agreement would not have been binding, either for want of consideration or because the employment contract stipulated that it could only be varied by written agreement.

As to the events of 17 September 2012, the trial judge did not accept the applicant’s contention that an agreement was formed between the parties as to the payment of a retention bonus on the basis of his redundancy. The judge considered that, despite the applicant’s closing submissions describing the meeting on 17 September 2012 as the critical meeting, as the applicant’s case was put, the agreement and understandings relied upon on 17 September 2012 in large measure relied upon the earlier alleged agreement on 23 August 2012. The judge’s reasons for finding against the applicant in relation to the events of 17 September 2012 were:[8]
[8]Ibid [130]–[155].

(a) the alleged agreement of 17 September 2012 was ‘predicated on’ or ‘necessarily underpinned by’[9] the alleged agreement of 23 August 2012, which the judge had found did not impose any obligations on the respondent;

[9]Ibid [137]

(b) the entitlement alleged based on the events of 17 September 2012 was also predicated upon the applicant being made redundant, although the applicant submitted that it was reached without regard to whether or not he had in fact been made redundant — and the judge had concluded that the applicant had not been made redundant and that his position as CIO continued;

(c) the applicant’s asserted understanding on 17 September 2012 was ‘flawed and unreasonable’ because the view he held as to his entitlements was based on his alleged discussions with Dixon on 23 August 2012 which the judge had found did not support the agreement alleged on that date;[10]
[10]Ibid [135].

(d) the applicant accepted that neither Dixon nor Pepe had stated to him that Spotless had decided to pay him a retention bonus, whether or not he had that entitlement under his contract;

(e) the applicant 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;

(f) important aspects of the applicant’s evidence as to the 17 September 2012 meeting were not put to Dixon or Pepe, and the applicant’s outline of evidence did not in any substantial way foreshadow those aspects;

(g) as a result of the judge’s findings in relation to the meeting on 23 August 2012, in instance of direct conflict between the applicant and Dixon, Pepe or Douglas, the evidence of those witnesses should be given more weight than that of the applicant;

(h) the instances where Dixon gave inconsistent or conflicting evidence were inconsequential;

(i) Dixon and Pepe gave evidence, and the applicant agreed, that the applicant was told by Dixon and Pepe that if he left Spotless he would be paid whatever entitlements he had under his contract;

(j) it was ‘inherently likely and consonant with commercial reality’ that Dixon and Pepe were intent upon holding the applicant to his contractual rights and agreeing nothing more, especially given the applicant’s lack of interest in the airports role they had wished him to undertake;[11]
[11]Ibid [146].

(k) there was no documentary note of the meeting on 17 September 2012 referring to the applicant ensuring that he had a retention bonus before agreeing to leave Spotless;

(l) when Pepe asked the applicant for any documentation in relation to his retention bonus, he did not suggest that he had such an entitlement from any oral agreement or arrangement with Pepe or Dixon;

(m) the applicant did not confront Dixon about the alleged agreement or record such a conversation;

(n) the applicant did not suggest to Pepe on 24 October 2012 that his entitlement to a retention bonus arose from an oral agreement with her, or with Dixon on 23 August 2012, nor did he explain what he later alleged occurred on 17 September 2012, and the applicant’s case in this regard was not put to Pepe in cross‑examination; and

(o) the Manual Salary Calculation was not a contractually binding document, but a non-binding estimate of the applicant’s contractual entitlements, which was described as an estimate and a draft and was not signed as having been approved.

The judge again did not need to decide whether any agreement of 17 September 2012 was ineffective by reason of not having been in writing. Nor was it necessary to decide whether such an agreement lacked consideration.[12]
[12]Ibid [151].

As mentioned, the applicant was paid $477,400 (less tax) on 15 October 2012. That payment was described as an ‘annual bonus’ on a ‘pay advice’ produced by the respondent. The respondent contended that those payments were made on the basis of mistakes of fact and law, and on the basis of a total failure of consideration, or no consideration at all. The trial judge upheld these claims.[13] The mistake of fact was that Dodd did not have authority to pay the applicant the retention bonus and the payment was not approved. The mistake of law was Dodd’s erroneous view as to the applicant’s entitlement to a retention bonus. The judge held that an order for restitution, or set-off, would not be unjust because the applicant had already decided to leave Spotless before receiving the Manual Salary Calculation or being paid his retention bonus on 15 October 2012.
[13]Ibid [161], [163]–[164].

Finally, the judge held that the applicant had not been made redundant. He held that references that were made to ‘redundancy’, including in the Manual Salary Calculation, were to assist the applicant for taxation purposes.[14]
[14]Ibid [176].

Proposed grounds of appeal

The applicant seeks leave to appeal on four grounds:

1.His Honour erred in finding that there was not a discussion or agreement on 23 August 2012 between [the applicant] and Mr Dixon to the effect that, in the event of [the applicant’s] redundancy, [the respondent] would pay [the applicant] a retention bonus equal to 12 months fixed annual remuneration.
2.His Honour erred in finding that [the respondent] did not agree on 17 September 2012 to pay [the applicant] a retention bonus in the sum of $477,400 upon the termination of his employment.
3.His Honour erred in finding that the payment made to [the applicant] of the retention bonus was a payment for a failed or no consideration.
4.His Honour erred in finding that [the respondent] paid the retention bonus to [the applicant] under a mistake of fact and under a mistake of law.

It can be seen that the first two proposed grounds of appeal are challenges to findings of fact made by the judge in relation to the two principal meetings. To a significant extent the resolution of those grounds will bear upon the resolution of the third and fourth grounds. It is therefore convenient first to turn to the principles governing appeals against a trial judge’s findings of fact.

