Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 3)
[2024] FCA 233
•14 March 2024
FEDERAL COURT OF AUSTRALIA
Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 3) [2024] FCA 233
File number: SAD 147 of 2022 Judgment of: KENNETT J Date of judgment: 14 March 2024 Catchwords: CONTRACTS – Application for damages for breach or repudiation of contract – where applicants contractors providing services to respondent under Services Agreement – where clause 9.1(a) of Services Agreement granted respondent power to terminate if either applicant disobeyed a lawful direction – where respondent issued direction to all employees and contractors to provide evidence of COVID-19 vaccination status or valid medical exemption – where second applicant did not comply with direction and respondent terminated Services Agreement – whether Services Agreement terminated by respondent according to its terms – onus of proving whether termination justified or constituting breach or renunciation – whether applicants disobeyed lawful direction given by respondent – whether directions given lawful – whether directions given reasonable – whether applicants committed serious misconduct – whether applicants breached material provision of Services Agreement – whether respondent’s decision to terminate reasonable – application dismissed
DAMAGES – Where damages sought on basis that but for the termination there was “very high probability of continued renewals” of Services Agreement – likelihood of renewal – where clause of Services Agreement limiting damages – principle of least burdensome performance
CONTRACTS – Application for order under s 16 of the Independent Contractors Act 2006 (Cth) varying Services Agreement to create liability on part of respondent to compensate applicants for loss or damage occasioned by invalid termination of Services Agreement on basis that second applicant failed to comply with direction to be vaccinated against COVID-19 – whether such direction given – where other grounds for termination
Legislation: Constitution s 51(xx)
Independent Contractors Act 2006 (Cth) ss 4, 5, 11, 12, 15, 16
Therapeutic Goods Act 1989 (Cth)
Cases cited: Australian Tramway Employees’ Association v Brisbane Tramways Co Ltd (1912) 6 CAR 35
Berry v CCL Secure Pty Ltd [2020] HCA 27; 271 CLR 151
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66
Buchmueller v Allied Express Transport Pty Ltd [1999] FCA 319; 88 IR 465
Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87; 373 ALR 591
Chaplin v Hicks [1911] 2 KB 786
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92
Construction, Forestry, Maritime, Mining and Energy Union v Mt Arthur Coal Pty Ltd [2021] FWCFB 6059
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd[2022] HCA 1; 275 CLR 165
Currie v Dempsey (1967) 69 SR (NSW) 116
Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635
Falconer v Chief Health Officer (No 3) [2022] WASC 270
Fink v Fink (1946) 74 CLR 127
Finlay v Commissioner of Police (WA) [2022] WASC 272
Foran v Wight (1989) 168 CLR 385
Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; 207 FCR 298
Kassam v Hazzard [2021] NSWSC 1320
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; 233 CLR 115
Lavarack v Woods of ColchesterLtd [1967] 1 QB 278
Massoud v NRMA Insurance Ltd(1995) 62 NSWLR 657, 659; 8 ANZ Insurance Cases 61-257
McManus v Scott-Charlton (1996) 70 FCR 16
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 256 CLR 104
North v Television Corporation Ltd (1976) 11 ALR 599
Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444
One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77; 262 FCR 527
Parkin v Alliance Airlines Pty Ltd [2023] FCA 386
Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70
R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday and Sullivan(1938) 60 CLR 601
Sanpine Pty Ltd v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365
TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130
Thompson v IGT (Australia) Pty Ltd [2008] FCA 994
Vines v Djordjevitch (1955) 91 CLR 512
Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101; 233 ALR 687
White v Johnston [2015] NSWCA 18; 87 NSWLR 779
Wolfraad v Serco Australia Pty Ltd [2022] FedCFamC2G 1063
Carter, JW, Carter’s Breach of Contract (2018, 2nd ed, LexisNexis Butterworths)
Heydon, JD, Heydon on Contract (Thomson Reuters, 2019)
Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 202 Date of hearing: 31 July – 4 August, 17 and 21 August 2023 Counsel for the Applicants: S Ower KC with D Blyth Solicitor for the Applicants: Polson Legal Counsel for the Respondent: B Roberts KC with H Doyle Solicitor for the Respondent: Finlaysons
ORDERS
SAD 147 of 2022 BETWEEN: TREDDERS INVESTMENTS PTY LTD (ACN 089 102 958) AS TRUSTEE FOR WARREN TREDREA TRUST
First Applicant
WARREN TREDREA
Second Applicant
AND: CHANNEL 9 SOUTH AUSTRALIA (ACN 007 577 880)
Respondent
ORDER MADE BY:
KENNETT J
DATE OF ORDER:
14 MARCH 2024
THE COURT ORDERS THAT:
1.The originating application be dismissed.
2.Subject to order 3 below, the applicants are to pay the respondent’s costs of the proceeding as agreed or assessed.
3.If any party wishes to seek a different order as to costs:
(a)that party is to file written submissions of no more than five pages in support of the order that it seeks, together with any evidence on which it wishes to rely, by 28 March 2024;
(b)the other party is to file written submissions in response of no more than five pages, together with any evidence on which it wishes to rely, by 11 April 2024; and
(c)the question of costs will be dealt with on the papers unless it appears that an oral hearing is necessary.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
KENNETT J:
The second applicant (Mr Tredrea) is a former Australian Football League (AFL) player who has achieved a measure of fame, particularly in South Australia. He retired from playing football in 2010. Since around 2005 he has been providing various services to the respondent (Channel 9), latterly (and relevantly) as a sports presenter and reporter. Channel 9 is a company that provides news and entertainment broadcasting services primarily in South Australia. It is affiliated with similar entities operating in other parts of Australia and subject to a significant degree of management control through what is referred to as the Channel 9 group (often referred to in internal documents as Nine).
Until 2018 Mr Tredrea had a direct employment relationship with Channel 9. In 2018, at his initiative, a fresh arrangement was arrived at by which Mr Tredrea’s services were provided to Channel 9 through the first applicant (Tredders Investments), a corporate entity that he controlled at all times relevant to this proceeding. The arrangement was embodied in a written contract dated 15 November 2018 and expressed to be for a term of two years commencing on 1 December 2018. The arrangement was renegotiated in 2020, leading to a second written contract dated 31 August 2020 (the Services Agreement). Pursuant to that Agreement, Mr Tredrea performed the role of sports presenter, appearing on weeknight television news bulletins, among other duties. The Services Agreement was expressed to have effect for a term of two years, commencing on 1 December 2020 and continuing until 30 November 2022.
The Services Agreement was terminated by Channel 9 on 4 January 2022 in circumstances which were, briefly, as follows.
(a)Late in 2021 the Channel 9 group developed and implemented a national corporate policy which was promulgated to all staff including Mr Tredrea on 8 November 2023 and described as the “Condition of Entry Policy”. Its effect was, from 1 December 2021, to limit access to Channel 9 premises to persons who were fully vaccinated against COVID-19 or who had a recognised exemption from vaccination. Proof of vaccination status, or medical exemption, was to be provided through an online portal.
(b)In the weeks leading up to 1 December Mr Tredrea stated in a number of meetings and emails that he was not vaccinated and was investigating obtaining a medical exemption. On 30 November, he sent an email expressing, among other things, confusion about what kind of medical exemption was required, concern about the impacts of Therapeutic Goods Administration (TGA) approved vaccines on his health and doubt about their effectiveness at reducing transmission or severity of symptoms.
(c)After the news bulletin on 30 November, Mr Tredrea was advised not to attend for work the next day and was placed on a paid “relief of service period” until 4 January 2022.
(d)On 4 January 2022 Channel 9 wrote to the applicants advising them that it had terminated the Services Agreement.
The applicants seek damages for breach or repudiation of the contract constituted by the Services Agreement. Alternatively, they seek an order under s 16 of the Independent Contractors Act 2006 (Cth) (the IC Act) varying the Services Agreement to the effect that, if it is terminated on the ground that Mr Tredrea failed to comply with a direction requiring him to be vaccinated, Channel 9 is liable to compensate the applicants for any loss or damage thereby occasioned.
THE SERVICES AGREEMENT
The Services Agreement was expressed to be between Channel 9, the Warren Tredrea Trust (of which Tredders Investments is the Trustee), defined as “the Company”, and Mr Tredrea (defined as “the Key Person”). The Trust is not a company or otherwise a legal person, but the proceeding was conducted on the basis that Tredders Investments was a party to the Services Agreement. The important provisions of the Services Agreement for present purposes were as follows.
As noted earlier, the agreement was for a term commencing on 1 December 2020 and ending on 30 November 2022 (cl 2.1).
Clause 3 of the Services Agreement was headed “Services” and included the following provisions:
3.1 The Company must ensure that the Key Person provides his services on or in connection with Programs as directed from time to time by Nine, which may include:
(a) Sport Presenter for any or all Nine News programs, including Adelaide's afternoon news, Adelaide's 6pm news and Nine News on 5AA;
(b) voice-overs for the programs as reasonably requested by Nine;
(c) appearing in, contributing to or preparing other content, which may include short form video, podcasts, content for a blog, or postings during the broadcast of any Program on digital platforms connected to a Program (including any social media platforms) or any other platforms of Nine, its advertisers and/or sponsors, subject to clause 3.4.
3.2The Key Person must participate in all publicity and promotional appearances as required by Nine from time to time (including, but not limited to, on-air, print, radio or digital promotions and advertising, interviews, attendance at functions and launches, use of social media, and photography) associated with the Nine Network, the Group, a Program of the Group, promotion of related businesses of the Group (including without limitation STAN), or promotion of sponsors of or advertisers associated with Programs of the Group subject to clause 3.4.
3.3The Key Person must create and use his personal digital platforms (including both online and social media platforms such as Facebook, Instagram and Twitter) for purposes connected with his duties under this agreement, subject to Nine's directions and policies.
…
3.5The Key Person consents to the Company using his name, image, and likeness in connection with the promotion of the Programs in which the Key Person participates, every manner, form and media of exploitation of such Programs and in the general promotion of the Group.
…
3.9The Company and the Key Person must safeguard the success, reputation and interests of the Group in the capacity in which they are retained.
3.10The Company must ensure that the Key Person gives the whole of his time, ability, and attention in the hours reasonably required by Nine to the business and affairs of Nine and to faithfully and diligently perform such services in relation to the business and affairs of Nine as may from time to time be given to the Key Person by or at the direction of Nine.
3.11 The Key Person must comply with all reasonable directions of the Company.
3.12 The Key Person must not, by his reputation or conduct (whether while performing services under this Agreement or otherwise), bring himself into disrepute or injure or disparage the reputation of any Group Member (or any officer, employee or agent of a Group Member). If in Nine's opinion the Key Person has acted to bring himself into disrepute or to injure or disparage the reputation of any Group Member (or any officer, employee or agent of a Group Member), the Company and Key Person must comply with any directions given by Nine to them to rectify any such damage. Nine's right to issue directions in relation to such actions is in addition to Nine’s right to terminate this Agreement as a result of such actions in accordance with clause 9.
3.13The Company and Key Person must comply with Nine’s policies and procedures, including those set out on Nine’s intranet site, in so far as they are relevant to the Company and Key Person.
Clause 3.13 must be read with cl 14.2(c), by which Tredders Investments and Mr Tredrea acknowledged that Channel 9 might amend its policies or procedures from time to time in its absolute discretion.
Clause 4 was headed “Protection of Nine’s business”. Within this section, cl 4.1 required Mr Tredrea not to work for or supply services to any other company, engage in any commercial discussions, accept any offer of employment or engage in dealings involving personal endorsement without the permission of Channel 9. Clause 4.2 required him not to have discussions with any journalists or media representatives other than as approved by Channel 9 or in the course of maintaining personal relationships.
Clause 4.3 made an exception from these stipulations to allow certain pre-existing commitments of Mr Tredrea to continue. One of these was an arrangement with a local radio station (Radio 5AA) in which Mr Tredrea presented a weekly football or sports segment.
