Christopher Noel Dayton v Woolworths Limited

Factual Background 10 This is an appropriate point at which to set out the facts, which were established by the documentary and oral evidence tendered in these interlocutory proceedings. 11 The applicant became employed by the respondent on 19 October 1998 and was appointed shortly thereafter as a produce manager. During the year 2000 he was absent from work and received a letter from an employee relations manager dated 25 May 2000 referring to unexplained absences from work and asking for information to support his then current absence. The letter contained the words: "The company considers your absence could be a case of abandonment of employment." A letter dated 30 May 2000 from the same person within the respondent's organisation referred to a telephone conversation with the applicant's brother explaining the applicant's absence that, as I understand from the letter, was based on a medical condition the nature of which was unspecified. The applicant was granted a period of unpaid leave from 17 May 2000 until 19 June 2000 and asked to provide a certificate, presumably a medical certificate, with respect to any absences beyond that date and a certificate for fitness to return to work once the applicant was able to do so. 12 Although the applicant did return to work, it is common ground that from 20 November 2000, the applicant had not in fact ever returned to work. Medical certificates made available towards the end of 2000 and at the beginning of 2001 indicate that the applicant was suffering from "anxiety problems" and a "nervous disorder". 13 On 14 March 2001, an employee relations officer of the respondent forwarded a letter to the applicant at an address in Ermington referring to a Centrelink medical certificate stating that he was unfit for work from 14 February 2001 to 13 April 2001 and that he would not be able to return to work for 6 to 12 months. The letter granted leave for the period 14 February 2001 to 29 March 2001, which would be offset against the applicant's outstanding leave entitlements. The letter sought a medical certificate stating that the applicant was fit to return to pre-injury duties on 30 March 2001 and that, in the absence of such a certificate, the applicant's employment would be terminated. A further letter was forwarded to the applicant dated 21 March 2001 to the same Ermington address. That letter stated that the applicant had failed to contact the author to advise of his intentions and likely return to work and accordingly his employment was terminated effective "close of business" 29 March 2001. 14 It was common ground between the parties that both those letters had been forwarded by courier to the Ermington address, which was the home of the applicant's mother. She had declined to receive the letters and, in any event, the applicant did not live at that address and it was not his last notified address to the respondent. 15 The respondent eschewed any reliance on those letters as establishing the termination of the applicant's contract of employment. 16 The respondent acted, however, on the basis of those letters having been received by the applicant and, for internal purposes, treated the applicant as having abandoned his employment. On or about 11 April 2001, the applicant's accrued annual leave entitlements were deposited into his bank account in an amount of $3885.40. The applicant did not communicate with the respondent with respect to the payment of those monies. 17 The author of the two letters of March 2001, Ms Angela Rimmer swore an affidavit for the purpose of these interlocutory proceedings and was cross-examined on it. She said in her affidavit that on or about 12 April 2001 she had a telephone conversation with the applicant and, to the best of her recall, he asked whether there was still a position for him to come back to. When told about the letters of 14 and 21 March and the termination effective 29 March 2001, Mr Dayton said that he had not received such letters. An internal email forwarded by Ms Rimmer on the same day seems to have confirmed this recollection of the conversation with the applicant. There is also reference in the email to the applicant raising with Ms Rimmer the question of a workers' compensation claim. In cross examination, the applicant conceded that Ms Rimmer had told him that his employment had been terminated. 18 Ms Rimmer produced a contemporaneous note with respect to a telephone conversation she had with the applicant on 30 April 2001. The note refers to an assertion by the applicant that he was having a meeting with the President of the Anti-Discrimination Board regarding discrimination and harassment alleged against the respondent. Such alleged discrimination apparently arose from the respondent's failure to process a workers' compensation claim and its request for a medical certificate from a medical institution in which he was being treated. It also included an allegation that the applicant's mental state and the fact that he had attempted suicide were due to the discrimination and harassment that he had received at the hands of all Woolworths managers and because of his lack of training. 19 A file note of Kerry McGoldrick entitled "Claims Manager NSW/ACT" refers to a telephone conversation, also on 17 April 2001, with the applicant in which the applicant said that his illness was due to his work with Woolworths and there was a discussion about a workers' compensation claim. The note includes the following: "I also explained that even if he produces a work cover medical certificate that it may not affect the termination of his employment. We would need to review that at such time as one is provided." The applicant was advised to seek medical opinion in support of any claim. 