Appeals against findings of fact

The High Court has recently restated the law governing appeals such as those advanced in proposed grounds 1 and 2. In Robinson Helicopter Co Inc v McDermott the Court stated:[15]

A court of appeal conducting an appeal by way of rehearing is bound to conduct a ‘real review’[16] of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings.[17] But a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by ‘incontrovertible facts or uncontested testimony’,[18] or they are ‘glaringly improbable’ or ‘contrary to compelling inferences’.[19]

[15](2016) 90 ALJR 679, 686–7 [43] (French CJ, Bell, Keane, Nettle and Gordon JJ) (‘Robinson Helicopter’).

[16]Fox v Percy (2003) 214 CLR 118, 126 [25] (Gleeson CJ, Gummow and Kirby JJ).

[17]Devries v Australian National Railways Commission (1993) 177 CLR 472, 479–81 (Deane and Dawson JJ); Fox v Percy (2003) 214 CLR 118, 128 [29] (Gleeson CJ, Gummow and Kirby JJ); Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357, 381 [76] (Heydon, Crennan and Bell JJ).

[18]Fox v Percy (2003) 214 CLR 118, 128 [28] (Gleeson CJ, Gummow and Kirby JJ).

[19]Ibid 128 [29]. See also Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357, 381 [76] (Heydon, Crennan and Bell JJ).

In conducting the ‘real review’ required of it, this Court must bear in mind that it has not seen or heard the witnesses and must respect the advantages that this gave the trial judge. However, the Court cannot rely on this consideration as a basis for avoiding conducting the necessary review. As the majority explained in Fox v Percy:[20]

Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge’s reasons. Appellate courts are not excused from the task of ‘weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect’. In Warren v Coombes,[21] the majority of this Court reiterated the rule that:
[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.

[20](2003) 214 CLR 118, 126–7 [25] (Gleeson CJ, Gummow and Kirby JJ) (citations omitted).

[21](1979) 142 CLR 531, 551 (Gibbs ACJ, Jacobs and Murphy JJ).

The majority continued:[22]

the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
… In some, quite rare, cases, although the facts fall short of being ‘incontrovertible’, an appellate conclusion may be reached that the decision at trial is ‘glaringly improbable’ or ‘contrary to compelling inferences’ in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must ‘not shrink from giving effect to’ its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.

[22]Fox v Percy (2003) 214 CLR 118, 128 [28]–[29] (Gleeson CJ, Gummow and Kirby JJ) (citations omitted).

Moreover, the trial judge’s advantage in assessing witnesses may be impaired by various matters. One such matter is any delay between the trial and the delivery of judgment. As the New South Wales Court of Appeal said in Monie v Commonwealth, ‘the trial judge’s advantage [in assessing witnesses] does weaken with time’.[23] In the present case, the lapse of approximately one year between the date of trial and the delivery of judgment is raised obliquely in the applicant’s submissions.[24]
[23](2005) 63 NSWLR 729, 742 [43(5)] (Hunt AJA; Giles and Bryson JJA agreeing). See also Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd [2016] VSCA 187 [148] (Warren CJ, Ashley and Osborn JJA).
[24]See [94] below.

While delay in delivering judgment may provide a basis for an appellate court to accord less weight than it usually would to the trial judge’s assessment of witnesses’ credibility, delay is not itself an appealable error. Rather, as Gleeson CJ explained in NAIS v Minister for Immigration and Multicultural and Indigenous Affairs, ‘the ground of appellate intervention is the error, or the infirmity of the decision, not the delay itself’.[25]
[25](2005) 228 CLR 470, 474 [5].

As explained below,[26] in the present case there is no reason to think that less weight than usual should be accorded to the trial judge’s assessment of the witnesses.
[26]See [174] below.

Ground 1 — the 23 August meeting

Counsel for the applicant argued that the judge ought to have found that the parties entered into a contract on 17 September 2012, under which the applicant would depart the employment of the respondent in return for payment of his entitlements — comprised of 12 months’ FAR in respect of the retention bonus and a further 12 months’ FAR in lieu of notice — in an amount to be indicated to him subsequently. The contract was formed when the Manual Salary Calculation was provided to the applicant and he raised no objection to its contents. That agreement was struck in place of the agreements governing the applicant’s pre-existing entitlements and therefore avoided any scope for dispute as to what those entitlements were. The events of 23 August 2012 were relevant background, but it was not essential to the applicant’s case that anything was agreed on that day. The applicant did not challenge the trial judge’s finding to the extent that he held that no binding agreement was reached on 23 August 2012.

The applicant submitted that, in finding that there was no ‘discussion or agreement’ on 23 August 2012 between the applicant and Dixon that, in the event of his redundancy, the respondent would pay the applicant a retention bonus equivalent to 12 months’ FAR, the trial judge was in error for several reasons, each of which related to his assessment of the evidence.

The applicant submitted that this Court is in the same position as the trial judge in relation to the assessment of the evidence, as the trial judge’s conclusions made no reference to witnesses’ demeanour, there had been over a year between the hearing and the delivery of judgment (lessening the benefit the trial judge had of observing the witnesses), and the errors identified in the decision suggested that the lapse of time ‘may have affected the quality of the judgment’.

