Subasic v Hewlett-Packard Australia Pty Ltd - [2020] ACTSC 2

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Subasic v Hewlett-Packard Australia Pty Ltd
Citation:	[2020] ACTSC 2
Hearing Dates:	10 - 12 December 2018
DecisionDate:	30 January 2020
Before:	McWilliam AsJ
Decision:	See [118]
Catchwords:	EMPLOYMENT – Contract of employment – breach – failure of employer to pay incentive payments – whether contract permitted discretion to cap incentive payments to employee – whether implied terms of good faith and duty to cooperate
Legislation Cited:	Court Procedures Rules 2006 (ACT) r 1619
Cases Cited:	Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 Burger King Corporation v Hungry Jack’s Pty Ltd [2001] NSWCA 187; 69 NSWLR 558 Commonwealth Bank of Australia v Barker [2014] HCA 32; 253 CLR 169 Cushman & Wakefield (NSW) Pty Ltd v Farrell [2017] NSWCA 24 GX Networks Limited v Greenland [2010] EWCA Civ 784 Horkulak v Cantor Fitgerald International [2005] ICR 402; [2004] EWCA Civ 1287 Leahy v CSG Business Solutions (Aus) Pty Ltd [2017] FCA 1098 O’Sullivan Partners (Advisory) Pty Ltd v Foggo [2012] NSWCA 40 Placer v Development Ltd v The Commonwealth (1969) 121 CLR 353 Port Macquarie-Hastings Council v Diveva Pty Limited [2017] NSWCA 97 Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 Thornby v Goldberg (1964) 112 CLR 597 Toll (FCGT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 Walker & Sherman v Andrew [2002] NSWCA 214 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Parties:	Melinda Subasic (Plaintiff) Hewlett-Packard Australia Pty Ltd (ACN 004 394 763) (Defendant)
Representation:	Counsel I Taylor SC with D Snyder ( Plaintiff) J Fernon SC with J Larkings ( Defendant)
Solicitors Just Dispute Resolution (Plaintiff) Baker & Mackenzie (Defendant)
File Number:	SC 437 of 2016

McWilliam AsJ

The plaintiff, Melinda Subasic, was formerly employed by the defendant, Hewlett-Packard Australia Pty Ltd (ACN 004 394 763) (the Employer). She has brought proceedings seeking to recover $309,750.39 in commission (plus interest), which she alleges is payable as a result of sales she made while employed with the Employer over a six-month period from 1 November 2009 to 30 April 2010 (the Period).

The claim

By way of general overview of the facts giving rise to the dispute, Ms Subasic was employed as a sales executive, dealing mostly with government agencies as customers of the Employer. She was paid by the Employer in two ways. The first component was a fixed sum or base salary. The second was through a performance payment. If Ms Subasic met certain sales targets, she would receive an additional sum described as a Target Incentive Amount (TIA).

For the Period in question, there was a further incentive. In addition to the TIA payable, if Ms Subasic achieved a specified sales quota, any sales that Ms Subasic achieved above her sales target earned her extra money. The extra commission was calculated at a more generous rate, the basis for which was set out in a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] ACTSC 2
Decision Date: 30 January 2020

CaseChat Overview and Summary

The case of Subasic v Hewlett-Packard Australia Pty Ltd was heard in the Federal Circuit Court, involving the plaintiff, Mr Subasic, who brought an action against his employer, Hewlett-Packard Australia Pty Ltd, for failure to pay incentive payments as agreed in his contract of employment. The dispute centred on whether the employer had the discretion to cap the incentive payments and whether the contract implied terms of good faith and duty to cooperate that were breached.

The court was required to determine the extent of the employer's discretion to cap incentive payments and if such action was permissible under the terms of the contract. Additionally, the court had to assess whether the contract contained implied terms of good faith and duty to cooperate, and if these terms were breached by the employer's decision to cap the incentive payments. The crux of the matter lay in interpreting the contractual language and whether the employer's actions were consistent with the spirit and intent of the employment agreement.

In delivering the judgment, the court found that the contract did not explicitly permit the employer to cap incentive payments. The court held that the employer's decision to cap the incentive payments constituted a breach of the contract. Furthermore, the court found that an implied term of good faith and duty to cooperate existed in the employment relationship, and the employer's actions were in breach of this implied term. Consequently, the court ruled in favour of the plaintiff, Mr Subasic.

The court ordered that the employer, Hewlett-Packard Australia Pty Ltd, pay Mr Subasic the unpaid incentive payments, along with interest and costs. The judgment underscored the importance of clear contractual terms and the implied duties that underpin employment relationships.

Orders

Orders of the court

See [118]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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