20 Evidence was given both orally and in affidavit form by Carol Munnings who, at the relevant time, was the "Salary Continuance Co-ordinator" in the respondent's Human Resources Department. Ms Munnings' evidence traversed the provisions of a Group Salary Continuance plan made available by the respondent to employees. That plan was constituted by a Group Salary Continuance Policy then issued by the life insurance company Mercantile Mutual Life (now part of the ING group). Relevantly for the purpose of these proceedings, the policy provided for certain disability benefits to be paid where a "member" sustained an injury, illness or disability causing Total Disability or Partial Disability as defined in the policy. The persons entitled to benefits were, relevantly, persons who were permanently employed by the respondent. In summary terms, benefits became payable under the policy 90 days after disability commenced by reference to an injury, illness or disability suffered whilst the member was a permanent employee of the respondent. The comprehension on the part of some of the respondent's personnel of the manner in which this policy operated gave rise to some problems for the applicant and created some uncertainty, which, as will be shown, contributed to the applicant's problems that are the subject of these substantive proceedings. 21 Ms Munnings gave evidence that in about late May 2001 she received a telephone enquiry from a person within the Woolworths superannuation area concerning a claim for a superannuation benefit made by the applicant. The enquiry sought clarification as to whether the applicant had made a claim for a Group Salary Continuance benefit under the policy or whether he had waived any such claim, this apparently being a prerequisite to applying for a superannuation benefit. Ms Munnings said that she contacted the applicant "on or about 30 May 2001". It appears, as a result of evidence given by the applicant, that the date was 31 May 2001. The applicant is said to have asked Ms Munnings why his superannuation benefits had not been paid. She alleges that she said to the applicant words to the effect "All I know is that Woolworths Superannuation have informed me that your employment with Woolworths has been terminated and they wanted to know whether you would be claiming GSC." The applicant is alleged to have said to her words to the effect "I need my superannuation to pay for my medication and other things. If I signed something saying that I resigned, would I get my superannuation straight away then?" Ms Munnings said that she then informed the applicant that she did not think it was possible for him to resign because he had already been terminated but, on request from the applicant, said that she would send him some resignation forms with the caveat that "I don't think you would be allowed to resign as your employment has already terminated." The applicant denied that these words were said to him by Ms Munnings. 22 There has been tendered into evidence a copy letter from the "Salary Continuance Co-ordinator" addressed to Mr Dayton dated 30 May 2001, which has noted on it in handwriting "standard letter". It refers to a "letter/telephone conversation with myself, in which you advise that you wish, for medical reasons, to resign from Woolworths." The letter then goes on to state that upon resignation there would be cessation of employment with Woolworths, there would be entitlement to payment of annual leave and long service leave etc and other entitlements under the superannuation scheme. There was enclosed with that letter a pro forma resignation letter. 23 I have considerable doubt whether that letter was in fact a copy of the letter forwarded by Ms Munnings to the applicant. The notation that it was a "standard letter" and the date of 30 May 2001 is more indicative of the letter being a recreation of what was sent. In any event, Ms Munnings said that she was advised by the applicant's mother that that letter had not been received and accordingly she forwarded a further letter in the same terms dated 6 June 2001, a copy of which was produced for the purpose of the hearing by the applicant. 24 As will be seen, the provisions of this letter formed a critical part of the controversy in these proceedings. The applicant asserted that the letter was indicative of the fact that the respondent did not regard his employment as at an end. The respondent explained the letter by reference to the conversation, which Ms Munnings deposed she had had with the applicant to which I have earlier referred. Although Ms Munnings was cross-examined closely on this part of her affidavit and her recollection of the conversation and although she conceded that she had no notes to support what was said in the conversation, I accept that Ms Munnings did have a conversation with the applicant on 31 May 2001, to which the applicant attests, and I accept also in general terms that the "resignation letter" was produced at the request of the applicant in order to enable him to make a superannuation claim. 25 The next relevant development occurred when Ms Munnings received a letter from a solicitor acting for the applicant dated 12 June 2001 seeking papers that would enable him to make a claim under the Group Salary Continuance Policy. The letter requested that those forms be made available and also sought details of the status of the applicant's workers' compensation claim. 26 Ms Munnings referred the matter to Mr Michael Stoddart who was the regional human resources manager with overall responsibility for the area in which the applicant last worked. By letter dated 21 June forwarded to the applicant's then solicitor, Mr Stoddart sent out "paperwork" for the claim on the policy and said "However, I must state that Mr Dayton was forwarded correspondence on March 14, 2001 and then subsequently on March 21, 2001 in relation to the abandonment of his employment with Woolworths Supermarkets. Therefore, Mr Dayton was terminated from Woolworths Supermarkets on March 29, 2001 after failing to provide an adequate medical certificate stating he was fit to return to work in accordance with the Workplace Relations Act 1996 and thus is, therefore, not entitled to Salary Continuance from the Company." 