Clauses 4.4–4.10 made detailed provisions preventing Mr Tredrea from engaging in activities that might be facilitated or enhanced by his provision of services to Channel 9, or activities in potential competition with Channel 9, for defined periods after the expiry of the term of the Services Agreement.
Clause 5 of the Services Agreement provided for a monthly fee, payable to Tredders Investments (but conditional on the provision of a tax invoice). The monthly payment was to be calculated “on the basis of $192,500 per annum” (cl 5.1). The fees were exclusive of GST and Tredders Investments was authorised to invoice Channel 9 for any amounts of GST that it was liable to pay in respect of the fees.
Clause 9 of the Services Agreement was headed “Termination”. It included the following provisions.
9.1Nine may terminate this Agreement at any time without notice or payment in lieu of notice if:
(a) the Company or the Key Person disobeys a lawful direction;
(b)the Key Person is involved in serious misconduct, including, without limitation;
(i)wilful, or deliberate, behaviour by the Key Person that is inconsistent with the continuation of this Agreement;
(ii) conduct that causes imminent, or serious, risk to the health or safety of a person;
(iii)in the course of the services under this Agreement, engaging in theft, fraud or assault;
(iv) being under the influence of alcohol or any illegal substance at work;
(v) refusing to carry out a lawful and reasonable instruction;
(vi)knowingly, recklessly or negligently misleading or deceiving the viewing audience of the television business conducted by Nine;
(c)the Company or the Key Person breaches any material provision of this Agreement including under clauses 3, 4 or 7;
(d)the Key Person dies;
(e)the Key Person becomes unable to pay his debts as they become due;
(f)the Key Person or the Company fails to observe or perform any of the duties or obligations imposed under this Agreement and does not correct the failure within a reasonable period of being requested in writing by Nine to do so;
(g)the Key Person is charged or found guilty by a Court of a criminal offence;
(h)the Key Person has engaged in any conduct which, in Nine’s opinion, could cause material damage to the profitability, viability, reputation or business interests of any Group Member;
(i)an application (other than a frivolous or vexatious application) or an order is made for the winding-up or dissolution of the Company or a resolution is passed, or a meeting is convened for the purpose of considering a resolution, for winding-up of the Company or for placing the Company under involuntary administration;
(j)a receiver or receiver and manager, official manager, trustee or similar officer is appointed to all or any part of the assets or undertaking of the Company; or
(k)in the opinion of Nine, the public image or reputation of the Key Person, Nine, any part of Nine’s business, any other Group Member or any part of any other Group Member’s business has been damaged or impaired as a result of any act or omission of the Key Person (whether while performing duties under this agreement or otherwise).
Clauses 9.2 and 9.3 authorised Channel 9 to terminate the Services Agreement on one month’s notice in writing in defined circumstances. They were not invoked in the present case, but have some relevance to the issue of damages if that issue is reached. They were as follows:
9.2 Nine may terminate this Agreement at any time by giving one month’s notice in writing to the Company and the Key Person or payment in lieu of such notice if:
(a) the Key Person is incapacitated by illness, injury or otherwise prevented from performing the Key Person’s duties under this Agreement for a period totalling in aggregate more than twelve weeks in any 12 month period; or
(b) the Key Person is advised by an independent medical officer that the Key Person’s health has deteriorated to such a degree that it is advisable for the Key Person to leave Nine.
9.3 Nine may terminate this agreement on 1 month’s notice in writing, if Nine made reasonable requests of the Company and Key Person in relation to the provision of Other Services with NWS News and considers that the Company and the Key Person have not provided Other Services:
(a) to the level specified in Schedule 1 in the previous 12 months; or
(b) to the level reasonably requested by Nine if Nine has not requested Other Services to the level specified in Schedule 1.
Clause 12.2 required Tredders Investments to maintain workers compensation insurance and cl 12.3 required it to satisfy all salary, annual and sick leave and superannuation entitlements of Mr Tredrea. Clause 12.4 required it to pay any payroll tax and other taxes, duties or levies payable in respect of Mr Tredrea’s employment. Clause 12.6 expressed the intention that the relationship between Channel 9 and Tredders Investments was to be an “independent contracting relationship” and not to create an employment relationship between Channel 9 and Mr Tredrea.
Finally, cl 14.4 provided as follows.
Limitation on Damages
Any damages to which the Company and the Key Person may be entitled arising out of a breach of any express or implied term of this Agreement:
(a)are not available for personal illness or injury or non-pecuniary loss (including, but not limited to hurt, humiliation, distress and disappointment); and
(b)are limited to the damage which the innocent party would have suffered if the party in breach had, instead of breaching the Agreement, lawfully terminated the Agreement at the earliest possible opportunity; and
(c)will not include any consequential damage, including but not limited to any direct or indirect loss of opportunity to earn remuneration through work in the media industry or in a position substantially similar to the position occupied by the Key Person during the term.
THE PLEADINGS
Channel 9 said that it was holding the applicants strictly to their pleaded case. Some attention to the terms of the pleadings is therefore needed.
The Statement of Claim
After various preliminary matters that do not need to be mentioned here, the Statement of Claim (SOC) pleads various terms of the Services Agreement and that the Services Agreement was a services contract within the meaning of s 5 of the IC Act.
The SOC then pleads various matters in relation to COVID-19 (at [9]–[10]). These are:
(a)the nature of the disease (a respiratory disease caused by the virus known as SARS-CoV-2 (coronavirus)) and its initial identification in Australia in January 2020; and
(b)the provisional approval under the Therapeutic Goods Act 1989 (Cth) (the TG Act), as at August 2021, of three vaccines in relation to COVID-19 (referred to as the Pfizer vaccine, the AstraZeneca vaccine and the Moderna vaccine, and referred to together in the pleadings as the Provisionally Approved Vaccines).
The circumstances leading to the termination of the Services Agreement are pleaded as follows (at [11]–[15]) (excluding particulars):
11. On or about 15 October 2021, [Channel 9] gave a direction (“the Direction”) to the applicants that, in order for the second applicant to attend a site or location where work is being performed, or a function is being held, in connection with the respondent from 1 December 2021, the second applicant had to provide evidence to the respondent that he was “fully vaccinated against COVID-19”, being where an “Australian Government Digital COVID-19 Certificate confirms that [the second applicant] was fully vaccinated”.
12. A person could obtain an “Australian Government Digital COVID-19 Certificate” within the meaning of the Direction only if they were vaccinated with two doses of the Provisionally Approved Vaccines.
13. On 1 December 2021 the respondent extended the time for the second applicant to comply with the Direction to 4 January 2022.
14. The second applicant did not comply with the Direction.
15. On 4 January 2022, the respondent terminated the Services Agreement with Immediate effect.
Under the heading “No grounds to terminate”, the SOC alleges at [16] that Channel 9 did not have “any grounds or basis to terminate the Services Agreement”, under cl 9.1 or at all. Paragraphs [17]–[19] give content to this allegation although they are expressed not to limit it.
SOC [17] pleads that Mr Tredrea did not disobey a lawful direction within the meaning of cl 9.1(a). It alleges that “[a] lawful direction for the purposes of that clause is a reasonable one”. It then alleges that the direction given on or about 15 October 2021 was not reasonable. The reasons why that direction is said not to be reasonable are lengthy but should be set out in full. They are as follows:
17.1 Since January 2020, in addition to the original strain of SARS-Cov-2, there have been several variants of SARS-CoV-2 which have been designated as variants of concern by the World Health Organisation and detected in Australia. One such variant of concern was the Delta variant, which was first detected in Australia in about May 2021. The Delta variant had the same level of virulence as the original strain. As of August 2021, the Delta variant was the predominant variant of SARS-CoV-2 in Australia. A further variant of concern was the Omicron variant, which was first detected in Australia in about December 2021. The Omicron variant was more contagious, but significantly less virulent, than the Delta variant. As of January 2022, the Omicron variant was the predominant variant of SARS-CoV-2 in Australia.
17.2 A person who has received vaccination with one of the Provisionally Approved Vaccines and who subsequently became infected with either the Delta or Omicron variants had a similar risk of transmitting the virus to another person as an unvaccinated infected person had of transmitting the virus.
17.3 In any event:
17 .3.1 As at November 2021, only a limited number of employees or contractors of the respondent (either generally, or in the alternative, based in South Australia) had not been vaccinated with at least one dose of the Provisionally Approved Vaccines. Most employees had undergone vaccination with at least one dose and, and, if he or she had not had a second dose, intended to do so.
17.3.2 There was a very low degree of risk of serious illness or mortality arising from the Delta variant or the Omicron variant to vaccinated persons (especially when compared to the original strain).
17.3.3 Similarly, there was a similarly low (albeit comparatively higher) degree of risk of serious illness or mortality arising from the Delta variant or the Omicron variant to unvaccinated persons.
17.3.4 Further particulars of the numbers of vaccinated and unvaccinated employees and contractors of the respondent at various points in time will be provided after discovery.
17.4 A person who received vaccination with at least one dose of the AstraZeneca vaccine had an increased risk of certain medical conditions.
Particulars
17.4.1 Blood clotting; Central Venous Thrombosis; Pulmonary embolism; Cardiac embolism;
17.4.2 Guillain Barre Syndrome.
17.4.3 Transverse myelitis.
17.5 A person who received vaccination with at least one dose of the the [sic] Pfizer vaccine or the Moderna vaccine had an elevated risk of certain medical conditions.
Particulars
17.5.1 Myocarditis.
17.5.2 Pericarditis.
17.5.3 Heart arrhythmias.
17.5.4 Bell's Palsy.
17.5.5 Anaphylaxis.
17.6 The Pfizer vaccine and the Moderna vaccine are mRNA (rather than protein-based) vaccines and the Astra Zeneca is an adenovirus vector vaccine whereby all these vaccines instruct the cells of the body to produce the SARS-CoV-2 spike protein, to stimulate the body to produce antibodies that bind to and block the virus allowing it to be cleared from the body, in circumstances where:
17.6.1 The effect of the re-programming of cells in the body by these vaccines is not known; and
17.6.2 The Phase 3 human trials of these vaccine have still not been completed; and
17.6.3 The mRNA in the provisionally approved vaccines has been modified such it [sic] is much longer-lasting in the body than normal mRNA.
17.6.4 The long-term safety of the provisionally approved vaccines is still not known; and
17.6.5 The mRNA vaccines contain polyethylene glycol, which is an artificial substance known to cause allergic reactions in humans.
17.7 There are, and were at all material times, other measures and control mechanisms in the workplace that were equally effective as, if not more effective than, vaccination by one of the Provisionally Approved Vaccines in reducing the risk of transmitting the Delta variant or the Omicron variant to a site or location where work is being performed, or a function is being held, in connection with the respondent, especially given the limited number of employees who have not been vaccinated, and that did have the risks arising above.
Particulars
17.7.1 Requiring all employees, or all unvaccinated employees, to undertake a rapid antigen test (RAT) and have a negative result prior to performing work duties.
17.7.2 Requiring all unvaccinated employees to wear appropriate face masks when performing work duties.
17.7.3 Ascertaining whether any unvaccinated employee has antibodies to SARS-CoV2 and/or is otherwise immune.
17.7.4 Ascertaining whether any vaccinated employee does not have antibodies to SARS-CoV2 and/or is otherwise susceptible.
17.7.5 Ensuring that employees that exhibited symptoms of a respiratory tract infection were told to leave work and not return until they produced a negative RAT or PCR test.
17.7.6 Ensuring that all employees were made aware of the need to maintain appropriate social distance from others.
17.7.7 Ensuring that all employees exercised good hygiene, including hand washing, regular cleaning of communally touched surfaces with disinfectants and wearing gloves where appropriate.
17.7.8 Ensuring that employees were made aware that, if they were exhibiting any respiratory symptoms they should not come into work.
17.7.9 Ensuring that employees who exhibited respiratory symptoms while working isolated and produced a negative RAT before returning to work.
