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Walker v Salomon Smith Barney Securities Pty Ltd

Walker v Salomon Smith Barney Securities Pty Ltd

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Case Copied 10 October 2003 78 min read

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FEDERAL COURT OF AUSTRALIA
David Walker v Salomon Smith Barney Securities Pty Limited & Anor
[2003] FCA 1099
TRADE PRACTICES – misleading and deceptive conduct – negotiations concerning a contract of employment – whether misrepresentations were made – whether the representations were actionable under ss 52 or 53B – whether there were reasonable grounds for future representations – reliance
CONTRACT – whether a valid contract of employment – whether acceptance – whether there was a failure to include an essential term
PRACTICE AND PROCEDURE – failure to discover relevant documents
Federal Court of Australia Act 1976 (Cth), s32
Trade Practices Act 1974 (Cth), ss 51A, 52, 53B, 82(1)
George Hudson Holdings Limited v Rudder (1973) 128 CLR 387 referred to
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 referred to
Jones v Dunkel (1959) 101 CLR 298 referred to
Wardley Australia Limited v State of Western Australia (1992) 175 CLR 514 referred to
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 considered
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 referred to
Fried v Dixie Holdings Pty Ltd [2000] FCA 1048 referred to
Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 22 ALR 621 referred to
Ting v Blanche (1993) 118 ALR 543 considered
Phoenix Court Pty Ltd v Melbourne Central Pty Ltd (1997) ATPR (Digest) ¶46-179 referred to
O’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455 referred to
Stoelwinder v Southern Health Care Network (2000) 177 ALR 501 referred to
Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133 considered
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 applied
Orison Pty Ltd v Strategic Minerals Corporation NL (1987) 77 ALR 141 referred to
Finucane v New South Wales Egg Corporation (1988) 80 ALR 486 considered
Merman Pty Ltd v Cockburn Cement (1988) 84 ALR 521 referred to
Callinan v Gilro-ERG Pty Ltd [1996] FCA 986 referred to
Wright v TNT Australia Pty Ltd (1988) 15 NSWLR 662 distinguished
Wright v TNT Australia Pty Ltd (1988) 15 NSWLR 679 considered
Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389 referred to
McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 referred to
Nagy v Masters Dairy Ltd (1996) 150 ALR 273 referred to
Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 distinguished
Martin v Tasmania Development and Resources (1999) 163 ALR 79 distinguished
Dawson v Australian Consolidated Reserves Pty Ltd (1983) ATPR 40-374 referred to
Thomas v Star Maid International Pty Ltd [1999] FCA 911 referred to
Futuretronics International Pty Ltd Gadzhis [1992] 2 VR 217 referred to
Concrete Constructions Group v Litevale Pty Ltd and Others (2002) ATPR (Digest) 46-224 referred to
Serrata Investments Pty Ltd V Rajane Pty Ltd (1991) 6 WAR 419 referred to
Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 referred to
DAVID WALKER v SALOMON SMITH BARNEY AUSTRALIA SECURITIES PTY…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2003] FCA 1099
Decision Date: 10 OCTOBER 2003

CaseChat Overview and Summary

The case of Walker v Salomon Smith Barney Securities Pty Ltd involved the applicant, Mr Walker, suing the respondents, Salomon Smith Barney Securities Pty Ltd, for damages arising from alleged misrepresentations made during employment negotiations. The matter was heard in the Supreme Court of New South Wales. Mr Walker alleged that during discussions in August 1997, the respondents' representatives made certain representations regarding his potential employment, which induced him to forego a substantial bonus from his previous employer, ABN AMRO. He claimed that these representations were false and that he was induced to join the respondents under false pretenses.

The primary legal issues before the court were whether the respondents had indeed made the alleged misrepresentations and, if so, whether these misrepresentations induced Mr Walker to enter into the employment contract with the respondents under false pretenses. The court had to consider the credibility of the witnesses and the documentary evidence presented, particularly the content and context of the conversations between Mr Walker and the respondents' representatives. The court also had to determine whether Mr Walker's decision to join the respondents was influenced by the alleged misrepresentations and whether these misrepresentations were material to the employment contract.