27 I should observe that Mr Stoddart's understanding of the circumstances in which entitlement arose to claim under the policy differ from mine, based on my reading of the policy. As it transpired, much later, the applicant's claim for Group Salary Continuance Policy benefits was accepted by the insurer and backdated to the date upon which he last worked for the respondent, namely 20 November 2000 save for a 90 day "waiting period". Accordingly, the assertion made by Mr Stoddart and, seemingly, embraced by Ms Munnings and others within the respondent's organisation had probably caused some uncertainty on the applicant's part as to his entitlement and, in terms of the summons as originally framed, was a significant factor in the initiation of these proceedings. 28 The applicant made a complaint to the Anti-Discrimination Board alleging discrimination in the manner in which he had been treated by the respondent. A handwritten narration of the factual background to the complaint referred to a series of difficulties with supervisors at a variety of stores over a number of matters and periods off work with a shoulder injury. The narration said in part "For several weeks I pursued Michael Cahill about going back to Burwood, which never eventuated. In early November, I was again put off work with depression under doctor's orders. On 12 April 2001, I was terminated from my employment due to my long term illness." There is also reference in the narration to a telephone conversation with Ms Rimmer on 12 April 2001. When enquiring about whether his job was still open, Mr Dayton was told by Ms Rimmer that she was not interested and "stated as far as she was concerned my position was terminated…." 29 On 2 August 2001, Ms Munnings wrote to the applicant advising him that his claim for Group Salary Continuance could not be processed as he was "no longer an employee of Woolworths Limited." She indicated that information would be forwarded to the "Superannuation department for processing of benefit release." 30 There then appears to have been communication by email between Ms Munnings and persons within the respondent's Superannuation department querying why Mr Dayton would not be entitled to make a claim under the Group Salary Continuance Policy even though his employment had been terminated. 31 It appears that the applicant then approached Mr Roger Corbett, the Chief Executive Officer of the respondent, personally, concerning his problem. As a result of this the applicant, his brother Arnold Dayton and a Mr Gary Gearside attended a meeting with Ms Fran Corrigan who was then the regional human resource manager with responsibility for a number of stores including those at which the applicant had been employed. The meeting took place on 15 August 2001. At that meeting there was also in attendance a Mr Tony McFadzean and one other person representing the respondent. The evidence given on behalf of the applicant differed from that given by Ms Corrigan as to what occurred at that meeting. In that Ms Corrigan does not, on my understanding of her evidence, have any independent recollection of what occurred, I accept the evidence given on behalf of the applicant at its highest as to the discussions which occurred at that meeting. The most comprehensive evidence about what had occurred at that meeting was given by the applicant's brother. His evidence was to the effect that the applicant said he had never received the respondent's notice of termination of employment and that he had provided a medical certificate for his illness, which contradicted any basis for an argument of abandonment of employment. His assertion is that on this basis there should have be an investigation "into his job still being open for him when he was well enough to return, and the applicant should be entitled to make a claim for the insurance he had (Group Salary Continuance)". It was clear from Mr Arnold Dayton's account that Ms Corrigan indicated that she was not familiar with the applicant's circumstances and it would be necessary to make enquiries and to give the applicant an opportunity to apply for a Group Salary Continuance benefit. The account given by Mr Gearside is to similar effect with an added assertion, however, that those representing the respondent "agreed Christopher's position may still not be terminated." 32 Shortly after the meeting, Ms Corrigan arranged for the applicant to complete a claim for Group Salary Continuance benefits. That claim was processed, albeit with difficulties arising because of the applicant's inability to attend medical examinations and difficulties concerning the provision of medical certificates and the like. 33 On 20 November 2001, the applicant wrote to Ms Young and Ms Munnings presumably within the respondent's Superannuation department and Salary Continuance department respectively. In that letter, he complained that he had not received information regarding superannuation entitlements and stated that he "was terminated by Woolworths on 30/3/01". He complained that in May 2001 he had requested access to his personal superannuation contributions but was told that his employment had not been terminated. In July 2001 when he applied for salary continuance benefits, he said that this was rejected because he was not an employee of Woolworths and was then advised that his superannuation would be calculated and released. He said that in November 2001, following the meeting with Mr McFadzean and Ms Corrigan "I filled in a number of applications for my benefits. In November 2001 I received a separation certificate from Woolworths (terminated due to abandonment)." He complained that as at 20 November 2001, he had still not received any information or payment and had been told not to contact Woolworths. He complained about the harassment and "running around" he had received and said that he wanted to take the matter before the Superannuation Complaints Tribunal. 