17.7.10Reducing the time spent by employees in and about public areas.
17.7.11Improving ventilation in the workplace.
17.7.12Providing suitable hygiene stations at any place of employment.
17.7.13Periodically checking in with employees to determine whether they were unwell.
It will be observed that SOC [17] pleads, as objective facts constituting reasons why the direction was not reasonable, matters concerning the behaviour of the coronavirus, the risks and benefits of vaccination with the Provisionally Approved Vaccines and the availability and efficacy of other measures. It does not plead that Channel 9 knew or ought to have known of these matters at any particular time.
SOC [18]–[19] are as follows:
18. Without limiting the plea in paragraph 16 above, the second applicant was not involved in serious misconduct by refusing to carry out a lawful and reasonable instruction within the meaning of clause 9.1(b)(v) of the Services Agreement. The applicants repeat the allegations in paragraph 17 above.
19. Without limiting the plea in paragraph 16 above, the second applicant did not undertake conduct which could cause material damage to the reputation and business interests of the respondent within the meaning of clause 9.1(h) of the Services Agreement.
It is then alleged that, by reason of Channel 9’s breach of the Services Agreement, it repudiated the Agreement, and that the applicants accepted the repudiation (at [20]–[21]).
SOC [22]–[23] set out the claim under the IC Act.
(a)The central allegation is that, if it was otherwise lawful for Channel 9 to give the direction, it was unfair or harsh for the Services Agreement to have the potential for such a direction to be given in relation to COVID-19. The matters pleaded at [17] are relied on.
(b)The order sought under s 16 of the IC Act is an order varying the Services Agreement to the effect that, if Channel 9 takes action to terminate the Services Agreement on the ground of a failure to comply with a direction to be vaccinated. Channel 9 is to compensate the applicants for any loss or damage occasioned thereby.
SOC [24] identifies the loss or damage alleged to have been suffered, as follows (omitting the particulars):
24.1 loss of the sum due and payable under the Services Agreement by the respondent to the first applicant for the period 4 January 2022 to 30 November 2022, being $176,458.32 plus GST; and
24.2loss of an opportunity to renew with the respondent an agreement to provide the services provided under the Services Agreement for a further term of up to a further 30 years.
The Defence
The following features of Channel 9’s Defence should be noted.
(a)Channel 9 says that it does not know and therefore cannot admit SOC [9] (the nature of COVID-19) but admits SOC [10] (the provisional approval of the three vaccines as at August 2021).
(b)SOC [11] and [12] are denied and alternative accounts are given. The facts concerning the giving of a direction by Channel 9 and Mr Tredrea’s non-compliance with it will be considered below.
(c)SOC [13]–[15] are substantially admitted.
(d)SOC [16] is denied. Channel 9 says that it had valid grounds to terminate the Services Agreement under cl 9.1 thereof, and by reason that the applicants’ conduct amounted to a repudiatory breach. The basis for this assertion is, in outline:
(i)the applicants had agreed to comply with all reasonable directions (cl 9.1(a)), and the directions given by Channel 9 were lawful directions taking into account Channel 9’s obligations under work health and safety legislation;
(ii)the applicants engaged in serious misconduct, within the meaning of cl 9.1(b)(v) of the Services Agreement, both by refusing to comply with reasonable directions and by reason of Mr Tredrea having expressed an opinion in relation to vaccination during one of his radio broadcasts on 5AA;
(iii)the applicants breached material provisions of the Services Agreement (cl 9.1(c)) by reason of Mr Tredrea having failed to comply with reasonable directions (as referred to above) and by failing to comply with policies or procedures as required by cl 3.13 (the relevant policy or procedure being the Condition of Entry Policy);
(iv)the applicants failed to observe or perform duties or obligations imposed under the Services Agreement and did not correct that failure after being requested to do so (cl 9.1(f)), by reason of Mr Tredrea’s non-compliance with the direction;
(v)the applicants engaged in conduct which, in Channel 9’s opinion, could cause material damage to the profitability, viability, reputation or business interests of Channel 9 (cl 9.1(h) and (k)) as a result of:
(A)Mr Tredrea’s non-compliance with the direction;
(B)Mr Tredrea’s comments on Radio 5AA; and
(C)not being able to send Mr Tredrea to briefings at sporting clubs as a result of his unvaccinated status; and
(vi)also by reason of the things mentioned in (v) above, the applicants engaged in conduct which, in Channel 9’s opinion, could cause material damage to the public image or reputation of Mr Tredrea (cl 9.1(k)).
(e)SOC [17] is denied, apart from [17.3.1]. In further response, Channel 9 pleads as follows ([17.1]–[17.6]):
17.1 [Channel 9] formed a view that conformed at all relevant times with the Australian Government recommendations and public statements of the South Australian Chief Public Health Officer in relation to vaccination;
17.2 [Channel 9] did not otherwise have independent knowledge of or an independent opinion as to the rate of transmission of COVID-19 and the comparative efficacy of various measures in reducing transmission of COVID-19;
17.3to the extent that paragraph 17.1 refers to matters post-dating any of the Directions, those matters are irrelevant;
17.4 at the time when [Channel 9] gave the Directions, Australian Government recommendations and public statements of the South Australian Chief Public Health Officer were to the effect that vaccination was an effective measure to reduce the risk of transmitting COVID-19 and that this reflected the prevailing medical opinion;
17.5 further and in any event, the Directions were a reasonable response to an uncertain health risk;
17.6 [Channel 9] has implemented other reasonably practicable control measures to reduce the risk of transmitting COVID-19 in its workplace, both prior to and after the Directions, including:
17.6.1ensuring that staff and contractors that exhibited symptoms of a respiratory tract infection were told to leave work and not return until they produced a negative RAT or PCR test;
17.6.2ensuring that staff and contractors were made aware of the need to maintain appropriate social distancing from others;
17.6.3ensuring that it advised staff and contractors to wear masks where they could not socially distance from others; and
17.6.4ensuring that it advised staff and contractors to exercise good hygiene, including hand washing and regular cleaning of communally touched surface [sic] with disinfectants;
(f)SOC [18]–[21] are denied.
(g)As to the IC Act, Channel 9 pleads that:
(i)the terms of the Services Agreement requiring compliance with lawful and reasonable directions were not unfair or harsh within the meaning of s 12 of the IC Act;
(ii)the claim as pleaded impermissibly addresses the question of harshness or unfairness in the events that have happened since the Services Agreement was formed; and
(iii)the claim is therefore vague, embarrassing, untenable and liable to be struck out.
The Defence also takes issue with the applicants’ pleaded case on loss or damage.
(a)SOC [24.1], which claims the remaining payments due under the Services Agreement, is simply denied.
(b)As to SOC [24.2], the Defence:
(i)relies on cl 14.4(b) of the Services Agreement to contend that any such loss is unrecoverable;
(ii)observes that Channel 9 was under no compulsion to renew the Services Agreement;
(iii)contends that, by reason of the applicants’ conduct described above, Channel 9 would not have renewed the Services Agreement had it been unable validly to terminate it; and
(iv)pleads that there was no legitimate expectation of renewal of the Services Agreement and Mr Tredrea had been counselled in relation to performance issues.
CHANNEL 9’S POWER TO TERMINATE THE SERVICES AGREEMENT
It is not in doubt that Channel 9 purported to terminate the Services Agreement. This was done by way of a letter signed by Mr Jeremy Pudney, News Director of Nine News Adelaide, addressed to both of the applicants and dated 4 January 2022 (the termination letter). The termination letter explained the reasons for the decision (which was made by Mr Pudney after consulting other officers of Channel 9) as follows:
(a)The Condition of Entry Policy required, from 1 December 2021, that any employee or contractor who attended Channel 9 premises or worked in the field must be “fully vaccinated against COVID-19 with evidence having been provided to Nine”. The policy provided that Channel 9 would endeavour to make necessary adjustments where an employee or contractor had a “valid Medical Exemption”.
(b)Both applicants were bound by the Condition of Entry Policy.
(c)Mr Tredrea’s role required him to attend Channel 9’s premises and to work in the field, where he interacted with other Channel 9 personnel and members of the public. The Condition of Entry Policy therefore required him, by 1 December 2021, to provide Channel 9 with evidence that he was fully vaccinated against COVID-19 or had a valid medical exemption.
(d)Mr Tredrea had also been directed by Mr Pudney to provide evidence of these matters.
(e)On 3 December 2021 Channel 9 had given Mr Tredrea additional time to provide the evidence required by the Condition of Entry Policy. That time expired on 4 January 2022. He had not provided that evidence.
(f)In these circumstances Channel 9 had decided to terminate the Services Agreement with immediate effect for “reasons including that”:
•you have disobeyed multiple lawful directions to provide the Required Evidence (Services Agreement cl 9.1(a));
•Mr Tredrea has engaged in serious misconduct, being conduct by which you refused to carry out a lawful and reasonable instruction (Services Agreement cl 9.1(b)(v));
•Mr Tredrea has engaged in conduct which, in Nine’s opinion, could cause material damage to the reputation and business interests of Nine (Services Agreement cl 9.1(h)); and
•in the opinion of Nine, Mr Tredrea’s public image and reputation has been damaged and impaired as a result of Mr Tredrea’s conduct (Services Agreement cl 9.1(k)).
The case turns on whether Channel 9 was entitled, pursuant to the Services Agreement, to terminate that Agreement in the circumstances that existed in January 2022. If Channel 9 was entitled to take that step, the termination brought the Services Agreement to an end according to its terms; no relief lies under the law of contract and only the claim under the IC Act remains. If it was not so entitled, the purported termination was a breach of the Services Agreement amounting to repudiation, entitling the applicants to terminate and to remedies including damages.
Whether circumstances existed that entitled Channel 9 to terminate the Services Agreement is to be determined objectively, on the evidence before the Court. It does not depend on the reasons expressed in the termination letter (other than to the extent that the letter evidences an “opinion” of Channel 9 for the purposes of cl 9.1(h) or (k)). In addition to the provisions of the Services Agreement cited in the termination letter, Channel 9’s Defence relies on cl 9.1(c) and (f). It is convenient to consider each potentially relevant provision of cl 9.1 in turn.
Onus of proof
Before doing so, it is useful to say something concerning the onus of proof.
The uncontroversial starting point is that, in a civil suit (absent any statutory allocation of onus), the onus lies on the plaintiff or applicant to prove all of the facts which are essential to its cause of action or in some other way an essential part of its case. It is also uncontroversial that the defendant or respondent bears the onus of proving any facts that, rather than negativing some aspect of the plaintiff’s cause of action, constitute a defence to it. The principle is stated in, for example, Currie v Dempsey (1967) 69 SR (NSW) 116 at 126 (Walsh JA) (Currie). In identifying where the onus lay in Vines v Djordjevitch (1955) 91 CLR 512 (Vines) (a case involving statutory rights), Dixon CJ at 519 distinguished between “the complete factual situation which must be found to exist before anybody obtains a right or incurs a liability” on the one hand, and “special grounds of excuse, justification or exculpation depending upon new or additional facts” on the other.
The applicants’ argument proceeds by the following steps.
(a)To establish their cause of action in contract, they must prove that there was a termination of the contract.
(b)Termination of the contract, prima facie, constitutes a breach amounting to repudiation.
(c)If termination is established (and in the present case termination is admitted), it is up to the respondent to prove that the termination was justified, and therefore that there was no breach of contract.
It is useful to recall some basic aspects of the law of contract and its terminology.
(a)A party may become entitled to terminate both parties’ obligations to perform a contract on the grounds that the other party has breached or repudiated it. In addition, the contract itself may contain provision for a party to terminate it.
(b)“Repudiation” commonly refers to showing an absence of readiness, willingness or ability to perform the contract at the time when performance is required. A closely related concept is anticipatory breach, where, at a time before performance is required, the promisor shows an absence of readiness, willingness or ability to perform when the time for performance arises.
