FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WINDROSS v TRANSACT COMMUNCATIONS PTY LTD | [2002] FMCA 145 |
Thorpe v Football League [1974] 10 SASR 17
Westen v Union des Assurances de Paris (unreported, Industrial Relations Court of Australia, per Madgwick J, 17 December 1996)
Applicant: | KEVIN WINDROSS |
| Respondent: | TRANSACT COMMUNICATIONS PTY LTD |
| File No: | CZ7 of 2002 |
| Delivered on: | 20 August 2002 |
Delivered at: | Sydney, via videolink to Canberra |
| Hearing Dates: | 16 July & 17 July 2002 |
| Judgment of: | Driver FM |
REPRESENTATION
| Counsel for the Applicant: | Mr W Arthur |
| Solicitors for the Applicant: | Dibbs Barker Gosling |
| Counsel for the Respondent: | Mr C Robinson |
| Solicitors for the Respondent: | Chamberlains Law Firm |
ORDERS
The respondent is to pay the applicant $21,050 as damages for breach of contract, including pre-judgment interest of $1,507 up to and including 23 August 2002.
The sum of $2,493 shall be deducted from the above damages award by the respondent and remitted to the Australian Taxation Office.
The respondent is to pay the applicant’s costs and disbursements of and incidental to the application, in accordance with Schedule 1 to the Federal Magistrates Court Rules 2001 (Cth).
THE COURT CERTIFIES
That for the purposes of the Federal Magistrates Court Rules, it was reasonable for the applicant to employ an advocate for the hearing on 16 and 17 July 2002.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CZ7 of 2002
| KEVIN WINDROSS |
Applicant
And
| TRANSACT COMMUNICATIONS PTY LTD |
Respondent
AMENDED REASONS FOR JUDGMENT
(amended under the slip rule)
Introduction
The applicant is a former contract employee…
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- AGLC
- Windross v Transact Communications Pty Ltd [2002] FMCA 145
- Case
- [2002] FMCA 145
- Decision Date
CaseChat Overview and Summary
The court examined the legal principles surrounding the implication of terms in contracts. It considered whether the contract was silent on the issue of termination and whether the implication of a term would be necessary for the reasonable or effective operation of the contract. The court noted that in the absence of express terms dealing with termination, the law may imply a term to the effect that the contract is terminable by either party upon reasonable notice. However, if the contract already contains express provisions addressing termination, the implication of such a term is generally unnecessary.
The court held that the employment contract in this case contained express provisions regarding termination, specifically allowing either party to end the contract by giving one month's written notice. As the contract was not silent on the issue of termination, and the express terms were sufficient to govern the matter, the court refused to imply an additional term concerning termination on reasonable notice. The court concluded that the law would not imply a term in such circumstances unless expressly excluded by the parties.
The court ordered that the defendant pay the plaintiff $21,050 as damages for breach of contract, including pre-judgment interest up to 23 August 2002. Additionally, the court directed that $2,493 be deducted from the damages award and remitted to the Australian Taxation Office. Finally, the court ordered the defendant to pay the plaintiff's costs and disbursements of and incidental to the application, as per Schedule 1.
Orders
Orders of the court
1.
The respondent is to pay the applicant $21,050 as damages for breach of contract, including pre-judgment interest of $1,507 up to and including 23 August 2002.
2.
The sum of $2,493 shall be deducted from the above damages award by the respondent and remitted to the Australian Taxation Office.
3.
The respondent is to pay the applicant’s costs and disbursements of and incidental to the application, in accordance with Schedule 1 to the
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Mr Robinson submits that Mr Arthur has misconstrued the authorities. He makes the following submissions:As a matter of principle, where a contract is silent as to its duration and the circumstances in which it may be brought to and end by the parties without breach, any action or omission by one party to end the contract, would be repudiatory, giving rise to a right to damages in the other party.Consequently, the courts have implied terms into employment contracts which are silent as to duration and the circumstances in which they may be brought to an end, that they may be brought to an end upon giving reasonable notice, ie without breach.However the law does not imply such a term into all contracts of employment. Nor is it the law that such a term is implied unless expressly excluded, as contended by the applicant.The true position is that the law will imply a term only in the absence of any express provision by the parties to the contract concerning how the contract is to be brought to an end. In New South Wales Cancer Council v. Sarfaty (1992) 28 NSWLR 68 at 74 Gleeson CJ and Handley JA said: It is now well-established that, as a general rule, if the parties to a contract of employment make no provision as to the circumstances in which it may be brought to an end, the law will imply a term to the effect that the contract is terminable by either party upon reasonable notice to the other ...In Sarfaty there was no express term giving either party a right simply to bring the contract to an end on a period of notice, reasonable or otherwise, without cause. The parties had however, turned their minds to the issue of termination. In the contract there were express terms concerning the plaintiff's tenure, and the circumstances in which he could be removed from office. On those facts the Court of Appeal refused to imply the additional term.In Byrne v. Australian National Airlines (1995) 185 CLR 410, the Court considered whether in light of the terms of the prevailing award requiring that termination "not be... unreasonable", there was an implied term to that effect in the employment contracts of the plaintiffs. Brennan CJ, Dawson and Toohey JJ. referred to the tests for implication of a contractual term in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283:(1) [the implication] must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.Their Honours drew a distinction in seeking to identify the intentions of the parties, between formal contracts and those not reduced to writing or only partly so, where greater flexibility was necessary. In the latter situation, with which the Court was faced in Byrne, their Honours referred to, and adopted the test of Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 573 where his Honour said: "... in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties." (my emphasis)Their Honours rejected the implication of the term contended for, as unnecessary to give effective operation to the employment contract. In the course of their judgment their Honours did say:In the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach. (my emphasis).In the recent decision of Australian National Hotels Pty Ltd v Jager [2000] TASSC 43, the Tasmanian Court of Appeal considered the relevant authorities in relation to the implication of a "reasonable notice" term in a contract of employment. In Jager the contract was for an indefinite duration, had no express term as to termination and the employee was paid monthly. Section.47(2)(c) of the Industrial Relations Act 1984 (Tas) provided:...a term or period of service of employment to which this Division applies that is of indefinite duration is terminable by either party by (a) a week's notice, if the wages are payable weekly;....; or (c) a month's notice in any other case.Evans J, delivering the judgment of the Full Court said:It follows from the approach taken by the members of the High Court in Byrne v Australian Airlines Ltd that as s47(2) applies to the parties' contract of employment with the effect that the contract is terminable on one month's notice by either party, there is no opening for the implication of a term as to the giving of reasonable notice of the termination of the respondent's employment into the contract, it not being necessary.In this case there are express provisions dealing with termination in the employment contract. Clause 17(1) deals with circumstances in which the Respondent has the right summarily to dismiss the applicant. Clause 17(2) grants each party an unqualified right to bring the contract to an end "..by giving to the other party not less than one month's written notice". In each of the authorities referred to above and relied upon by the applicant, the Court has rejected the implication of a term providing for termination on reasonable notice, because there were express contractual terms or a statutory provision governing termination. Furthermore, in light of Sarfaty, it is not necessary that the express terms provide for termination on notice, as long as the intention of the parties to deal with tenure and termination in its express terms, is discernible from the evidence of the agreement.