Newey v Westpac Banking Corporation [2014] NSWCA 319 (11 September 2014).
Sydney, Australia
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Category Archives: Contract
Commonwealth Bank of Australia v Barker [2014] HCA 32
ON 10 SEPTEMBER 2014, the High Court of Australia delivered Commonwealth Bank of Australia v Barker [2014] HCA 32 (10 September 2014).
The High Court allowed an appeal against the 2013 decision of the Full Court of the Federal Court of Australia in Commonwealth Bank of Australia v Barker [2013] FCAFC 83 (6 August 2013).
The High Court ruled, in favour of the Commonwealth Bank, that the implication of mutual trust and confidence is beyond the legitimate law-making function of the courts.
The court ruled that it is not necessary to imply into all employment contracts a term that neither party will, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of trust and confidence between them.
Sydney, Australia
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Commonwealth Bank of Australia v Barker
The High Court matter of Commonwealth Bank of Australia v Barker is listed for judgment tomorrow, 10 September 2014, at 10.15am in Court No 2, Parkes Place, Canberra.
Sydney, Australia
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Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1998] HCA 44 | 8 September 1988
ON 8 SEPTEMBER 1988, the High Court of Australia delivered Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107 (8 September 1988).
The proprietor of a building site (Blue Circle Cement) took out an insurance policy with Trident General Insurance which promised to indemnify the assured who it defined as Blue Circle Cement but also “all its subsidiary, associated and related Companies, all Contractors and Sub-Contractors and/or Suppliers”.
A contractor (McNeice) who incurred a legal liability (a judgment in favour of an injured worker) was held to be covered although not a party to the policy.
A non-party beneficiary under an insurance policy has a right at common law for benefits promised under the policy. The decision creates an exception to the privity of contract rule.
Sydney, Australia
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McRae v Commonwealth Disposals Commission [1951] HCA 79 | 27 August 1951
ON 27 AUGUST 1951, the High Court of Australia delivered McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 (27 August 1951).
A court must determine damages as best it can. Difficulty in assessing damages does not justify non-assessment.
The defendant was ordered to pay the plaintiff damages for breach of contract, assessed as being his expenses incurred in reliance on the plaintiff’s promise to sell it a shipwrecked oil taker which was in fact, by the defendant’s mistake, a shipwrecked oil barge.
Sydney, Australia
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Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25 | 23 August 1946
Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435 (23 August 1946).
http://www.austlii.edu.au/au/cases/cth/high_ct/72clr435.html
The dismissal of an employee terminates the employment relationship but not the contract of employment. An employer may unilaterally dismiss an employee but if the employee is wrongfully dismissed, he or she may elect to treat the contract of employment as terminated and sue for the damage suffered by the being deprived of his or her right to provide their services in return for earnings.
The employee does not have the right to insist on continuous employment, nor can he or she sue for wages if the service had not been provided. The employees only option is to treat the employer’s conduct as a repudiation and on that basis terminate the contract and sue for damages for wrongful dismissal.
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Hollis v Vabu Pty Ltd [2001] HCA 44 | 9 August 2001
ON 9 AUGUST 2001, the High Court of Australia delivered Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21; 75 ALJR 1356; 106 IR 80; 181 ALR 263 (9 August 2001).
http://www.austlii.edu.au/au/cases/cth/HCA/2001/44.html
The plaintiff was a pedestrian who was injured when a bike courier collided with him on a footpath. The defendant was the courier company who engaged the cyclist. The company denied liability for the pedestrian’s injuries on the basis that the cyclist was an independent contractor. The trial judge awarded damages to the pedestrian, finding that the cyclist was an employee. The Court of Appeal allowed an appeal by the company, finding that the cyclist was an independent contractor.
The High Court allowed an appeal by the cyclist, holding that the cyclist was not an independent contractor because:
- no discretion to accept or reject work.
- stringent roster system.
- clear rules on taking annual leave.
- little or no scope for freelancing.
- no special skills.
- cyclists were identified with the company with uniforms and a dress code.
- pay and conditions were consistent with an employment relationship.
- no scope for bargaining of rates.
- the provision of the bikes as necessary tools and equipment was not inconsistent with an employment relationship
- the exercise of control by the company over the courier’s activities.
The relevant considerations for determining whether or not a person is an independent contractor include:
- Who owns the business?
- Who controls the operation/work?
- Who owns the office space?
- Who owns the tools?
- Who does the contractor provide duties to?
- Does the independent contractor bear a risk of profit or loss?
- Is there a creation of goodwill?
- How is the independent contractor paid?
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Commonwealth Bank of Australia v Barker [2013] FCAFC | 6 August 2013
ON 6 AUGUST 2013, the Full Court of the Federal Court of Australia delivered Commonwealth Bank of Australia v Barker [2013] FCAFC 83 (6 August 2013).
http://www.austlii.edu.au/au/cases/cth/FCAFC/2013/83.html
Barker was an executive manager in the Adelaide corporate banking section of the Commonwealth Bank. He had a written contract of employment under which the bank could terminate his contract, without cause, with written notice of four weeks.