(c)In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; 233 CLR 115 at [44] (Sanpine) Gleeson, CJ, Gummow, Heydon and Crennan JJ observed that “repudiation” can be used in different senses. One sense of the term involves any breach of the contract that justifies termination. That sense need not be explored for present purposes. The meaning of “repudiation” that is relevant here is evincing an unreadiness, unwillingness or inability of the promisor to perform its obligations. This, as their Honours said, may be termed “renunciation”.
The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.
(d)Repudiation does not bring the rights and obligations under the contract to an end. That happens, and the promisee may sue for damages, when the promisee decides to terminate the contract by accepting the repudiation (see, eg, JD Heydon, Heydon on Contract (Thomson Reuters, 2019) at [24.310]).
Reduced to its essentials, the applicants’ case is that Channel 9 “repudiated” the Services Agreement (SOC [20]) and that the applicants accepted the repudiation (SOC [21]). In conventional parlance, that acceptance terminated the Services Agreement. However, it is alleged earlier at SOC [15] that Channel 9 “terminated” the Agreement. “Terminate” usually means effectively bringing something to an end, and this may be why Channel 9 was content to admit the allegation. In context, however, the applicants must be taken to be alleging that Channel 9 purported to terminate the Services Agreement; and this, because there were no grounds for termination pursuant to the relevant clause, (SOC [16]), constitutes the “breach” which amounts to “repudiation” (SOC [20]). In the applicants’ pleaded case, therefore, there is a purported termination by Channel 9 (wrongly invoking an express contractual power to terminate), followed by a lawful termination by the applicants. Prima facie at least, the ineffectiveness of Channel 9’s purported termination is an essential aspect of the applicants’ case and thus something that they must prove.
It has been observed that “[a] very common form of repudiation is an invalid termination of the contract” (Heydon at [24.380]). That can be accepted, although the only authority cited (Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444 at 453 (Barwick CJ) (Ogle)) is one in which the defendant contended that a purported termination by the plaintiff was itself a repudiation because it was not properly founded. In the present case, by its termination letter on 4 January 2022 Channel 9 made clear that it no longer considered itself bound by the Services Agreement. If Channel 9 did not have power to terminate under the terms of the Agreement, its attempt to do so amounted (using the terminology of Sanpine) to renunciation.
Authorities
Reference was made in argument to the judgment at first instance in Sanpine: Sanpine Pty Ltd v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365 (Sanpine NSWSC). That judgment involved the determination of a preliminary question concerning whether a joint venture agreement remained on foot. After a long history of problems and disagreements, the agreement was purportedly terminated by the external administrator appointed to manage the affairs of the first defendant. The administrator wrote a letter to the plaintiff stating, as the first defendant’s position, that the plaintiff had repudiated the agreement by breaching it in various ways and the first defendant accepted that repudiation (at [164]). The plaintiff sought a declaration that the agreement was still on foot; orders restraining the defendants from entering into any agreement with other parties; and damages.
On the hearing of the preliminary question before Campbell J, the plaintiff argued that the defendants bore the onus of proving that the agreement had been effectively terminated. The defendants argued to the contrary. His Honour upheld the plaintiff’s contention (at [185]). This was in circumstances where the plaintiff’s case was that the contract was still in effect, and the relief it sought was to vindicate that position. All that the plaintiff needed to prove, in his Honour’s view, was that the contract had been entered into and its terms had not brought it to an end through the effluxion of time (at [181]).
His Honour had earlier referred to cases holding that a party who alleges that a contract has been terminated must justify the termination (at [172]–[175]) and to the principle (expressed in Massoud v NRMA Insurance Ltd(1995) 62 NSWLR 657, 659; 8 ANZ Insurance Cases 61-257, at 75,876-75,877) that “a party who seeks relief has the burden of satisfying the Court of facts which (in the absence of proof of other facts) would justify the grant of that relief”.
In the present case, there is no issue between the parties as to whether their contract has been terminated. The applicants expressly allege that the Services Agreement was terminated by them, and rely on conduct of Channel 9 as the basis for their entitlement to do so. Each of those steps needs to be made out in order to establish entitlement to the relief—damages for breach of contract—that is sought. Simply proving that the Services Agreement had been (purportedly) “terminated” by Channel 9 would not, in the absence of proof of other facts, establish that the purported termination involved a breach entitling the applicants to terminate or otherwise sounding in damages. A necessary element of the applicants’ claim for relief is that Channel 9 did not succeed in bringing the Services Agreement to an end in accordance with its terms; that is, that Channel 9 did not have a valid ground for termination pursuant to cl 9.1. As Campbell J observed in Sanpine NSWSC at [171]:
In a civil suit the onus lies on the plaintiff to prove all facts which are an essential part of its cause of action, or in some other way an essential part of its case. Thus, in a civil suit in which it is part of the cause of action on which the plaintiff sues, or in some other way an essential part of the plaintiff’s case, to establish a negative proposition, the onus lies on the plaintiff of proving that proposition.
See also White v Johnston [2015] NSWCA 18; 87 NSWLR 779 at [108] (Leeming JA).
Another way of articulating the difference between the present case and Sanpine is that, whereas in that case the plaintiff alleged the existence of a contractual relationship (and it was up to the defendants, if they relied on the contract having come to an end by termination, to prove it), here the applicants allege that the contractual relationship has come to an end in a particular way (repudiation followed by acceptance). In order to prove that Channel 9’s purported termination amounted to repudiation, they must show that Channel 9 did not have power to terminate.
The applicants also referred to various authorities in respect of contracts of employment where it has been held that, if wrongful dismissal is alleged, the employer bears the onus of proving that dismissal was justified. Examples are Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 83 (Dixon and McTiernan JJ) (Blyth Chemicals); North v Television Corporation Ltd (1976) 11 ALR 599 at 603 (Smithers and Evatt JJ) (North); and Pastrycooks Employees, Biscuit Makers Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 at 83–84 (Hungerford J) (Gartrell White).
In Blyth Chemicals the proposition was simply stated without explanation. In North it followed from the construction of the relevant award, which created a duty not to terminate employment without notice subject to an “exception” in the case of misconduct. Their Honours applied the following statement by Dixon J (as his Honour then was) in Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635 at 643 (Jacobsen) (a statement which aligns closely with what his Honour said later in Vines, above):
For the burden of proof is a legal consequence of the nature of the qualification placed by the words ‘without his own default or wilful act’ upon the general conditions of liability stated in the clause. If these words are but part of the legislative attempt to define the conditions upon which the worker’s right to compensation arises, then like all other ingredients or elements in a cause of action or title to claim, proof of the fulfillment of the conditions they describe must lie with the claimant. But if the true nature of the qualification is to introduce new matter, not as part of the primary grounds of liability, but as a special exception or condition defeating or answering liability otherwise existing, then the onus of proof lies with the party setting up default or wilful act by way of answer.
Gartrell White was a decision of the New South Wales Industrial Commission. The relevant passage refers to circumstances where an allegation of misconduct is “raised as a defence or as justification for a particular course of action by an employer, such as in summarily dismissing an employee”. Reference was also made to Jacobsen, and Hungerford J went on to explain that (at 84):
The right of an employer to summarily dismiss an employee without notice is qualified by the employee inter alia having committed an act of misconduct; thus, to be able to rely upon the right, and to pay the employee up to the time of dismissal only rather than terminate by notice or payment in lieu of notice, the employer must not only allege misconduct but must also prove it.
Accordingly, to the extent that this principle is explained in the employment law cases to which reference has been made, it arises from the employer’s right to dismiss an employee summarily for misconduct being a distinct exception from or qualification on the employee’s right to a period of notice. Thus, misconduct is a “defence” in the sense referred to in Currie; something which avoids liability even if the elements of the cause of action are made out. In the present case, as I have endeavoured to explain above, there is no basis for an award of damages unless the purported termination of the Services Agreement—which constitutes the entirety of the alleged breach about which complaint is made—was unauthorised. The existence of authority to terminate under cl 9.1 thus amounts to a negation of an element of the claim, not an exception or qualification. The employment law cases do not assist the applicants.
It is appropriate to note that Channel 9 does not rely on authority suggesting that a purported termination which is based on a mistaken but bona fide understanding of the legal position does not constitute repudiation (see the cases cited in Heydon at [24.390]).
Commentary
There are also statements by commentators which at first blush appear to suggest that the party alleged to have repudiated a contract bears an onus of proof.
Heydon, at [24.290], asserts that “[the] onus of proving that the promisor was ready, willing and able rests on the promisor”. Whether that is universally correct is not clear; the authority cited (Foran v Wight (1989) 168 CLR 385 at 393 (Mason CJ)) was a case where the party alleged to have repudiated the contract was the plaintiff. The older authority cited by Mason CJ in that case affirms that, in principle, the plaintiff in any contract case needs to be ready to prove (if it is put in issue) that it was ready, willing and able to perform the contract. In any event, there is no issue in the present case as to whether Channel 9 was ready, willing and able to perform its obligations under the Services Agreement. The termination letter announced that it was not willing to perform, and it has not sought to resile from that position. The contested issues lie elsewhere.
Meanwhile, JW Carter, Carter’s Breach of Contract (2018, 2nd ed, LexisNexis Butterworths) at [8-25] asserts:
If the promisee breaches the contract prior to the promisor’s alleged wrongful termination, what appears to be a wrongful termination may be an effective termination. In other words, even though the promisor did not purport to rely on the promisee’s breach its conduct may be characterised as a valid election to terminate. Of course, the burden is on the promisor to show that it was entitled to terminate at the time of the alleged wrongful termination. The ordinary rules apply. Therefore, a promisor must establish a sufficient prior breach or a repudiation. In relation to the latter, merely putting the readiness and willingness of the promisee in issue is insufficient: the promisor must prove an entitlement to terminate.
The only authority cited for the proposition that the promisor must show that it was entitled to terminate is paragraph [3-05] of the same work, which says:
Article 3.3 — onus of proving right to terminate.
The onus of proving the existence of a right to terminate the performance of a contract rests on the party so alleging.
The question of who bears the onus of proving the existence of a right to terminate the performance of a contract is strictly one of construction. However, the default rule is that the onus rests with the promisee, as the party who alleges an entitlement to terminate the performance of the contract.
In practice, the default rule is almost invariably applicable.
In this context, the passage quoted above from [8-25] appears to deal with quite a specific situation: where a contractual termination, alleged to be wrongful, is potentially justified by an earlier breach or repudiation by the party now alleging wrongfulness.
In the present case both the applicants and Channel 9 can be said to be alleging an entitlement to terminate the Services Agreement. However, it is the applicants (as “promisees”) who allege that entitlement as the foundation of a claim for relief and who therefore must prove their entitlement. That involves proving that Channel 9 had repudiated or otherwise breached the Services Agreement. The “default rule”, at least, therefore requires them to prove that Channel 9’s purported termination of the Services Agreement was not authorised.
Conclusions on onus
The onus lies on the applicants to prove that the power to terminate the Services Agreement under cl 9.1 did not arise.
SOC [16] is therefore not (as the applicants’ written submissions suggested) an unnecessary allegation. It is central to the case that the applicants must establish, because the foundation for their asserted entitlement to terminate (and seek damages) is not the mere occurrence of Channel 9’s purported termination but its wrongfulness.
It is appropriate, however, to note a further point concerning SOC [16]. It is a completely general and unparticularised allegation that Channel 9 did not have any grounds or basis to terminate the Services Agreement. SOC [17]–[19], which make more specific allegations that particular aspects of cl 9.1 were not engaged, are expressed not to limit SOC [16]. No application was made to strike out SOC [16] or to require further and better particulars in order to narrow the applicants’ case. Holding the applicants strictly to their pleaded case does not greatly assist Channel 9, in circumstances where the pleaded case in its terms encompasses any argument that might be thought of to the effect that the power to terminate in cl 9.1 did not arise. Consequently, where evidence adduced by the applicants was objected to at the hearing on the ground that it did not go to the issues raised by SOC [17], I have determined that that evidence should be admitted.