The respondent submitted that the evidence showed that the applicant was critical to Dixon’s plans for Spotless and that Project Springboard was his principal concern from the moment he commenced as CEO. There was no reason why Spotless would have made the applicant redundant and none was suggested. Nor would it have made sense for Dixon to have agreed that the applicant should leave Spotless with anything other than his contractual entitlements. The judge’s findings were consistent with the evidence.

The respondent contended that the trial judge had the advantage of the subtle influence of the demeanour of the witnesses, and the Court should not assume that this played no part in the judge’s reasoning.[27]
[27]Jones v Hyde (1989) 85 ALR 23, 27 (McHugh J).

It is convenient first to consider the parties’ arguments by reference to the seven reasons relied on by the judge for his conclusions regarding the 23 August 2012 meeting, as set out at [78] above. It will then be necessary to consider the judge’s ultimate findings relating to the meeting.

The first issue is whether Dixon’s evidence that he knew nothing of the applicant’s employment arrangements or retention bonus was ‘unchallenged’. The applicant relied on the evidence of Rita Agati, Group General Manager — Human Resources, that she had told Dixon of the applicant’s terms of employment and his retention plan shortly before the takeover took effect. After Dixon had indicated to her that he would not be ‘progressing’ with Field, Agati in her evidence in chief described the following conversation:

At that point I said, ‘Well, you know that there’s three of the group executives who are on retention and it’s time based. So basically, unless they get dismissed or they resign, you need to pay them out of their retention arrangements’, and he asked who else was on the list and I said Michael Givoni and Anthony Stevens … So he wanted me to tell him what were the details of the retention and I said, ‘Well, Wendy Field has got 60 per cent and Michael Givoni I believe has got 60 per cent and Ant has got 100 per cent of his salary’ and I said, ‘There was a resolution that was passed by the human resources committee that it was — if they stayed and Spotless was still a PLC[28] that they would have been given their remuneration in shares, the value of the shares but given that there would be no longer the shares, the human resources committee passed a motion that that would be converted into cash, and that they had letters that basically stated that.

[28]Agati confirmed that by ‘PLC’ she meant a company that was publicly listed on the ASX.

Agati was not cross-examined about the above evidence. The applicant further pointed to the fact that Dixon had accepted in cross-examination that Agati may have mentioned the retention plans in this conversation. He did not recall, because his attention was focussed on Field. He was told about the existence of some retention agreements shortly prior to the takeover.

Counsel for the respondent submitted that the evidence of Agati did not contradict that of Dixon regarding his knowledge of the applicant’s contractual arrangements. The respondent pointed to evidence Dixon gave about the meeting with Agati, to the effect that the purpose of the meeting was to discuss Field, that he had no interest in the terms of her retention bonus and he had not looked at the applicant’s contract because that was Agati’s role. The cost of paying out a retention bonus was insignificant to him and he did not know how many bonuses had been paid.

Accepting the evidence of Dixon on which the respondent relies does not alter the position that the evidence of Dixon that he did not know of the applicant’s employment arrangements, including his participation in the retention plan, was not ‘unchallenged’ as the judge held. To the contrary, the evidence of Agati to the opposite effect was itself not challenged. Moreover, Dixon was asked in cross-examination why he did not recall being told by Agati about the applicant’s retention bonus:

Why is it, Mr Dixon, that in relation to some meetings in August 2012, for example, those with Anthony Stevens, you say you have a very clear recollection of what you said and what he said on each occasion, that’s true, isn’t it?---Correct.

But in relation to a meeting only a couple of days earlier with Rita Agati, you don’t have a very clear recollection; can you explain to his Honour why that is?---Yes, because the meeting with Rita was all about Wendy Field, getting a termination for Wendy Field on the first day. That was my only intention for that meeting. As I said, Rita may have mentioned other things but the only reason for that meeting was to deal with Wendy Field on her first day.

That’s a reason why one would expect you to remember what happened at that meeting more clearly, wouldn’t it, than in a more complicated meeting where you are discussing quite a number of things; do you agree?---No, because it’s just whatever is important to me at that time that I recall. So in a sense of Rita with Wendy and as I said yesterday, the SAP was the number one problem in the company and I needed to fix it so that’s why it’s an easy recollection.

That’s your explanation for having a very clear recollection of everything said between you and Stevens in the week commencing 17 August, but not a clear recollection of what Agati said to you in your meeting in the café in South Yarra, is that right?---No, I do have a very clear recollection of what Agati said to me in relation to Field because that was my agenda item for that meeting.

Given the above evidence, Dixon’s evidence that he knew nothing of the applicant’s employment contract or retention bonus as at 23 August 2012 was challenged. The judge’s conclusion to the contrary cannot be sustained.

It follows that the judge’s finding that the applicant did not tell Dixon that he believed he would be entitled to a retention bonus of 12 months’ FAR in addition to a further 12 months’ FAR in lieu of notice cannot stand. To that extent, the first proposed ground of appeal should be upheld. However, in so far as that ground challenges the judge’s finding that no agreement was made on 23 August 2012, it should be rejected.

Ground 2 — the events of 17 September

It will be recalled that the judge rejected the applicant’s evidence regarding his meeting with Dixon and Pepe on 17 September 2012 on a number of grounds.[41] The applicant takes issue with each of them.
[41]See [80] above; Reasons [133(a)].

The applicant submits that, in rejecting his argument as to the effect of the events of 17 September, the trial judge misapprehended the applicant’s case. The judge stated that the alleged agreement of 17 September was ‘predicated on’[42] the alleged agreement of 23 August (having already concluded that no such agreement was formed). But the applicant contended that the 17 September agreement was a standalone agreement, consistent with what was said at the meeting with Dixon on 23 August but not predicated on any agreement having been reached at that stage.
[42]Reasons [134].