On 2 March 2009, Barker was handed a letter advising that his position was to be made redundant but it was the bank’s preference to redeploy him and that they would consult with him with regards to his options. His email and intranet access were cancelled immediately and he was made clear his desk, hand in his keys and mobile phone, and told not return to work.
The human resources department of the bank then made a number of unsuccessful attempts to contact Barker by email and mobile phone about another position that would have been suitable to his skill set. They were not aware until 26 March 2009 that Barker no longer had access to his work email or mobile phone. On 9 April he was advised in writing that his employment was terminated due to redundancy, effective from the close of business that day.
Barker commenced proceedings in the Federal Court against the bank for breach of employment contract and damages under s82 of the Trade Practices Act 1972 (Cth). The trial judge, Justice Besanko, found that the bank had been inactive when complying with its policies following notification of redundancy and that this was a serious breach of the implied term of mutual trust and confidence which entitled him to damages.
Besanko J awarded Barker damages of $317,000 for loss of the opportunity to be redeployed to a suitable position within the bank.
On appeal, the Full Court of he Federal Court of Australia was required to consider (1) whether the employment contract contained an implied term and (2) if there was an implied term, the bank’s breach of its policies constituted a serious breach of the relationship of trust and confidence upon which the term arose.
The Full Court majority (Jacobsen and Lander JJ, Jessup J dissenting) were of the view that even though there is no High Court authority on the issue, there is a significant degree of recognition in England and Australia for the Full Court to accept that such implied terms form part of Australian employment contracts.
The Full Court considered that the term operated after the dismissal so that the bank was required to take active steps to consult with Barker about the alternative available positions and allow him the opportunity to apply.
The Full Court consider the banks’ failure to contact Barker was unreasonable and constituted a breach of the implied term of mutual trust and confidence.
The bank has appealed to the High Court of Australia on the grounds that (1) Full Court made an error in holding that the common law of Australia contains an implied term based on a relationship of mutual trust and confidence and (2) that the Full Court made an error in finding that the implied term required the bank to consult with Barker about his redeployment options.
The decision has since been overturned by the High Court of Australia.
Sydney, Australia
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Garcia v National Australia Bank Ltd [1998] HCA 48 | 6 August 1998
ON 6 AUGUST 1998, the High Court of Australia delivered Garcia v National Australia Bank Ltd [1998] HCA 48; 6 CCL 81; 194 CLR 395; 155 ALR 614; 72 ALJR 1243 (6 August 1998).
http://www.austlii.edu.au/au/cases/cth/HCA/1998/48.html
The High Court considered its earlier decisions of Yerkey v Jones [1939] HCA 3; (1939) 63 CLR 649, Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 as well as the English decision of Barclays Bank Plc v O’Brien [1994] 1 AC 180.
Yerkey v Jones provides a special rule for married women who, regardless of other characteristics, voluntarily guarantee their husband’s loans. There are two limbs: (1) a wife may have a guarantee set aside if the consent was obtained by undue influence, unless she received independent advice (at 649, per Dixon J); and (2) a wife has a prima facie right to have a guarantee set aside if she failed to understand the effect of the guarantee or its significance, unless steps were taken by the lender to inform the wife of such matters (at 683, per Dixon J).
Commercial Bank of Australia Ltd v Amadio is the leading Australian case on unconscionability. Unconscionable dealings are defined as the “unconscientious use of a superior position to the detriment of a party who suffers some special disability or is or is in some special position of disadvantage” (Mason J at 461). Such dealings occur when “one party by reason of some condition or circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientous advantage is taken” ((Mason J at 462). In other words, entry into the contract must be caused by taking advantage of a special disability, not mere inequality or impaired judgment.
In Garcia, the High Court rejected the submission that the rule in Yerkey v Jones had been overruled by or subsumed in Amadio. The court at [34] per Gaudron, McHugh, Gummow and Hayne JJ reaffirmed Yerkey v Jones as being a separate rule of unconsciounability (1) applying to married women and not dependant on any presumption of undue influence by the husband over the wife or the husband as acting as agent for the creditor and (2) dependant on “the surety being a volunteer and mistaken about the purport and effect of the transaction, and the creditor being taken to have appreciated that because of the trust and confidence between surety and debtor the surety may well receive from the debtor no sufficient explanation of the transaction’s purport and effect”.
Sydney, Australia
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Addis v Gramophone Co Ltd [1909] UKHL 1 | 26 July 1909
ON 26 JULY 1909, the House of Lords delivered Addis v Gramophone Co Ltd [1909] UKHL 1, [1909] AC 488.
http://www.bailii.org/uk/cases/UKHL/1909/1.html
The decision is notable for establishing the general principle that damages for breach of contract do not cover injured feelings, mental anxiety, distress, anguish or frustration.
In cases of wrongful or unfair dismissal, damages are limited to lost earnings during the period of notice and are not to compensate the manner of dismissal; loss of reputation; difficulty of finding other employment; or injured feelings, mental anxiety, distress, anguish or frustration.
Damages for breach of contract are compensatory and the court may not award exemplary damages.
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