The court found in favour of Mr Walker, accepting his account of the events and the misrepresentations made by the respondents' representatives. It was determined that Mr Walker was induced to join the respondents under false pretenses, as he had forgone a significant bonus from ABN AMRO based on the representations made by the respondents. The court held that the respondents were liable for the misrepresentations and that Mr Walker was entitled to damages. The court ordered judgment to be entered for Mr Walker against the respondents for damages to be assessed, and outlined a process for the parties to submit written submissions on costs and prepare the matter for a trial on the question of damages.

Orders

Orders of the court

1. Judgment be entered for the applicant against the respondents for damages to be assessed.

2. The respondents file and serve written submissions on costs on or before 4.00 pm on 31 October 2003.

3. The applicant file and serve written submissions in reply on or before 4.00 pm on 7 November 2003.

4. There be a case management conference, at a date to be fixed, before a Registrar to prepare the matter for trial on the question of damages.

Background

Background to the litigation

There was cross-examination of all deponents. the facts of the caseInitial contacts The evidence disclosed that, in August 1997, Ms Lancaster, in her capacity as a personnel consultant, telephoned Mr Walker (with whom she had previous dealings) to ask him whether he would consider taking up employment with NatWest, as a financial analyst covering RTZ. Mr Walker deposed that:I knew that NatWest had a much larger operation in Australia than ABN AMRO … and there were rumours concerning the UK-based parent selling out. I told Ms Lancaster that I was interested in discussing a position. On 5 August 1997, Ms Lancaster sent Mr Walker’s curriculum vitae to Robert Thomas, who was the Managing Director of the Equities Division of NatWest. Mark Fulton, who was at that time Head of Research at NatWest reporting to Mr Thomas, later telephoned Mr Walker. Mr Walker said that Mr Fulton indicated that he was responsible for recruiting equity research analysts for the company. Mr Walker said further in cross-examination that Mr Fulton referred to “the current difficulties of the firm” and stated that he would ask Ms Lancaster to arrange for Mr Walker to meet with Mr Thomas, when Mr Walker was next in Sydney. Mr Fulton deposed that he was unable to recollect this conversation with Mr Walker in August 1997, although he conceded in cross-examination that, in August 1997, he needed to “beef up” the research department, especially in the resources area. I accept Mr Walker’s account of his initial conversations with Ms Lancaster and Mr Fulton in August 1997. I also accept that, as Mr Walker’s counsel pointed out, Mr Walker was not looking for another job in 1997. This fact is relevant when considering the negotiations that followed.The August 1997 meeting On 12 August 1997, Mr Walker met Mr Thomas at Ms Lancaster’s offices in Sydney. Mr Walker said that, during the course of the meeting, which, according to him, lasted no more than 30 minutes, Mr Thomas acknowledged that Ms Lancaster had contacted Mr Walker in relation to a position at NatWest as a mining analyst covering RTZ or, perhaps, BHP, or in some other position. Mr Thomas told Mr Walker that he would like him to have a further meeting with other members in NatWest’s Equity Division to see how he would fit in with them. In his first affidavit, Mr Walker stated that:I also explained to Mr Thomas that I was expecting a substantial bonus from abn amro due to the firm’s participation as a lead broker with the Telstra-1 float, which was payable on 15 January, 1998 and that I was not prepared to forego this amount unless I received compensation from NatWest. I indicated that to receive the bonus I could not resign before 15 January, 1998 and that under my contract with abn amro I would need to give one month’s notice. In cross-examination, Mr Walker maintained that he specifically raised the matter of the abn amro bonus with Mr Thomas at this meeting, saying:If there was a fundamental disagreement at that time, I would not have pursued the potential employment. According to Mr Walker, there was no other discussion at that meeting about the terms of his employment if he were offered a position with NatWest.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

KENNY J

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Ratio Decidendi

Legal Principle Established

Established by: KENNY J

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