The applicant contended that the judge was also wrong to treat the events of 17 September 2012 as being predicated on the applicant, or his position as CIO, having been made redundant. That was so for three reasons:

(a)payment of the retention bonus was not conditional on any redundancy;
(b)Spotless agreed to pay the applicant both the retention bonus and the payment in lieu of notice on a redundancy basis and consistently represented to him that he was being paid on a redundancy basis, including in the Manual Salary Calculation and after the dispute over the retention bonus had arisen; and
(c)Spotless accepted that it was liable to pay the ‘redundancy’ payment, but pleaded mistake in order to set off the retention bonus payment against that payment.

The fact that the applicant accepted that neither Dixon nor Pepe stated that Spotless would pay him a retention bonus whether or not he had a contractual entitlement to payment, and the fact that there was no reason for Spotless to make such a payment if it wasn’t contractually obliged to do so, were said to be irrelevant. The applicant was entitled to rely on the agreement as recorded in the Manual Salary Calculation.

The judge stated that important aspects of the applicant’s evidence were not put to Dixon and Pepe.[43] The applicant submitted that the relevant evidence was put to Dixon and that Pepe’s evidence did not contradict that of the applicant. Pepe confirmed that the applicant had wanted to know what he would be paid and the applicant followed up seeking the paperwork later in the morning. Moreover, Pepe’s evidence contradicted that of Dixon, as to the nature and tone of the whole discussion. Pepe also contradicted Dixon’s evidence about their discussion before the meeting. These were reasons for rejecting Dixon’s evidence.
[43]Ibid [138(c)].

The judge’s reasoning in relation to the Manual Salary Calculation was also said to be flawed. The fact that the applicant was told that he would be paid his contractual entitlements raised the question of what those entitlements were. It was in that context that the applicant asked to know what he would be paid, and the Manual Salary Calculation was provided by way of response. The Manual Salary Calculation formalised the agreement. The fact that it referred to ‘estimates’ and was unsigned was only relevant to the fact that the calculation of the items listed was provisional, rather than indicating whether an item was or was not payable at all. The applicant knew the calculation was approved by the Spotless human resources team, and, as mentioned above, checked with Dodd that it had been; that could not explain why it lacked contractual effect. In sum, the evidence favoured a finding that an agreement to the effect alleged by the applicant was formed on 17 September.

The respondent submitted that the statement of claim and the applicant’s evidence demonstrated that his case as to the 17 September agreement was, as the judge held, ‘predicated on’ the 23 August agreement. It was emphasised that all that Dixon and Pepe said to the applicant on 17 September 2012 was that he would be paid his entitlements. There was no suggestion of Spotless acceding to new or additional entitlements. Clear language would be required to bring about that result.[44] There would be no commercial reason for doing so. No contemporaneous document suggested that was contemplated. The Manual Salary Calculation was not intended to have operative effect but represented, as it expressly stated, an estimate of the applicant’s entitlements. In subsequent conversations with Dixon and Pepe, the applicant did not assert that any departure from his contractual entitlements had been agreed upon.
[44]See Iacullo v Hillam [2014] NSWSC 1021 [39] (Ball J).

The respondent contended that the criticism of the judge’s reasoning to the effect that the 17 September agreement was predicated upon the 23 August agreement was without substance. The only basis for departing from the applicant’s contractual entitlements was said to have derived from the discussions between Dixon and the applicant on 23 August 2012. This was apparent from the pleadings and also from the applicant having indicated to Dixon and Pepe that he was relying on those discussions. Similarly, on the applicant’s case payment of the retention bonus had been advanced in the discussion on 23 August 2012 as following on from the applicant being made redundant. The 17 September conversation was therefore predicated on that redundancy coming to pass.

As to the applicant’s contention that important matters about the 17 September meeting were put to Dixon, the respondent submitted that the details of what the applicant submitted was said were not put to Dixon or Pepe in cross-examination. The judge was entitled to prefer the evidence of Dixon and Pepe. The difference in their accounts as to the tone of the meeting was inconsequential.

In relation to the Manual Salary Calculation, the respondent contended that the document did not have contractual effect. It was expressed as reflecting, not creating, entitlements. It was a ‘draft’, contained ‘estimates only’, was unsigned and was conditional on approval. Despite knowing that Douglas’s approval was necessary, the applicant never spoke to him about the document, preferring instead to rely on information from Dodd. The context in which the document was provided, including the various discussions on 23 August, 14 September and 17 September and the terms of the contract of employment and the retention plan, further demonstrated that the document was not intended to have contractual effect. In particular, the statement that the applicant would be paid his entitlements merely meant that he would be paid whatever he was owed under his contract of employment, not what was contained in the Manual Salary Calculation.

The starting point in analysing the arguments under this ground must be to observe that the landscape is changed once the first ground is disposed of as explained earlier in these reasons. Acceptance of the applicant’s evidence as to what he and Dixon discussed on 23 August 2012 provides the background to the events that followed. In particular, the applicant had proposed to Dixon that, if his position were to be made redundant and there was no suitable alternative position, he would be paid both his 12 months’ FAR in lieu of notice and his retention bonus. Although Dixon had not, as explained above, formally agreed to that arrangement, enough had been said at the meeting to afford a basis for subsequent events.