Clause 9.1(a): disobedience of a lawful direction
By the terms of its Defence Channel 9 relies on what it says were five directions. These were:
(a)a direction to staff and contractors on 14 October 2021 by email, including to the applicants, to provide evidence of their vaccination status by entering their status in an online portal (the first direction) (Defence [11.3]);
(b)advice by email on 15 October 2021 to staff and contractors, including the applicants, that from 1 December 2021 staff, contractors and visitors would be required to be fully vaccinated in order to enter any Channel 9 premises (the second direction) (Defence [11.4]);
(c)circulation of the Condition of Entry Policy by email to staff and contractors, including the applicants, on 8 November 2021 (the third direction) (Defence [11.8]);
(d)an email to the applicants on 15 November 2021 reiterating the direction given on 14 October (the fourth direction) (Defence [11.11]); and
(e)a letter to the applicants dated 1 December 2021 which reiterated the advice given on 15 October and directed them to provide further information on Mr Tredrea’s vaccination status including any valid medical exemption (the fifth direction) (Defence [11.14]).
It is not in doubt that each of these communications occurred.
First direction
The email containing the first direction said, relevantly:
To ensure the safety of our people and the continuity of our business, we are asking all employees to provide evidence of their vaccination status prior to their return to the workplace (which will be at different stages depending on your location, as per our roadmap).
This passage was expressly directed only to “employees”, but no point was taken about this. Read literally, it was a request rather than an instruction. However, viewed in the context of the relationship between Channel 9 and its employees and contractors, I think it is properly understood as a direction to all of those persons to provide Channel 9 with evidence of their vaccination status. This direction did not extend to how this evidence was to be provided, although the email drew attention to the online portal that had been created for that purpose.
The email informed its recipients that Channel 9 had created a “Vaccination Status Portal” (the Portal) and explained what information it would collect. The information included confirmation of receipt of a vaccination (with the date and the brand of vaccine received). It also included:
Opportunity to state that you will not be vaccinated (if you select this, please ensure that you have had a conversation with your manager and engaged People and Culture to work through the appropriate medical exemption paperwork).
The direction required evidence of vaccination status to be provided by staff “prior to their return to the workplace”. There is no evidence of staff at Channel 9’s newsroom in Adelaide having been required to work from home at the time of the first direction and I infer that Mr Tredrea was therefore attending his workplace on each working day. According to its terms, therefore, the first direction required him to provide evidence of his vaccination status before he next attended work.
In any event, the deadline for compliance with the first direction does not need to be conclusively established. It is not in contest that Mr Tredrea did not provide Channel 9 with evidence of his vaccination status at any time up to the termination of the Services Agreement. It is also not in doubt that, in a conversation with Mr Pudney on 12 November 2021, Mr Tredrea expressed opposition both to being vaccinated against COVID-19 and to entering any information on the Portal.
Mr Pudney gave evidence that 17 November 2021 was the deadline for staff and contractors to provide the information called for by the direction (although it is not clear when or how that deadline was communicated). He mentioned this deadline in the discussion that he had with Mr Tredrea on 12 November. In an email on 17 November, Mr Tredrea confirmed that he had not entered his vaccination status on the Portal and said that he was concerned about his confidential medical information.
His evidence was that he did not agree to enter private medical information on the Portal because he was concerned about the security of the information in the wake of a cyber attack suffered by Channel 9 some months earlier. He maintained this position in cross-examination, while accepting that he did not know whether the security of any of Channel 9’s records had been compromised. He also accepted that his reticence about disclosing information arose from wanting to see his doctor before saying anything, and that he might have said words attributed to him by Mr Pudney to the effect that he had been advised to say nothing until asked. There is no suggestion that he agreed to provide the information sought by Channel 9 in any other way. I find that, while Mr Tredrea might have had some concerns about the security of information provided online, his position on 12 November was motivated by an objection to being vaccinated against COVID-19 and a desire not to communicate this position in any formal way to Channel 9. In any event he was refusing to comply, and never did comply, with the first direction.
The second direction
The second direction was contained in an email to all Adelaide staff sent on 15 October 2021, the day after the email containing the first direction. It said (relevantly):
In line with recent communications about Nine’s proposed COVID Vaccination Strategy, from December 1 it will be a requirement for all staff, contractors and visitors to be fully vaccinated in order to enter any of the Nine sites nationally.
Yesterday you would have received an email from ‘Nine Communications’ on 'How to let us know about your vaccination status'. To make this process as simple as possible, Nine has created a ‘Vaccination Status Portal’, which allows you to enter the details of your vaccination, or medical exemption (if applicable).
Once you enter your details, you will receive a notification that an authentication email has been sent to your leader, asking them to verify that they have sighted your vaccination certificate.
Please do not email or text a screen shot of your vaccination certificate, as we do not need to retain this medical information.
If you are still considering if vaccination is right for you, I encourage you to speak to your GP about your concerns/personal circumstances. Please reach out to your leader, People and Culture Team ([email protected]) or the Health and Safety team ([email protected]) with any further questions you may have or about how this may impact your role.
(Emphasis in original.)
The fourth paragraph of this extract casts further doubt on Mr Tredrea’s explanation for his unwillingness to comply with the first direction. It suggests that Channel 9 was not proposing to collect and retain any confidential medical information through the Portal.
The expression “direction” in cl 9.1(a) must be taken to mean an authoritative instruction. The first paragraph of the email of 15 October 2021 notified staff of a condition that was to be imposed in around six weeks’ time on entry to Channel 9 premises. That may be understood as a direction not to enter those premises unless vaccinated, which was to come into force on 1 December. Read with the fifth paragraph of the extract, this was clearly not a direction purporting, by its own force, to require staff to become vaccinated. It clearly envisaged that some staff would have concerns about vaccination and signalled a willingness to discuss whether that position could be reconciled with the requirements of their work.
For a worker whose role inevitably required them to be on site (such as a security guard or, at least arguably, a studio presenter like Mr Tredrea), the practical difference between a direction to be vaccinated and a condition of access to the workplace based on vaccination status might well have been a subtle one. Not being vaccinated would result in inability to perform their work and thus, potentially, termination of their employment or contract for services. However, I do not think it follows that the expression “direction” in cl 9.1(a) should be read in an extended sense so as to include creation of a practical imperative to do something. Disobedience of a “direction” was, per se, a ground for termination under cl 9; and the term therefore should not be read expansively. If Channel 9 chose to make it impossible for a worker to perform their work, and then terminate the relationship on the ground that work was not being performed, this would not entail termination for disobedience; it would need to be justified on other grounds.
To the extent that the second direction involved a direction to staff and contractors not to enter Channel 9’s premises on and after 1 December 2021 unless they had been vaccinated (or exempted from vaccination), it was reinforced on the evening of 30 November when Mr Pudney gave Mr Tredrea an oral direction not to come in to work the next day because he had not complied with the Condition of Entry Policy. Mr Tredrea complied with that oral direction (and also with the second direction, as I read it). He did not enter Channel 9’s office again.
The third direction (the Condition of Entry Policy)
The Condition of Entry Policy was circulated to all staff and contractors under cover of an email from Ms Vanessa Morley (Director, People and Culture) on 8 November 2021. The email said that the Policy would come into force on 1 December 2021.
A document entitled “FAQ on Nine’s Workplace Condition of Entry COVID 19 Policy”, circulated by way of the same email, said (relevantly):
• Can Nine compel me to be vaccinated against COVID-19?
While Nine strongly encourages all our people to be vaccinated against COVID-19, it is ultimately a personal choice.
We are committed to protecting the health and safety of our people, and at this stage we consider it a reasonably practicable safety measure that our people must be vaccinated against COVID-19 before attending any of Nine’s premises.
• Can I decide not to be vaccinated and still be able to work?
Please contact your manager and People & Culture if you have any questions about your personal vaccination circumstances. They will be able to discuss the impacts based on the state or territory in which you work, any Public Health Orders in place, as well as the inherent requirements of your role and our legal obligations to protect the health and safety of our people.
If you are in a role which Nine determines can be performed remotely, you will be able to do so until further notice (whether vaccinated or unvaccinated). Please speak with your manager about these arrangements.
As the COVID-19 situation is rapidly evolving, we cannot make any long-term commitments about the duration of any arrangements or Nine’s requirements to attend the office in the future.
The policy document itself said (relevantly):
a. Vaccination
There is already a requirement that many of our employees and contractors are fully vaccinated against COVID-19 in order to perform their work in line with applicable Public Health Orders.
In accordance with public health advice and as an integral part of our health and safety control measures, we strongly encourage all employees and contractors to get vaccinated against COVID-19 (two doses of a Therapeutic Goods Administration approved COVID-19 vaccine and any booster in line with the Department of Health's COVID-19 Vaccination Policy) where it is safe to do so in individual circumstances and on advice from a medical practitioner.
Nine will provide special vaccination leave to make it easier for you to attend a vaccination appointment within work hours.
At this stage, employees whose roles are able to be performed solely from home will continue to be able to do so regardless of your vaccination status, provided you continue to meet the requirements of your role satisfactorily as approved by your manager.
b. Attendance at Nine premises and other places where work related duties are carried out
From 1 December 2021 and until further notice, in order to attend a Nine Workplace, or work in the field (for example, journalists), including Nine work and social events, all employees and contractors will be required to be fully vaccinated against COVID-19 and be able to show proof of their vaccination status (see "Proof of vaccination status" section below). Nine will maintain a list of employees and contractors who are approved for attendance at Nine Workplaces in accordance with the "Proof of vaccination status" section below.
c. Proof of vaccination status
If you intend on attending any Nine Workplace, you will be requested to provide proof of your COVID-19 vaccination status via the secure Vaccination Status Portal. You may also provide evidence of your COVID-19 vaccination status, or an Australian Government approved medical exemption, to your manager at any time via the secure Vaccination Status Portal. Your vaccination status will be kept confidential on your employee file and in accordance with our Privacy Policy.
d. Medical exemptions
Nine will work with any employee or contractor who has a Medical Exemption and will endeavour to make necessary adjustments where it is reasonable to do so, to protect their health and safety whilst at work. This may, or may not, include providing access to a Nine Workplace.
The Policy defined “fully vaccinated” to mean “where your Australian Government Digital COVID-19 Certificate confirms you are fully vaccinated” and “medical exemption” to mean “where your Australian Government Digital COVID-19 Certificate confirms you have a medical exemption”.
The following features of this regime should be noted.
(a)Channel 9 “strongly encouraged” its workers to be vaccinated but accepted that this was a “personal choice”.
(b)Channel 9 was content for its workers who were not vaccinated to work from home to the extent that their roles were able to be performed in that manner.
(c)In order to enter Channel 9 workplaces or work in the field, employees and contractors would be required to (i) be “fully vaccinated” and (ii) provide proof of their vaccination status.
(d)Channel 9 would “endeavour to make reasonable adjustments” for persons with “medical exemptions” from vaccination, but was not making any promises as to whether they could attend its workplaces.
The Condition of Entry Policy did not purport to enact rules, binding on employees or contractors, breach of which would have specific legal consequences. Rather, it set out a framework (albeit a prescriptive one in most respects) within which future decisions or actions would be taken: for example, “employees and contractors will be required to be fully vaccinated” and “you will be requested to provide proof of your COVID-19 vaccination status”. I do not regard its language as purporting to give an authoritative instruction to persons in the position of Mr Tredrea. To the extent that it gave any such instruction, that instruction was not to enter a Channel 9 workplace, or undertake work “in the field”, without being “fully vaccinated” and providing confirmation to that effect. As noted above, Mr Tredrea did not attend Channel 9’s premises on or after 1 December 2021, when the Policy came into effect. He did not breach any “direction” contained in the Policy.