34 In a letter from "Woolworths Group Superannuation Scheme Pty Ltd" dated 27 November 2001 signed by H.L. Young who was described as "secretary to the Trustee" acknowledgement of the applicant's letter of complaint contained the following statement which Mr Dayton must have found extraordinary: "As we have advised you during our telephone conversations on a number of occasions, under the terms of the Trust Deed of the Woolworths Group Superannuation Scheme, the Trustee is unable to release your benefit until it is advised by the Company that your services have been terminated….We understand that the termination of your services has been delayed pending your decision to lodge a claim for benefits under the Company's Group Salary Continuance Plan." The applicant was informed that once advice had been received from the respondent of the termination of his services, his superannuation benefit would be processed and could be transferred to a superannuation fund of his choice. The applicant was then furnished with further information concerning his benefits. 35 The applicant responded by letter dated 21 December 2001 in which he rejected the basis for calculation of superannuation benefits that, for present purposes, it is not necessary to deal with. Relevantly, however, his letter contains the following statements: "I was terminated from Woolworths on 30/3/2001 for failing to provide a certificate to return to duties because I was ill….It has taken months to investigate my termination….I received a letter from the company on 4/11/01 stating I was terminated for abandonment of my job, which is incorrect." 36 As I have previously observed, the sole matter for determination in these interlocutory proceedings is whether these proceedings are time barred by reason of the operation of s 108B of the Act.

37 Prima facie, the applicant is entitled to maintain his claim and to have it determined appropriately during the course of a substantive hearing when he has an adequate opportunity of presenting all of the evidence that he wishes to bring before the Court. The appropriate principle has recently been stated in the High Court of Australia in Agar v Hyde (2000) 201 CLR 552. In a joint judgment, Gaudron, McHugh, Gummow and Hayne JJ said:

"[57] It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way." (Footnote reference omitted). 38 This statement of principle was more recently endorsed by Gleeson CJ, Gummow, Hayne and Crennan JJ in the High Court in Batistatos v Road and Traffic Authority of New South Wales [2006] HCA 27 at [46]. 39 It was common ground between the parties that in determining this interlocutory matter the evidence in the proceedings should be taken at its highest in favour of the applicant.

Section 108B 40 The matter for determination therefore, applying the approach referred to above is whether the summons which was originally filed on 29 November 2002 was filed not later than 12 months after the termination of the applicant's contract of employment. 41 I should interpolate at this stage that it was submitted on behalf of the respondent that "s 108B is not concerned with the legal fiction of the precise timing of the termination of a contract in the strict sense, but rather directs attention to the actual operation of the contract and the cessation of that operation." In so submitting, the respondent relied on two decisions. The first was the judgment of Peterson J in Kennedy v Contract Transport Solutions Pty Ltd [2003] NSWIRComm 158. At [18], His Honour accepted a proposition that where a contract actually operated after a particular date, then that date was not relevant for the purpose of application of s 108B. The same approach was taken by Backman J in Sylvan Buildings Pty Ltd v AG&S Building Systems Pty Ltd [2005] NSWIRComm 368. At [27], Her Honour referred to agreements which "were on foot", and therefore were not affected by s 108B(1). 42 I do not understand that either of these observations supports the respondent's submission. The first point to make is that s 108B(1) clearly refers to the termination of the contract, which is sought to be impugned in the proceedings. In the context of a provision which seeks to establish a time bar for the bringing of proceedings, and which must therefore be construed strictly having regard to its purpose, it is my opinion that the words used by the legislature are clear and unambiguous. The trigger for the operation of the time bar is clearly the termination of the contract. Whilst the contract continues, the time bar does not run. I do not read the observations of either Peterson J or Backman J as demanding any other approach. 43 In the context of a contract of employment, there has always been a distinction between the termination of the contract itself and the employment relationship. This concept was discussed in the High Court of Australia in Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435, which in turn was considered by the High Court of Australia in Byrne v Australian Airlines Ltd (1995) 185 CLR 410. Brennan CJ, Dawson and Toohey JJ observed that the contract of employment may continue to exist notwithstanding that the employment relationship may have come to an end, for example by reason of a dismissal. The joint judgment discusses this matter at pages 426 to 429. It is not necessary, in my opinion, to consider this matter further because, as I have observed, s 108B is clearly directed to the termination of the contract of employment and not the termination of the employment relationship. Accordingly, I proceed on this basis.