This conclusion means that the reasoning of the judge regarding the events of 17 September 2012 cannot stand. The judge stated that he was wholly unpersuaded that a binding agreement was reached on 17 September 2012, ‘principally because’ that claim was ‘necessarily underpinned by the unsubstantiated agreement he alleges on 23 August 2012’.[45] This Court’s finding that the matters alleged to have been agreed on 23 August 2012 were in fact discussed on that day is inconsistent with the judge’s reasoning in respect of the 17 September 2012 meeting. It also undermines the judge’s conclusion that, because the applicant’s evidence as to the 23 August 2012 meeting had not been accepted, the evidence of Dixon, Pepe and Douglas in relation to later events should be preferred to that of the applicant.[46] At the same time, the judge’s other reasons for rejecting the applicant’s claim plainly bear upon the Court’s task of reviewing the evidence and the judge’s finding in favour of the respondent.
[45]Reasons [137]; see also at [130], [133(a)], [134], [135].
[46]See ibid [138(d)].

In particular, it cannot be gainsaid, as the respondent submitted and the applicant accepted in his evidence, that there was no explicit agreement, and no conversation, to the effect that Spotless would pay the applicant anything other than his contractual entitlements. As the respondent submitted, there would be no commercial reason for doing so. These matters, upon which the judge relied, tell against the applicant’s claim that the employment contract was, in effect, overtaken by the alleged agreement of 17 September 2012.

On the other hand, as emerged at the hearing of the present application and appeal, payment of the 12 months’ FAR in lieu of notice was, on any view, itself a departure from the applicant’s entitlements under his contract of employment. An entitlement to such a payment arose under cl 19.1[47] in only two circumstances. The first was if Spotless terminated the employment agreement. The evidence was clear that the applicant chose to leave Spotless, rather than Spotless terminating him. The second circumstance was where the executive gave written notice, effective immediately, within 6 months of a material diminution of his or her duties and responsibilities. No notice of that kind was given. Nor does there appear to have been any discussion, by reference to the employment contract, about dispensing with that requirement. More importantly, Spotless did not accept that the offer of the airports role involved a material diminution of the applicant’s duties and responsibilities. To the contrary, Dixon saw the position as offering the applicant additional responsibilities that would equip him for a future career as a CEO.
[47]See [4] above.

It is apparent, therefore, that there was at no stage strict compliance with the applicant’s contractual entitlements. (It should be added that the judge held, and the applicant has not disputed, that the applicant was not contractually entitled to a bonus under the retention plan.[48]) This casts the evidence as to what was said and done on 17 September 2012 in a different light.
[48]See Reasons [96]–[99].

In particular, it is clear that, while the parties proceeded on the basis that the amount the applicant would be paid was to be worked out by reference to his contract and the retention plan, strict compliance with contractual requirements was not being insisted upon. This renders less significant the suggested commercial unlikelihood of Spotless agreeing to pay the applicant anything beyond his contractual entitlements. It also means that the fact that Dixon and Pepe spoke only of paying the applicant his entitlements, without indicating what they might be, is only part of the story. The larger question was how those entitlements were to be calculated.

In that regard, no express consensus was reached at the meeting on 17 September 2012 as to what amount was to be paid or how it was to be calculated.

Two competing conclusions of fact were advanced by the parties. The applicant contended that he asked Dixon and Pepe for the actual figure to be provided by way of finalisation of the arrangements between them, and that this was done when Pepe gave him the Manual Salary Calculation. The importance of this document was confirmed by the fact that it was provided also to Dixon. The respondent contended that the figure that was provided was, as the document itself made plain,[49] nothing more than an estimate of the amount he would be paid.
[49]See [67] above.

While the document contains several clear indications that it was provisional in character, it cannot be treated in isolation from the surrounding events. The applicant submits that, even if the figures themselves were estimates, which might vary depending, for example, on his actual date of departure, the document was unequivocal in stating that he was being made redundant and that he would be paid 12 months’ FAR by way of a redundancy payment and a further payment of the same amount by way of retention bonus. He received and accepted the document from Pepe in response to a request for confirmation of his entitlements, as discussed, and it is to be inferred that the parties thereupon reached agreement upon the terms of his departure.

It is therefore necessary to review the surrounding evidence. In that context, apart from matters flowing from his findings as to the 23 August 2012 meeting, and bearing in mind that the parties were on any view departing from the applicant’s strict entitlements without expressly saying so, the judge relied on several particular matters which must now be addressed. Drawn from the summary at [80] above, and retaining the numbering of that paragraph, they are as follows:[50]
[50]Reasons [130]–[155].

(f) important aspects of the applicant’s evidence as to the 17 September 2012 meeting were not put to Dixon or Pepe, and the applicant’s outline of evidence did not in any substantial way foreshadow those aspects;

(h) the instances where Dixon gave inconsistent or conflicting evidence were inconsequential;

(k) there was no documentary note of the meeting on 17 September 2012 referring to the applicant ensuring that he had a retention bonus before agreeing to leave Spotless;

(l) when Pepe asked the applicant for any documentation in relation to his retention bonus, he did not suggest that he had such an entitlement from any oral agreement or arrangement with Pepe or Dixon;

(m) the applicant did not confront Dixon about the alleged agreement or record such a conversation; and

(n) the applicant did not suggest to Pepe on 24 October 2012 that his entitlement to a retention bonus arose from an oral agreement with her, or with Dixon on 23 August 2012, nor did he explain what he later alleged occurred on 17 September 2012, and the applicant’s case in this regard was not put to Pepe in cross‑examination.

These matters all go to the question that remains at the crux of this ground, namely whether the evidence of the applicant about what was said at the meeting on 17 September 2012 should have been accepted.

