Walker v Andrew

Case [2002] NSWCA 214

Reported Decision:

 (2002) 20 ACLC 1476

New South Wales


Court of Appeal

CITATION: WALKER & SHERMAN & ANOR v ANDREW & ORS [2002] NSWCA 214
FILE NUMBER(S): CA 40911/01
HEARING DATE(S): 6 May 2002
JUDGMENT DATE:
19 July 2002

PARTIES :
Peter Walker and Steven Sherman in their capacity as Receivers and Managers of Galaxy Media Pty Limited (Receivers and Managers appointed) (In Liq) & Anor v William Edward Andrew & Ors
JUDGMENT OF: Spigelman CJ at 1; Handley JA at 2; Brownie AJA at 3
LOWER COURT JURISDICTION : Supreme Court - Equity Division
LOWER COURT
FILE NUMBER(S) : 		ED 3491/00
LOWER COURT
JUDICIAL OFFICER :		 Santow J
COUNSEL: Appellants - C R C Newlinds/Ms Jago
Respondents 1 & 2 - G A Seib
Respondents 3,4,7,9 - G C Lindsay SC/
A R Ridley
SOLICITORS: Appellants - Kemp Strang Lawyers
Respondents 1 & 2 - Bowring Stone Lawyers
Respondents 3,4,7,9 - Somerville & Co Solicitors
CATCHWORDS: CONTRACT - employer's bonus scheme - unspecified bonus payable - employer bound to pay reasonable bonus on basis of quantum meruit - CORPORATIONS ACT 2001 - priority creditors - "wages" - employees' bonus - quantum meruit
LEGISLATION CITED: Corporations Act 2001
CASES CITED:
 Secured Income Real Estate (Australia) Pty Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, 607
McGill v National Australia Bank [2001] NSWCA 221
Way v Latilla [1937] 3 All ER 759
Powell v Braun [1954] 1 WLR 401
Woodhouse v ADA Manufacturing Co Ltd [1954] SASR 263
DECISION: Appeal dismissed with costs




                          CA 40911/01
                          ED 3491/00

                          SPIGELMAN CJ
                          HANDLEY JA
                          BROWNIE AJA

                          19 July 2002

Peter WALKER AND ORS v William Edward ANDREW AND ORS



      CONTRACT – employer’s bonus scheme – unspecified bonus payable – employer bound to pay reasonable bonus on basis of quantum meruit

      CORPORATIONS ACT 2001 – priority creditors – “wages” – employees’ bonus – quantum meruit

      The first appellants were receivers and managers of a company appointed by the second appellant. The third to tenth respondents were former employees of the company who had been promised unspecified bonuses by the company whose claims on a quantum meruit basis were allowed by the liquidator. The former employees claimed priority in the receivership on the ground that the bonuses were “wages”. The appellants submitted that the company was under no obligation to pay the bonuses because specific bonus schemes had not been in place.
      HELD: The former employees had no contractual right to bonuses but had been employed on the clear understanding that they would be entitled to remuneration in addition to their salary, and were entitled to reasonable bonuses on a quantum meruit basis. Way v Latilla [1937] 3 All ER 759 (HL) applied. Such bonuses were “wages” as defined by s 9 of the Corporations Act, and the former employees were priority creditors for their bonuses in the receivership.

      ORDERS
      Appeal dismissed with costs.


                          CA 40911/01
                          ED 3491/00

                          SPIGELMAN CJ
                          HANDLEY JA
                          BROWNIE AJA

                          19 July 2002
Peter WALKER AND ORS…

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Details
AGLC
Walker v Andrew [2002] NSWCA 214
Case
[2002] NSWCA 214
Decision Date

CaseChat Overview and Summary

The case of *Walker v Andrew* concerned a dispute between an employee and a company regarding an employer's bonus scheme. The employee sought payment of a bonus that was not specifically quantified in the employment contract. The matter came before the Court of Appeal of New South Wales.

The central legal issues before the court were whether the employer was contractually bound to pay a bonus despite its unspecified nature, and if so, on what basis the quantum of that bonus should be determined. Additionally, the court considered whether such a bonus, if payable on a *quantum meruit* basis, would qualify as "wages" for the purposes of priority under the *Corporations Act 2001* (Cth).

The Court of Appeal held that where an employer promises an unspecified bonus, they are bound to pay a reasonable bonus, which can be assessed on the basis of *quantum meruit*. This principle acknowledges the employer's contractual obligation to reward the employee's efforts. The court further determined that a bonus payable on a *quantum meruit* basis would indeed fall within the definition of "wages" for the purposes of the priority provisions of the *Corporations Act 2001*.

The appeal was dismissed, and the appellant was ordered to pay the costs of the appeal.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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