Repudiation 44 The respondent had initially signalled an intention to argue that the termination letter of 21 March 2001, which purported to terminate the contract effective from "close of business on 29 March 2001", had the effect of terminating the contract of employment. Faced with the concession that the applicant had not received that notice of termination, the respondent abandoned any such argument. Accordingly, the respondent submitted that it had by its conduct repudiated the contract of employment, particularly in the course of the conversation between the applicant and Ms Rimmer that took place on 12 April 2006. There are other indicia of repudiation. The fundamental principle of contract law is that once a party has repudiated a contract, the other party is entitled to accept the repudiation and thus bring the contract to an end by termination or may refuse to accept the repudiation, in which case the contract remains on foot. If authority be required for such a fundamental proposition, it may be found, in the context of a contract of employment, in the discussion of the Full Court of the Federal Court of Australia in Turner v Australasian Coal and Shale Employees Federation (1984) 55 ALR 635. 45 It is clear that in April 2001 when Ms Rimmer spoke to the applicant and indicated that the respondent regarded the contract at an end, that the applicant was not then in a position to perform work because of a medical condition, having in fact not worked since 20 November 2000. Thus, it might be said, that the substance of what was being conveyed to the applicant at that time was that when or if he became no longer incapacitated for work and as a result wished to resume his work duties, the respondent would not permit him to do so. In contract law terms, this may be characterised as an anticipatory breach of contract. 46 The impact of repudiation by way of an indication that a party will not perform its obligations under a contract was described by Dawson J in the High Court of Australia in Foren v Wight (1989) 168 CLR 385, at page 441:

"Repudiation by way of anticipatory breach by a party to a contract does not put an end to the contract unless the other party accepts the repudiation and rescinds the contract. Although he may do so, the other party does not have to accept the repudiation. He may continue to treat the contract as on foot and hold the party guilty of repudiation to the performance of his obligations. If those obligations remain unperformed when the time for performance arrives, the anticipatory breach will be converted into an actual breach. If the other party keeps the contract alive, he does so not only for his own benefit but also for the benefit of the party guilty of repudiation. The latter may, upon giving reasonable notice, withdraw his repudiation and complete the contract and, subject to a qualification with which I shall deal, the other party remains bound by the contract, enabling the repudiating party to take advantage of any breach by the other party or any supervening event which would discharge him from liability. If the other party elects to rescind, the rescission is, of course, not ab initio . He is entitled to maintain an action for damages for the anticipatory breach, the damages being calculated by reference to the loss which he would suffer by the breach becoming actual, subject to any opportunity to mitigate his loss in the meantime. See Hochster v De la Tour (1853) 2 El & Bl 678; 118 ER 922; Frost v Knight (1872) LR 7 Exch 111 at 112; Avery v Bowden (1856) 6 El & Bl 953; 119 ER 1119; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235." Then at page 442 His Honour continued:

"I have said that there is a qualification to the proposition that a party who elects not to accept the repudiation of a contract remains bound by the terms of the contract to perform the obligations which it imposes upon him. Whilst the contract remains on foot for both parties, if the repudiation by one party makes it futile or pointless for the other party to attempt to perform an obligation, the law does not require him to do so. The obligation remains - it does not disappear from the contract - but the other party is treated as if he had performed it in the limited sense that he is absolved from the consequences which would otherwise flow from his non-performance. This principle, which emerged before the doctrine of anticipatory breach was formulated in 1853 in Hochster v De la Tour , was originally justified as being common sense, although it has latterly been seen as the early recognition of the now developed notions of estoppel." 47 Further to what was said by Dawson J, it is also appropriate to refer to the succinct observations of Gaudron J in the same case. At page 458 Her Honour said:

"A party to a contract which has been repudiated may either terminate the obligations under the contract or affirm the contract. See Bowes v Chaleyer (1923) 32 CLR 159 at 169 per Knox CJ at 190 per Higgins J; Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 at 348; Peter Turnbull , per Kitto J at 250; Tropical Traders Ltd v Goonan (1964) 111 CLR 41 at 55, per Kitto J. A party is taken to have affirmed the contract if he or she does an act which is consistent only with its continued existence: Sargent v ASL Developments Ltd (1974) 4 ALR 257; 131 CLR 634, per Stephen J at 646 and per Mason J at 656." 