As noted, the judge held that the critical aspects of the applicant’s evidence were not put to Dixon or Pepe, nor were they foreshadowed in his outline of evidence in any substantial way. The passages in which the applicant said that he told Dixon and Pepe that he wanted to see the calculation with both 12 month components, and that they agreed to do that, are set out at [46], [47] and [50] above. The judge did not accept this evidence.

The judge relied in particular on sections from the passages set out at [46] and [47] above. It is convenient to set those sections out again. In the first, the applicant said in examination in chief:

I can’t remember exactly who said it but Bruce or Vita said, ‘Okay, so you want to take a package’, and I said, ‘Yes, but 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’, referring to — looking at Bruce, and he said, ‘Yep, Ant, you’ll get paid your entitlements’, and I said, ‘Okay, that’s fine.’ He said, ‘Okay’ and that, as best as I recall, concluded the meeting.

The second passage was in cross-examination:

I said very clearly to Mr Dixon and Ms Pepe, I wanted to see the calculation and my expectation, consistent with the agreement that I had with Mr Dixon, was that it include both the severance, 12 months in lieu of notice and the retention bonus and that triggered the events that followed.

The outline of evidence contained the following outline concerning the 17 September 2012 meeting:

The [applicant] will give evidence that he next met with Ms Pepe and Mr Dixon on 17 September 2013 [sic] to confirm the terms upon which his employment with the Defendant would be terminated. The [applicant] will say that in the course of this meeting, it was confirmed to the [applicant] that in addition to his entitlements on termination by reason of redundancy, the [applicant] would be paid his retention bonus in cash equivalent to one year’s FAR. The [applicant] will give evidence that Ms Pepe told him that she would arrange to provide him with a formal termination statement document as the [applicant] had requested confirming the payments that he would receive upon termination and tax calculations on those payments.

The judge did not specify what parts of the evidence at [156] and [157] above had not been adequately foreshadowed. In our opinion, the outline clearly foreshadowed the substance of a conversation in which the applicant was given confirmation that he would receive the retention bonus, and that the details would be provided in a confirming statement. It cannot be said that the applicant’s evidence introduced matters of substance for the first time, such as might found an adverse inference as to the applicant’s credit. Nor did the judge approach the matter in that way. In the circumstances, it is not clear what consequence the suggested omission from the outline was said to have had. But in any event, the better view is that there was no omission of any substance.

It might be added that the applicant’s evidence was largely consistent with further and better particulars that had been provided before trial in the following terms:

the said meeting took place in the office of Mr Dixon at about 9.45 am. The plaintiff told Mr Dixon that he had spoken with Ms Pepe the previous Friday, 14 September 2012 and that he was clear that the position of General Manager — Airports was not suitable. He said that he had looked at the results for the August month and that he did not believe the role was suitable given the size of the business and profitability. Mr Dixon and Ms Pepe agreed with the plaintiff that it was a learning process in relation to the new structure, and Mr Dixon said that the notion of industry sectors and the Airports sector was one that he felt needed to exist. The plaintiff said that he would agree a date for his departure but that he wanted to confirm that his entitlements including the retention bonus would be paid out. Mr Dixon and Ms Pepe said he would be paid what he was entitled to. The plaintiff said this was clearly an important aspect and said to Ms Pepe that the calculations should be confirmed as soon as possible. Ms Pepe agreed and said she would talk with Mr John Douglas, the General Manager Human Resources. Ms Pepe said she wanted Mr John Kuner to take over as General Manager — Airports.

The further and better particulars reflected the applicant’s evidence in chief (at [156] and [157] above) but both the particulars and the applicant’s evidence just referred to differed from his evidence in re-examination (set out at [50]), in so far as they indicated that Dixon and Pepe had merely said that the applicant would be paid what he was entitled to. In re-examination, the applicant said that after he had raised that matter, he asked that the Manual Salary Calculation ‘include two components, as agreed, the retention bonus and the 12 months in lieu of notice’, to which he said ‘Mr Dixon — Ms Pepe said, “Yes, that’s fine”, sort of the standard “That’s fine”’. The judge did not rely on this matter not having been put to Dixon or Pepe, but it is necessary to take it into account in the present context.

The next issue is whether the relevant evidence was not put to Dixon and Pepe. The applicant submitted that it was put to Dixon and that the evidence of Pepe was not inconsistent with it. Before turning to the relevant evidence, it may be observed that, given its consistency with both the outline of evidence and the further and better particulars, the inferences adverse to the applicant that could be drawn from the evidence not being put may, in any event, be limited at best. Certainly, again, it cannot be regarded as an indication of recent invention (nor did the judge treat it as such).

Dixon was cross-examined about the meeting of 17 September 2012 in the terms set out at [54] above. The relevant passage is as follows:

And then either you or Pepe said, ‘Okay, you want to take a package’, do you remember that?---No.

And he responded, ‘Yes, but it’s very important to me that I receive my entitlements and I want to see the pay calculation reflecting our agreement’, do you remember that?---No.

And then you said, ‘Yes, Ant, you’ll get paid your entitlements’, correct?---No.

You did tell him he would get paid his entitlements?---No, I said, ‘You’d get paid whatever is under your contract, yes.’

So it’s just a matter of language that you are disagreeing with, is it?---Yes, that’s right.

You intended to convey to him that he would be paid his entitlements, correct?---He would be paid whatever he’s entitled to under his contract, yes.

And he then responded, ‘Okay, that’s fine?’---No, I don’t, but yes.

You don’t recall him saying, ‘Okay, that’s fine?’---No, I don’t.