The fourth direction
The fourth direction, according to Channel 9’s pleading, was contained in an email sent on 15 November 2021. The only email of which there is evidence, sent from Channel 9 to the applicants on that day, is an email from Mr Pudney to Mr Tredrea following up on a discussion between them earlier on the same day. The discussion focused on medical exemptions from the Condition of Entry Policy and Mr Pudney explained advice he had received, to the effect that a note which Mr Tredrea had obtained from his general practitioner did not meet the criterion in the Policy. Mr Pudney’s email provided a link to some information on the Services Australia website. It concluded:
Please also keep in mind my request to enter your vaccination status in the portal by Wednesday.
As I said, I’m happy to chat whenever you need – and if you need time for any appointments I’m happy to assist with this also.
This was a reference to the conversation between the two men on 12 November 2021 (discussed above) and a reminder of the deadline for compliance with the first direction that had been conveyed on that occasion. As noted above, Mr Tredrea never complied with the first direction. I do not regard the fourth direction as adding anything to it.
The fifth direction
The letter containing the fifth direction was headed “Opportunity to show cause”. It was in part a response to an email sent by Mr Tredrea the previous day in which he took issue with the Condition of Entry Policy, raised concerns about the safety of the Provisionally Approved Vaccines and their ability to prevent infection, and suggested that there had been some confusion concerning the policy in relation to exemptions. He suggested that during an impending period of leave he would be able to obtain a medical exemption and sought the opportunity to talk through options if that was unsuccessful.
Under the heading “your requests and next steps” Channel 9’s letter said, in part:
Secondly, while we respect Warren’s personal choice in relation to COVID-19 vaccination, based on the information currently available to us we consider that from 1 December 2021 onwards you will be unable to discharge your obligations under the Services Agreement dated 31 August 2020 between Channel Nine South Australia Pty Limited, the Warren Tredrea Trust and Warren Tredrea (Contract).
This is because Warren has not provided Nine with evidence that he is fully vaccinated against COVID-19 or that he has a valid Medical Exemption. As a result, Warren will be unable to attend Nine Premises or work in the field in a manner that complies with the Policy.
If Warren seeks to continue to provide services pursuant to the Contract, we reiterate our direction that you are required to provide Nine with such evidence. You are required to do so by no later than 12pm on 3 December 2021. In the interim, you are directed that Warren is not required to provide any services.
If you say that you require additional time in order to provide Nine with evidence of Warren’s valid Medical Exemption, please let us know how much time you consider that you require and we will consider your request.
If you do not comply with this direction and/or maintain your position that Warren will not be vaccinated against COVID-19 (in the absence of a valid Medical Exemption), we will have no choice but to consider terminating the Contract, in accordance with clause 9 of the Contract.
Before making a final decision, we also invite you to provide any further relevant information you would like us to consider. This can be done in writing by email to Joanne Klados at [email protected] by no later than 12pm on 3 December 2021. Alternatively, you may schedule a video conference to provide this information provided the conference is arranged by 12pm on 3 December 2021. You are welcome to bring a support person to any videoconference that may be scheduled.
If you choose not to respond within the time frame outlined above, we will be obliged to make our final decision in relation to the Contract based on the information that is presently available to us.
What was now being required was not evidence of Mr Tredrea’s “vaccination status” but confirmation that he actually had been vaccinated or had a “valid” medical exemption. However, this was not put in the form of a “direction” in the sense discussed above. Rather, Channel 9 was outlining its position that Mr Tredrea would not be allowed to attend its premises unless he was vaccinated; and, because (as explained earlier in the letter) being in the studio was essential to the performance of his role, he would not be able to discharge his obligations under the Services Agreement in these circumstances. Unless this situation was remedied, Channel 9 would consider terminating the Services Agreement. The only explicit “direction” was that Mr Tredrea was, on an interim basis, not required to provide any services.
The deadline stated in the letter of 1 December 2021 for Mr Tredrea to provide evidence that he was vaccinated or had a valid medical exemption was 3 December 2021. On the morning of that day Mr Pudney sent an email to Mr Tredrea and his solicitor, referring to earlier discussions and confirming Channel 9’s agreement to Mr Tredrea taking leave until 4 January 2022 in order to allow him time to obtain the evidence that Channel 9 required. He said that if a medical exemption was obtained, a further assessment would be needed concerning whether reasonable adjustments could be made to allow Mr Tredrea to attend Channel 9’s premises. He also said that Channel 9 would make a decision concerning the future of the Services Agreement on or around 4 January 2022.
As noted earlier, 4 January 2022 was the date on which Channel 9 wrote to the applicants terminating the Services Agreement.
Mr Tredrea’s non-compliance with directions
For Mr Tredrea to express his view about the safety and efficacy of the Provisionally Approved Vaccines and the merits of requiring people to be vaccinated in order to attend work or other places was not “serious misconduct”. This is the case even if those opinions were not particularly well informed and some of Mr Tredrea’s arguments were not soundly based. The views that he expressed were seemingly genuinely held. His expression of them was not shocking or obscene and did not advocate violence.
Clause 9.1(b) was not engaged by the Radio 5AA comments, although it was engaged by other matters as outlined at [139] above.
Clause 9.1(c): breach of a material provision of the agreement
Channel 9 pleads in Defence [16.3] that the applicants breached material provisions of the Services Agreement in that Mr Tredrea:
(a)failed to comply with reasonable directions as required by cl 3.11; and
(b)failed to comply with Channel 9’s policies and procedures as required by cl 3.13, in that he did not comply with the Condition of Entry Policy.
Reasonable directions
The first point does not add anything of substance to the issues discussed above in connection with cl 9.1(a).
(a)I have concluded that Mr Tredrea failed to comply with the first direction and that this engaged cl 9.1(a). If (as I have also concluded) the first direction was a “reasonable” direction, this failure involved a breach of cl 3.11 and therefore engaged cl 9.1(c) as well.
(b)I have concluded above that the second to fifth directions were not “directions” within the meaning of that expression in cl 9.1(a) and in any event there was no failure to comply with them. However, if I am wrong about that—and the Condition of Entry Policy is properly characterised as a “direction” to Mr Tredrea to get vaccinated for COVID-19, which he did not do—I have also concluded that that direction was a reasonable one. On that basis, it was a direction with which cl 3.11 required Mr Tredrea to comply; and his non-compliance engaged cl 9.1(c) as well as cl 9.1(a).
Policies and procedures
Clause 3.13, in conjunction with cl 9.1(c), made Channel 9’s “policies and procedures” binding on Mr Tredrea in that the Services Agreement could be terminated without notice if he did not comply with the policies and procedures that were relevant to him. Read according to their terms, these provisions gave Channel 9 an extraordinary level of power because it could dictate the contents of its policies and procedures. On their proper construction, therefore, these provisions may be subject to some implicit limitations. For example, it might be found that the power to terminate did not arise as a result of breaches of policy or procedure that were de minimis or did not have a bearing on the provision of services by Mr Tredrea.
The “policy” that is potentially relevant here is the Condition of Entry Policy. Channel 9 alleges a breach of that policy by Mr Tredrea. As I have concluded above at [77], the better view is that there was no such breach: Mr Tredrea did not attempt to enter any Channel 9 workplace after the Policy came into effect.
The alternative reading of the Condition of Entry Policy is that any employee or contractor whose duties required them to be in the workplace should be vaccinated for COVID-19, at least if they did not have a medical exemption. It was faintly suggested that Mr Tredrea could perform his role as a presenter from a remote location, but this would plainly have involved significant disruption to the production of news bulletins. A camera crew would have had to be present in the room with Mr Tredrea, raising concerns about COVID-19 infection. Moreover, as Mr Pudney’s evidence explained, interplay between the presenters in the studio is an important aspect of producing a news bulletin that is appealing to viewers and attracts their trust. Mr Tredrea needed to be in the studio to provide the key services for which the Services Agreement provided.
Accordingly, if the Condition of Entry Policy were understood in this way, it would follow that Mr Tredrea did not comply with it. The Condition of Entry Policy, on this reading, was important to the circumstances in which Mr Tredrea’s services were to be provided (and indeed his ability to provide them at all) and the non-compliance was fundamental. On this reading of the Policy, therefore, cl 9.1(c) would provide an additional ground for termination of the Services Agreement.
Clause 9.1(f): failure to observe or perform duties or obligations
Defence [16.4] invokes cl 9.1(f), but only in connection with a failure to comply with lawful and reasonable directions. As pleaded, therefore, Channel 9’s reliance on cl 9.1(f) does not raise any issues that have not been canvassed above. Channel 9’s closing submissions were consistent with this position.
Clause 9.1(h) and (k): conduct which in Channel 9’s opinion could cause material damage to it (or other companies in the Group); damage, in Channel 9’s opinion, to its reputation or that of Mr Tredrea
Channel 9 invokes these subclauses in the following ways (Defence [16.5], [16.6]):
(a)damage to Channel 9’s business interests and reputation from:
(i)Mr Tredrea’s failure to comply with directions;
(ii)the Radio 5AA comments;
(iii)not being able to direct Mr Tredrea to attend briefings such as those held by football clubs; and
(b)damage to the public image or reputation of Mr Tredrea from the same sources.
The argument that Channel 9’s reputation was damaged by Mr Tredrea’s failure to follow directions was not developed in submissions. There was some media commentary in Adelaide when Mr Tredrea began to be absent from evening news bulletins, with speculation that his vaccination stance had led to problems in his relationship with Channel 9. This, however, as discussed below, seems to have been prompted by public comments that Mr Tredrea had made rather than his non-compliance with any directions.
The Radio 5AA comments
The Radio 5AA comments have been set out above.
The statement that Mr Tredrea made on 3 September 2021 prompted at least one caller during a talkback segment later in the program to raise issues concerning vaccine mandates (including requirements for children to be vaccinated against various diseases in order to attend school). This was after one of the hosts of the program had asked Mr Tredrea on air whether he was an “anti vaxxer”, producing a qualified response from him. It was obvious that his comments had touched on issues concerning which some members of the community held strong views.
As noted above, the “Footy Classified” program a few days later drew attention to Mr Tredrea’s comments and made them the subject of strongly adverse commentary. That program is produced in Melbourne and apparently broadcast on Nine stations throughout Australia. One email to the Channel 9 South Australia newsroom from a viewer who had seen the segment, describing the employment by Channel 9 of “anti vaxxers like Warren Tredrea” as “a disgrace”, was in evidence. That, of course, is not necessarily evidence of a view widely held in the community; however, it indicates a basis on which Channel 9 was entitled to be concerned about Mr Tredrea’s comments alienating part of its audience.
At least some other media organisations were aware of the introduction of Channel 9’s Condition of Entry Policy and there was some level of interest in Adelaide media concerning Mr Tredrea’s position. On 1 December 2021, the day the Policy was due to come into operation, an article appeared on the Adelaide Advertiser’s website entitled “Will Warren Tredrea be a no-show at the Nine News desk tonight over station’s new Covid-19 vaccination policy”. This article was noticed by a Channel 9 employee, who sent a link to it to other employees including Mr Pudney. The next day, after Mr Tredrea had not appeared on Channel 9’s evening news bulletin, a further article appeared in the Advertiser entitled “Warren Tredrea and Nine News in crisis talks over station’s new Covid-19 vaccination policy”. The article referred to and quoted from earlier comments by Mr Tredrea including the Radio 5AA comments. That article garnered some negative comments from readers, which were circulated within Channel 9. An internal assessment by Channel 9 concluded: “90% supportive of our decision and 5% are absolutely scathing towards WT”. On the same day, a cartoon appeared in the Advertiser depicting the Channel 9 news desk with a large cartoon image of a germ or virus where Mr Tredrea would normally be seated. Mr Tredrea’s absence from the news desk, on the day Channel 9’s vaccine mandate came into effect, also drew attention on the Daily Mail website.