It was not put to Dixon that the applicant had said to him that he considered that he was entitled to a retention bonus, or that this had been confirmed by Dixon or Pepe. Dixon’s evidence was that he knew nothing about, and had no interest in, that matter. However, it was put to Dixon that the applicant had asked for the pay calculation ‘reflecting our agreement’, and he denied that had been said. There was no dispute that Dixon had told the applicant that he would be paid whatever he was entitled to under his contract.

Nor was it put to Pepe that the applicant had said he thought that he was entitled to the retention bonus, or that Dixon or Pepe had agreed to that suggestion. However, Pepe gave evidence in chief that the applicant had asked what he would be paid and that Dixon said he would be paid whatever was in his contract. The applicant submitted that he had not contested Pepe’s evidence, and that there was in any case extraordinary discrepancy between her evidence of the meeting and that of Dixon.

The judge was therefore correct to hold that important aspects of the applicant’s evidence of what was said on 17 September 2012 were not put to Dixon or Pepe. The fact that Dixon and Pepe themselves differed in respect of other aspects of the meeting cannot deny that circumstance. Nor do minor differences between the evidence Dixon gave and that outlined in his outline of evidence affect the position.

The Court is therefore left with a situation where the applicant gave evidence that he had said to Dixon and Pepe that he was entitled to a retention bonus, and that they had said that would be ‘fine’. These things were not put to Dixon or Pepe. On the other hand, there is no doubt that the applicant was told that he would be paid what he was entitled to under the contract. Moreover, the applicant’s evidence that he had said that he wanted to see the pay calculation reflecting their agreement was supported by Pepe’s evidence that the applicant wanted to know what he would be paid.

The failure to put to Dixon or Pepe the applicant’s claim that he asserted an entitlement to a retention bonus, and the further suggestion made in re-examination that they had agreed, meant that those witnesses did not have an opportunity to respond to that evidence. The judge was deprived of any advantage that might have been derived from those witnesses giving that response — although it is not in doubt that Dixon, at least, would have denied the claim in light of his other evidence. Although, as already noted, the failure to put the evidence does not, in this case, suggest an inference that the claim was recently invented, the applicant’s evidence cannot be regarded as unchallenged. Moreover, as the judge observed, there was no note confirming what the applicant claims was said. The applicant did not tell Pepe or Douglas subsequently that he had expressly said on 17 September that he considered that he was entitled to a retention bonus, or that Dixon or Pepe had agreed with that suggestion. Although, as already indicated in relation to ground 1, the applicant referred to a ‘process’ by which agreement was reached when the matter was later raised by Pepe and Douglas,[51] he did not claim to have made that specific assertion or received that response.
[51]See [72]–[75], [107], [110]–[111], [127] above.

On balance, like the judge, we would not accept the applicant’s evidence in so far as he said that he had asserted to Dixon and Pepe on 17 September 2012 that he was entitled to a retention bonus or that they agreed to that assertion.

However, it does not follow that the remainder of the applicant’s evidence should not be accepted. In particular, the evidence is that the applicant asked Dixon and Pepe about his entitlements and it was agreed that he would be paid what he was due. The applicant said that he wanted to see the pay calculation and the actual amount was left unspecified. Pepe’s evidence supported the applicant in this respect. The evidence of Dixon was more equivocal. In cross-examination he maintained that the conversation had been confined to the matters he had given evidence about. It was not specifically put to him that the applicant had asked to see the pay calculation. Instead, he was asked whether he recalled that being said. He said that he did not. There was no re-examination. To the extent that Dixon’s evidence differed from that of the applicant and Pepe, in substance it merely asserted that the meeting only discussed the matters he recalled. The more specific accounts of the applicant and Pepe are to be preferred. In the circumstances, the matters relied on by the judge as to the absence of documentation or what the applicant said, or did not say, to Dixon or Pepe subsequently, do not serve to undermine the evidence of the applicant and Pepe.

In those circumstances, the resolution of ground 2 comes down to the events surrounding the provision of the Manual Salary Calculation. The applicant had asked for confirmation of the amount he was due. That amount was to be determined by the respondent, by reference to its assessment of his entitlements, and provided to him in response to his request. The Manual Salary Calculation was given to the applicant by Pepe later in the day. It contained reference to the two contractual entitlements which the applicant considered he was owed and which he had canvassed with Dixon on 23 August 2012. The document was provided also to Dixon. Neither Dixon nor Pepe examined the document at the time. They were content to rely on those responsible within the Spotless organisation for performing the necessary calculations. None the less, the document was provided to the applicant by way of response to a request for confirmation of an important matter which the parties knew had to be resolved in order to finalise the applicant’s departure from Spotless. In our opinion, the indications point strongly toward there having been an agreement made, upon the applicant’s acceptance of the Manual Salary Calculation, that he would end his employment at Spotless on terms that he would be paid the amounts specified in that document.

The judge’s finding to the contrary was against the evidence that Dixon and the applicant had discussed the applicant’s potential terms of departure on 23 August 2012, that the applicant conveyed to Pepe on 14 September 2012 that he wanted a redundancy and to rely on his earlier discussion with Dixon and get the paid calculation, that Dixon and Pepe told the applicant on 17 September 2012 that he would be paid what he was entitled to under his contract, that the applicant told Dixon and Pepe that he wanted to see how his entitlements were calculated, that Pepe provided such a calculation to the applicant shortly thereafter and that he then indicated that he would finish at Spotless on 19 October 2012. The significance of the calculation and the preceding discussion is underscored by the fact that Pepe provided the calculation to Dixon and asked Douglas to follow up with ‘agreements that need to be signed’. In our opinion, in light of this evidence, the judge’s finding in favour of the respondent was ‘glaringly improbable’ or contrary to ‘compelling inferences’.

For these reasons, ground 2 should be upheld.

There is one final matter. As mentioned above, the applicant advanced a submission that the delay between the trial and the delivery of judgment may have adversely affected the quality of the judgment, such that this Court ought not give as much weight as usual to the trial judge’s findings of fact. The submission was made obliquely in the applicant’s written case, and little was made of it in oral argument. We adverted earlier in these reasons to case law as to the relevance of delay in the context of a case involving review of a trial judge’s findings of fact.[52] In the present case it suffices to say that, notwithstanding the findings expressed above, there is no reason to think that issues of timing bore upon the quality of the judgment.
[52]See [89] above.

Ground 3 — Consideration

The third proposed ground of appeal asserts that the judge was in error in finding that the payment of the retention bonus to the applicant was a payment for a failed or no consideration. The judge held that no consideration had moved from the applicant to Spotless.[53]
[53]Reasons [163].

The applicant contends that by 17 September 2012 it was clear that the applicant wanted to leave Spotless, but that he would not necessarily do so if the package Spotless offered him was less than he thought appropriate. It was submitted that the agreement, which we have held above was entered into, was supported by good consideration, including the applicant’s agreement to accept the figure offered by Spotless and by his signing of certain documents at termination (albeit that those documents were never prepared).

Counsel for the applicant submitted that the consideration consisted of an exchange of promises. The applicant would leave ‘gracefully’ despite having been (in his view) demoted, the terms of his departure having been agreed. It was put that the agreement was ‘to buy peace on both sides, in a time of turmoil’. In addition, it was submitted that the applicant had agreed to perform various specific tasks pending his departure, which was delayed on that account.

The respondent submitted that, for the reasons given in respect of the previous two grounds, the trial judge’s conclusion that there was no consideration for the payment was not attended by any error. It further submitted, in written submissions filed after the hearing of the application for leave to appeal, that it was not put to witnesses at trial, or pleaded, that the agreement was made in order to ‘buy peace’, or that the applicant had ever suggested he had other claims that he could have raised against Spotless. It was submitted that the applicant had only alleged consideration by way of continuing in his employment in respect of the alleged agreement of 23 August 2012. Accordingly, the respondent contended that the consideration sought to be relied on by the applicant was raised for the first time on appeal and that this could not be done since the matter could have been the subject of evidence.

The applicant submitted that the pleadings had only put consideration in issue in relation to the alleged 23 August 2012 agreement, and that in that context the applicant had pleaded that he gave consideration by agreeing to continue to work for the respondent after his position became redundant. In closing submissions, counsel for both parties had indicated that their submissions regarding consideration were addressed to the alleged agreement of 17 September 2012.

It is clear enough from the applicant’s closing submissions at trial that it was contended that the consideration for the 17 September 2012 agreement included the applicant agreeing ‘to go peacefully’. Reliance was placed on the evidence of Douglas that he had expected that a deed of release would be signed, and that Pepe had advised Dixon on 17 September 2012 that Douglas would ‘follow up with agreements that need to be signed’.

In the circumstances, the matters now relied on by the applicant were sufficiently ventilated at trial to justify those same matters being raised on appeal.

The remaining question is therefore whether there was consideration for the 17 September 2012 agreement identified above. While contesting the applicant’s entitlement to raise the matters referred to above, on appeal the respondent did not strongly contest the applicant’s submission that, if there was such an agreement, consideration existed. The evidence shows that there was an exchange of promises by which the applicant departed Spotless following his demotion on terms that were agreed. It is true, as the respondent noted in its supplementary submissions, that the applicant could not point to evidence that the prospect of other potential claims had been discussed. Nor was there evidence that the applicant continued to work in exchange for the promised retention bonus. But in light of the exchange of promises identified, these matters were not significant. Whether or not that exchange is characterised as ‘buying peace’ or ‘leaving gracefully’, it constitutes sufficient consideration. This ground too should therefore be upheld.

Ground 4 — Mistake

The final ground attacks the judge’s finding that the retention bonus was paid to the applicant under a mistake of fact and a mistake of law.[54]
[54]Ibid [161].

The applicant submits that, if there was an agreement reached on 17 September 2012 that he would be paid the retention bonus, there can have been no mistake of law or fact. That submission should be upheld.

The applicant also submitted that there could have been no mistake of fact in circumstances where the Manual Salary Calculation was sent by Dodd to Douglas and Pepe, was given to the applicant by Pepe, and where Pepe provided a copy to Dixon and Douglas in an email advising that it had been provided to the applicant. The respondent made an offer to pay the applicant in accordance with the Manual Salary Calculation. Even if none of Douglas, Pepe and Dixon read the document, the respondent could not repudiate its contents.

This argument does not, as the respondent observed, take the matter beyond the issues already decided. The parties did not address this ground in oral argument and the submissions proceeded, in substance, on the basis that the resolution of the other grounds would determine the question of mistake. In the circumstances there is nothing to be added by examining this argument further. It suffices to say that the final ground should be upheld because the applicant has succeeded in establishing the contract for which he contended.

Conclusion

The application for leave to appeal should be granted and the appeal should be allowed. In place of the orders of the trial judge, there should be judgment for the plaintiff in the amount of $477,400 plus interest.

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[2016] VSCA 299

30 November 2016