Mr Tredrea considered that he had been “smeared… as an anti-vaxxer”. He described the Footy Classified item as a “hatchet job”, noting that the program was produced by the Channel 9 group and broadcast on its stations. As to the latter concern, there was no evidence of anyone in Channel 9 having sought the inclusion of this item in order to damage Mr Tredrea. As to the former, it tends to confirm that Mr Tredrea’s public standing and reputation had been damaged as a result of the airing of the Radio 5AA comments. This is also confirmed by evidence that two other entities with which he had commercial relationships (Radio 5AA and Audi) sought to end their associations with him at around this time.
Mr Pudney, who presented as a careful and candid witness, said that he considered terminating the Services Agreement in September 2021 but decided not to do so. He continued to regard the Radio 5AA comments as a potential basis for termination in December 2021 and January 2022. Although there had been no repetition of the conduct by Mr Tredrea, Mr Pudney considered that the comments had “created permanent bruises”. Mr Pudney was at relevant times the News Director of Nine News Adelaide and thus Mr Tredrea’s supervisor. He had had primary carriage on Channel 9’s behalf of the negotiations leading to the execution of the Services Agreement. It was Mr Pudney who signed the termination letter. That letter stated on behalf of Channel 9 the opinion that Mr Tredrea had engaged in conduct which could cause material damage to its reputation and business interests and had damaged Mr Tredrea’s own public image and reputation.
I find that these opinions were held by Channel 9 and, if necessary, there was a reasonable basis for them. So far as the reputation and business interests of Channel 9 were concerned, it was at least awkward for one of its news presenters to have disappeared from his post in circumstances that appeared to have a direct connection with controversial comments that he had made and with responses to one of the most pressing issues facing the Australian community at the time. Further awkwardness arose from the fact that Channel 9 had made a decision to adopt a strong pro-vaccination position and one of its news presenters appeared to be taking a contrary position. This was in addition to the fact that Channel 9 was deprived of Mr Tredrea’s services as a news presenter for so long as the Condition of Entry Policy remained in operation and he refused to be vaccinated. So far as Mr Tredrea’s own public image and reputation were concerned, it was clear that he had made himself a controversial figure whose opinions and conduct were likely to attract strong condemnation from many if not most of Channel 9’s existing and potential viewers.
For these reasons, clause 9.1(h) and (k) were also engaged at the time when Channel 9 decided to terminate the Services Agreement.
REASONABLENESS OF THE DECISION TO TERMINATE
The applicants submitted that, even if one or more of the grounds for termination in cl 9.1 existed, Channel 9’s power to terminate the Services Agreement was to be understood as subject to an implied condition of reasonableness. Reference was made in this connection to Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87; 373 ALR 591 at [154]–[159] (Gleeson JA, Meagher and McCallum JJA agreeing).
The respondents’ first response to this argument is that the actual exercise of the power in cl 9.1 of the Services Agreement is not impugned by the SOC. This is correct. The critical section of the SOC ([16]–[19]) is headed “No grounds to terminate”; and the pleadings contained therein allege the absence of power, not the unreasonable exercise of a power that existed. This was apt to lead Channel 9, in considering what evidence it should lead, to focus on establishing that one or more of the grounds for termination in cl 9.1 existed, rather than the reasoning process leading from the existence of grounds to its decision that termination was warranted.
In any event, the evidence does not show that the decision to terminate the Services Agreement was anything other than a reasonable one, in the sense of a bona fide attempt to protect Channel 9’s legitimate interests in response to the circumstances that had brought cl 9.1 into play. The following points are relevant here:
(a)Channel 9 had a vital interest in its workers being able to continue attending their places of work (or in some States return to work), with minimal risk to those workers and minimal disruption of its operations. One aspect of ensuring minimal risk and disruption was having due regard to the wishes and concerns of the significant majority of the workforce who wanted the people with whom they had contact to be vaccinated. The circumstances of the pandemic had changed to some degree by January 2022 (in that the Omicron variant of COVID-19 was becoming the dominant strain), but this did not affect the nature of the challenge in any fundamental way.
(b)Mr Tredrea had been directed to confirm his vaccination status in mid October 2021 and had not done so by 1 December. He had still not done so in early January 2022 when the decision was made. A natural inference (especially in the light of the Radio 5AA comments) was that he was not vaccinated and had no intention of being vaccinated, but did not wish to confirm that in writing to Channel 9.
(c)Refusal to provide this information undermined Channel 9’s efforts to administer its workplace and its workforce in Adelaide. In view of the Condition of Entry Policy that the Channel 9 group had adopted nationally, all that could be done after 1 December was to instruct Mr Tredrea not to come to the studio, which meant that he could not perform the services for which he had been retained. The position had not changed by 4 January and there was nothing to indicate that it was going to change in the near future.
(d)Following the Radio 5AA comments and the responses that they produced, Mr Tredrea was a controversial figure who was discussed in other media outlets in a manner that was unwelcome to Channel 9. Rather than having the studied neutrality of a newsreader, he was associated in public discourse with an unpopular viewpoint on an issue apt to excite strong emotions. It did not help that the viewpoint with which he was associated was diametrically opposed to the public position of Channel 9 itself.
CONCLUSION ON THE CONTRACT CLAIM
For the reasons explained above, the termination of the Services Agreement by Channel 9 on 4 January 2022 was authorised by cl 9.1 of the Agreement. There was no breach or repudiation of the Services Agreement by Channel 9 and no entitlement to relief arises.
DAMAGES
If the applicants’ contract claim had succeeded, the appropriate remedy would be damages.
The applicants submitted that damages should be assessed in the amount of $1,481,104 on the basis that, if Channel 9 had not terminated the Services Agreement in January 2022, it would have run its course (until November 2022) and there was a “very high probability of continued renewals” of the Agreement. It was submitted (referring to Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101; 233 ALR 687 at [84]–[87]) that it should be inferred that:
(a)each renewal would be for two years;
(b)each renewed contract would involve a small increase in remuneration; and
(c)at each stage there would be a reduction in the probability of renewal, to allow for contingencies and the vicissitudes of life, reducing to a probability of zero at age 55.
The applicants’ calculation involved an 80 percent probability of renewal in August 2022, 65 percent in August 2024, 50 percent in August 2026, 35 percent in August 2028, 20 percent in August 2030 and 5 percent in August 2032. (I infer that August was suggested as the relevant month because the Services Agreement was executed in August 2020, although it came into effect on 1 December.)
Channel 9 contested this assessment on two bases.
Likelihood of renewal
Consideration of the likelihood of further services agreements between Channel 9 and the applicants, for the purpose of assessing damages, involves supposing that Channel 9 did not terminate the Services Agreement in January 2022 (or thereafter) while holding all other facts the same. Thus, the scenario to be considered is that the Services Agreement remained on foot in the following circumstances:
(a)Mr Tredrea had not complied with the direction to inform Channel 9 of his vaccination status, at least up to 4 January 2022. There is no evidence to indicate that he would have remedied this non-compliance, unless he was vaccinated for COVID-19 with a Provisionally Approved Vaccine (which seems very unlikely) or obtained a recognised form of medical exemption (which he had not managed to do, despite insisting that he was making efforts to do so, between October 2021 and January 2022).
(b)Mr Tredrea had taken a public position on the issue of vaccination that was at odds with Channel 9’s public position and its internal policies.
(c)In the aftermath of the Radio 5AA comments, Mr Tredrea was being described (and to some extent ridiculed) as an “anti-vaxxer”. Some viewers thought that his position was reprehensible and thought less of Channel 9 for employing him.
(d)It was at least complicated and expensive, and arguably impossible, for Mr Tredrea to perform his role as a sports news presenter to Channel 9’s satisfaction from a location outside the studio or in a fully “socially distanced” way. His services and his value to Channel 9 were thus severely compromised, if not lost altogether, so long as (i) he remained unvaccinated and (ii) the Channel 9 group continued to require vaccination as a condition of entry to its members’ premises. (The evidence did not show when, if at all, the Channel 9 group relaxed this policy.)
(e)Mr Pudney’s evidence also canvassed his appreciation at the time of the risks associated with Mr Tredrea returning to the newsroom in 2022. It is not clear whether that was a serious prospect in the light of Channel 9’s Condition of Entry Policy. In Mr Pudney’s estimation, Mr Tredrea was more likely to contract COVID-19 than an unvaccinated person (and therefore more likely to infect colleagues and more likely to be away from work). That had the potential to disrupt the operations of the newsroom as well as having an impact on other staff and morale.
(f)There had also been occasions when Mr Tredrea was directed to present news items from other locations, such as sporting venues, in and around Adelaide. Mr Pudney regarded this as a significant aspect of his role. Each of those venues had its own rules and practices relating to access during the COVID-19 pandemic. There was at least scope for doubt as to whether, not being vaccinated against COVID-19, Mr Tredrea would be able to broadcast from these venues.
In addition, Mr Pudney gave evidence (which I accept) that he had had concerns for some time about Mr Tredrea’s performance as a news presenter. In the negotiation of the Services Agreement in 2020, Mr Pudney had driven a hard bargain in terms of the level of remuneration and had treated with equanimity the prospect that this might cause Mr Tredrea to “walk away”. Concerns about his news reading performance—in that he sometimes stumbled in reading a prepared script on air—persisted during the term of the Services Agreement.
In the light of these matters, Mr Pudney’s evidence was that he would “not have supported any extension of [Mr Tredrea’s] services” from later in 2022 when the Services Agreement was due to expire. While that statement involves a degree of speculation, it must be given significant weight. As News Director, Mr Pudney would have had at least an important say in any decision as to whether to acquire Mr Tredrea’s services for a further term. Meanwhile, the other evidence provides strong reasons to infer that any decision maker in late 2022 would have been at least hesitant about renewing the agreement with Mr Tredrea.
I would therefore assess the probability of renewal of the Services Agreement in August 2022, had the Agreement run for its full term, as 30 percent. On that basis, and otherwise accepting the applicants’ general approach, I would assess damages as follows.
However, the point does not end there. It is trite to observe that the purpose of damages for breach of contract is to place the claimant in as near a position as possible to that which they would be in if the contract had been performed. Thus, generally at least, damages are not awarded for not doing that which there was no obligation to do: Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92–93 (Mason CJ and Dawson J) (Amann Aviation). Performance of the Services Agreement would have seen Mr Tredrea remunerated at the agreed rate until November 2022, unless the Agreement was terminated before then with notice under cl 9.2. There was no contractual promise to renew the contract or extend it beyond that time. Loss of a chance to obtain a new contract is thus difficult to fit within the ordinary concept of expectation damages that lies at the heart of the assessment exercise. Nor is it a loss incurred by the applicants in reliance on the expectation that the contract would be performed, a specific expense for which restitution is warranted, or a positive loss occurring as a consequence of breach that calls for indemnity.
Indeed, it has not been established that the prospect of a further contract being entered into following the expiry of the Services Agreement was reduced to any particular degree by the action which (I am assuming in this part of the reasons) constituted the breach. I have concluded above that that prospect was fairly low regardless of Channel 9’s decision to terminate. The termination itself did not in any legal sense prevent a new contract being entered into between the parties at some future time. As a practical matter, the decision to terminate might have affected the parties’ attitudes to each other and thereby made Mr Tredrea less likely to offer his services to Channel 9, or made Channel 9 less likely to be interested in such an offer; however, this is no more than speculation. “Where compensation is sought in respect of the deprivation of a possible benefit which is dependent upon the unrestricted volition of another it may be impossible to say that any assessable loss arises from the breach”: Amann Aviation at 93 (citing Fink v Fink (1946) 74 CLR 127 at 143 per Dixon and McTiernan JJ and Chaplin v Hicks [1911] 2 KB 786 at 792–793 per Vaughan Williams LJ).
For these reasons, I would not include any allowance for potential renewed contracts in the assessment of damages. The upper limit of damages (subject to the issues to be discussed next) is thus the remuneration that Mr Tredrea would have earned during the remaining term of the Services Agreement.
Clause 14.4
Clause 14.4 of the Services Agreement was as follows:
14.4 Limitation on Damages
Any damages to which the Company and the Key Person may be entitled arising out of a breach of any express or implied term of this Agreement:
(a) are not available for personal illness or injury or non-pecuniary loss (including, but not limited to hurt, humiliation, distress and disappointment); and
(b) are limited to the damage which the innocent party would have suffered if the party in breach had, instead of breaching the Agreement, lawfully terminated the Agreement at the earliest possible opportunity; and
(c) will not include any consequential damage, including but not limited to any direct or indirect loss of opportunity to earn remuneration through work in the media industry or in a position substantially similar to the position occupied by the Key Person during the Term.
Channel 9 submits that cl 14.4 is relevant in three ways.
(a)Damages for breach of the Services Agreement are expressly limited to the damage that the applicants would have suffered if, instead of breaching the Agreement, Channel 9 had lawfully terminated it at the earliest possible opportunity.
(b)Clause 14.4 precludes any right to damages beyond the remaining term of the Services Agreement, including any consequential losses.
(c)Clause 14.4 reinforces the principle upon which assessment of contractual damages would normally proceed, that damages are assessed on the basis of what Channel 9 promised to do and no more.
The last of these propositions alludes to what is often termed the principle of least burdensome performance or the minimum obligation rule: see, eg, TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 150, 153–155 per Hope JA; Amann Aviation at 92–93 per Mason CJ and Dawson J. If there are two or more ways in which the defendant might have performed the contract, damages are assessed on the footing that performance would have occurred in the manner least burdensome to the defendant. At least arguably, this principle applies without needing to be incorporated in an express contractual term. In some cases concerning contracts of service it has therefore been held that damages for wrongful termination will only cover lost wages up to the end of the notice period required for lawful dismissal (eg Lavarack v Woods of ColchesterLtd [1967] 1 QB 278 quoted in Berry v CCL Secure Pty Ltd [2020] HCA 27; 271 CLR 151 at [38]). General principle does not take Channel 9 that far in the present case, because the power to terminate with notice under cll 9.2 and 9.3 of the Service Agreement arose only in specific circumstances. I do not accept Channel 9’s submission that Mr Tredrea’s unvaccinated status prevented him from working in a way that engaged cl 9.2.
However, the express exclusion of “consequential damage” by cl 14.4(c) supports the conclusion I have reached above that damages do not lie for the loss of a chance to enter into further contracts. (I reject the applicants’ submission that the example given in cl 14.4(c) shows that the words “consequential damage” have a narrower meaning than “consequential loss” such that the former concept excludes loss of opportunity to renew. The example itself is broad (any loss of opportunity in the media industry or in a position substantially similar to Mr Tredrea’s existing position) and is expressed to be without limitation.)
In addition to excluding consequential damage, cl 14.4(b) limits any potential damages to “the damage which the [applicants] would have suffered if [Channel 9] had, instead of breaching the Agreement, lawfully terminated the Agreement at the earliest possible opportunity”.
Read literally, this provision has anomalous results which the parties to the Services Agreement are unlikely to have intended. Plainly enough, cl 9.1 only supported the lawful termination of the Services Agreement if one of paras (a) to (e) was made out. So too, cl 9.2 did not provide a general power of termination: it applied only in circumstances of illness or incapacity. Clause 9.3 also provided a power to terminate (with notice) in carefully defined circumstances. The earliest possible opportunity for lawful termination is therefore difficult to fix as a hypothetical event. Potentially, no circumstances permitting termination might have arisen during the course of the Services Agreement. Next, the clause according to its terms does not fix a hypothetical set of events as the counterfactual, with which the actual events are compared in order to assess damages. Instead, read literally, it calls for identification of the loss which would have been caused by lawful termination at the earliest opportunity, and fixes that loss as the limit for damages for breach. This makes the limit of damages depend quite fortuitously on when, if at all, lawful termination could have occurred. Whether (for example) cl 9.2 would have been enlivened during the term of the Services Agreement can only be guessed at.
In my view, the only way to give efficacy to cl 14.4(b) is to read it as providing for damages for breach of the Services Agreement to be assessed on the basis that, if the relevant breach had not occurred, the contract would have been lawfully terminated at the first opportunity. That opportunity should be understood to be one arising, counterfactually, under cl 9.2. This is because cl 9.1 permits termination without notice, which would make the quantum of damages zero; and any implied right of termination (which was not explored in the submissions) would involve a reasonable notice period, leading to further indeterminacy in the operation of the clause. Accordingly, the damages to which the applicants are entitled, if the purported termination by Channel 9 on 4 January 2022 constituted a repudiation of the Services Agreement, should be assessed on the basis that, if the repudiation had not occurred, Channel 9 would have (validly) given notice under cl 9.2 on that day. The quantum is therefore the equivalent of one month’s remuneration under the Agreement plus interest.
THE IC ACT CLAIM
The important provisions of the IC Act for present purposes are ss 12, 15 and 16. They provide, relevantly, as follows.
12 Court may review services contract
(1) An application may be made to the Court to review a services contract on either or both of the following grounds:
(a) the contract is unfair;
(b) the contract is harsh.
…
(2) An application under subsection (1) may be made only by a party to the services contract.
(3) In reviewing a services contract, the Court must only have regard to:
(a) the terms of the contract when it was made; and
(b) to the extent that this Part allows the Court to consider other matters —other matters as existing at the time when the contract was made.
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15 Powers of Court
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(3) If the Court forms the opinion that a ground referred to in subsection 12(1) is established in relation to the whole or a part of the services contract, the Court must record its opinion, stating whether the opinion relates to the whole or a specified part of the contract.
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16 Orders that Court may make
(1) If the Court records an opinion under section 15 in relation to a services contract, the Court may make one or more of the following orders in relation to the opinion:
(a) an order setting aside the whole or a part of the contract;
(b) an order varying the contract.
(2) An order may only be made for the purpose of placing the parties to the services contract as nearly as practicable on such a footing that the ground on which the opinion is based no longer applies.
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(4) An order takes effect on the date of the order or a later date specified in the order.
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A “services contract” is defined by s 5(1) as follows:
(1) A services contract is a contract for services:
(a) to which an independent contractor is a party; and
(b) that relates to the performance of work by the independent contractor; and
(c) that has the requisite constitutional connection specified in subsection (2).
The term “independent contractor” is not limited to a natural person (s 4) but is not otherwise defined. The person performing work under the Services Agreement in the present case was Mr Tredrea, and the Services Agreement was therefore a “services contract” as defined on the footing that he was an “independent contractor”. The “constitutional connection” referred to in s 5(1)(c) was satisfied in the present case if Tredders Investments, which was also a party to the Services Agreement, was a “constitutional corporation” (ie, a corporation to which s 51(xx) of the Constitution applied). Having regard to the terms of s 5(2), it was clearly not satisfied on any other basis.
The other provision that should be noted is s 11, which excludes two kinds of “services contract” from the coverage of ss 12-16. One of these is where the “independent contractor” is a body corporate (s 11(1)(b)). However, in the present case, having regard to s 5(1), it appears that it was Mr Tredrea, rather than Tredders Investments, who was the “independent contractor”. I therefore proceed on the basis that the Services Agreement was capable of being reviewed under s 12.
The IC Act claim, as pleaded, is predicated on the Services Agreement having been terminated for non-compliance with a “direction that [Mr Tredrea] be vaccinated”.
(a)The particulars of the allegation that the Services Agreement was unfair or harsh, within the meaning of s 12 of the IC Act (SOC [22]), are limited to a proposition that it was unfair or harsh for the Agreement to have the potential for Channel 9 to give “the Direction”. “The Direction” was defined earlier in the SOC as a direction to the applicants “that, in order for [Mr Tredrea] to attend a site or location where work is being performed … [Mr Tredrea] had to provide evidence to the respondent that he was ‘fully vaccinated against COVID-19’”.
(b)However, the order sought under s 16 of the IC Act (SOC [23]) is an order varying the Services Agreement to the effect that compensation becomes payable to the applicants “if the respondent takes any action to terminate the Services Agreement on the ground that Mr Tredrea failed to comply with a direction that [Mr Tredrea] be vaccinated in a manner akin to the Direction” (emphasis added).
For reasons explained above, the preferable understanding is that there was no “direction”, in the sense used by cl 9.1(a) of the Services Agreement, to be vaccinated, and no lack of compliance by Mr Tredrea with a “direction” that he not attend the workplace if he did not have evidence of being vaccinated. On that understanding, the IC Act claim does not avail the applicants.
Further, even if the Condition of Entry Policy is construed as involving a “direction” with which Mr Tredrea did not comply, other grounds for termination were present, with which the claim does not grapple. In particular:
(a)Mr Tredrea had not complied with the (in my view unexceptionable) direction to inform Channel 9 as to his vaccination status, which engaged cl 9.1(a); and
(b)Channel 9 had formed the opinion that conduct of Mr Tredrea had the potential to damage its reputation and business interests (cl 9.1(h)) and had damaged his own public standing (cl 9.1(k)).
Even if it was harsh or unfair for the Services Agreement to provide for termination on the basis of non-compliance with a direction to be vaccinated for COVID-19, it would be incongruous to amend the Agreement so as to provide for compensation in the event of its termination where the termination was supported by other grounds as well. It would only be appropriate to provide for compensation where the sole ground for termination was non-compliance with the direction being complained of.
The broad terms of the order proposed in the applicants’ closing submissions do not overcome these problems. The proposed order is that the Services Agreement be varied by inserting a further cl 9.4 which would read:
Upon termination hereof, Nine will pay to the Company the sum of $1,481,104, and upon such payment all rights and liabilities of the parties hereto arising pursuant to this contract will be released and discharged.
This proposed new subclause would apply in the event of termination of the Services Agreement on any ground or grounds. It therefore does not accord with the pleaded case. (In other respects, while the form of the proposed order involves some incongruity, it appears to represent an accepted manner of reconciling s 16(4) of the IC Act (which allows orders only with prospective effect) with the acceptance in the case law that a contract that has already ceased to be operative can be the subject of review under the Act. See Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; 207 FCR 298 at [107]-[181] (Besanko, Jagot and Bromberg JJ), especially the reference at [132]-[133] to Buchmueller v Allied Express Transport Pty Ltd [1999] FCA 319; 88 IR 465.)
To the extent that the Services Agreement empowered Channel 9 to give a direction to Mr Tredrea to the effect that he must either obtain vaccination against a novel and highly transmissible virus that had the potential to cause serious illness or not come to work, it was clearly not harsh or unfair. However, as I have emphasised above, if the Condition of Entry Policy is understood in that way, it was not breached by Mr Tredrea and was not one of the grounds that authorised termination of the Services Agreement. No occasion arises to vary the Services Agreement in response to that circumstance.
If the Condition of Entry Policy is construed as involving a direction simply to be vaccinated against COVID-19, it might test the limits of the power to issue directions (under cl 3.11 or implicitly). Instructing an employee or contractor to undergo a medical procedure, as distinct from regulating entry to a workplace, is a strong and arguably extreme measure. (I note, again, that Channel 9 did not assert any power to do this and it is not my understanding of the Condition of Entry Policy.) To the extent that the Services Agreement allowed a direction of that character to be given to Mr Tredrea there might be a substantial argument that it was harsh or unfair and should be varied. However, the case advanced by the applicants seeks to amend the power of termination in cl 9 rather than the power to give directions. If Channel 9 had power to give a particular direction to Mr Tredrea (even one that can be considered draconian), I do not think it was harsh or unfair to permit Channel 9 to terminate the Services Agreement in response to disobedience of that direction.
For all of these reasons, the claim under the IC Act must be rejected.
DISPOSITION
The application must be dismissed.
There is no apparent reason why costs should not follow the event. However, the applicants’ written submissions indicated their desire to be heard on costs. My orders will therefore allow the parties an opportunity to file written submissions should any party seek an alternative order as to costs.
I certify that the preceding two hundred and two (202) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kennett. Associate:
Dated: 14 March 2024
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