48 However, the matter is more complicated than that. In Sargent v ASL Developments Limited (1974) 131 CLR 634, Stephen J in the High Court discussed the inconsistent rights of rescission and affirmation reposing in an innocent party to a contract which has been repudiated. His Honour referred to "the doctrine of election" as between two inconsistent legal rights. His Honour said that "For the doctrine to operate there must be both an element of knowledge on the part of the elector and words or conduct sufficient to amount to the making of an election as between the two inconsistent rights which he possesses…. The nature of the knowledge which an elector must possess is a matter upon which the authorities are somewhat at variance. An elector must at least know of the facts which give rise to those legal rights, as between which an election must be made; without that knowledge the doctrine of election will not be available to make irrevocable his choice of one particular right, although in appropriate circumstances an estoppel may still arise which produces that very consequence and this without any such requirement of knowledge on the part of the party who is estopped. The extent of knowledge of relevant facts necessary for the doctrine of election to apply has been described as 'full knowledge of the material facts'….". At pages 642- 3 His Honour said: "In Elder's Trustee & Executor Co Ltd v Commonwealth Homes & Investment Co Ltd (1941) 65 CLR 603; [1941] ALR 302, a knowledge of circumstances such as will provide information from which the decisive fact giving rise to the legal right is "a clear if not a necessary inference" was held to be sufficient (65 CLR at 617; [1941] ALR at 305). The extent of knowledge will no doubt usually give rise to little difficulty; it is when the nature of the requisite knowledge is in issue, whether knowledge of the facts giving rise to the legal rights suffices or whether, on the contrary, there must also be knowledge of the right of election as between two available, inconsistent legal rights, that contrariety exists." 49 His Honour was not required to determine this matter having regard to the circumstances of the particular proceedings but rather had regard to the distinction between a right of election explicit in the contractual terms, where it was not necessary to demonstrate a knowledge of choice of rights, and a choice which was created independently of the contractual terms, about which His Honour acknowledged that there was controversy. Yet His honour clearly observes at page 646 that:

"the words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other….". 50 In that very same case, Mason J (as His Honour then was) expressed a tentative view that knowledge of the existence of an alternative right of election as distinct from knowledge of the facts giving rise to that right was not essential to the making of a binding election. Relevantly, His Honour made the following comment at page 658: "For my part this proposition correctly states the law in its application to contracts as well as interests in property. If a party to a contract, aware of a breach going to the root of the contract, or of other circumstances entitling him to terminate the contract, though unaware of the existence of the right to terminate the contract, exercises rights under the contract, he must be held to have made a binding election to affirm. Such conduct is justifiable only on the footing that an election has been made to affirm the contract; the conduct is adverse to the other party and may therefore be considered unequivocal in its effect. The justification for imputing to the affirming party a binding election in these circumstances, though he be unaware of his alternative right, is that, having a knowledge of the facts sufficient to alert him to the possibility of the existence of his alternative right, he has acted adversely to the other party and that, by so doing, he has induced the other party to believe that performance of the contract is insisted upon. It is with these considerations in mind that the law attributes to the party the making of a choice, though he be ignorant of his alternative right. For reasons stated earlier the affirming party cannot be permitted to change his position once he has elected." 51 As was pointed out in the joint judgment of Deane, Toohey, Gaudron and McHugh JJ in the High Court of Australia in Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1992 - 1993) 182 CLR 26, it may be easier to recognise that an election has been made where an innocent party elects to affirm a contract post repudiation rather than elects to treat the contract as being at an end. Their Honours said: "If a party to a contract, faced with the choice of terminating the contract or keeping it on foot, terminates the contract that party will ordinarily have acted in a way that leaves no doubt as to the choice made. And that choice will be clearly inconsistent with the exercise of the right to keep the contract on foot because the contract no longer exists. But where, as here, the situation is the converse the question is not answered so readily…." (At page 41). Indeed, in continuing to regard a contract as remaining on foot is not necessarily consistent with the innocent party having elected to affirm the contract. As Their Honours observed: "Such an implication is at odds with the notion of being confronted with the necessity of making a choice." (At page 42). 52 In reviewing the evidence in these proceedings I repeat that the parties proceeded, because of the interlocutory nature of the proceedings, on the basis that the evidence should be taken at its highest in favour of the applicant. I have already observed that in the clear absence of evidence that the applicant received the purported letter conveying the termination of employment, the telephone conversation between the applicant and Ms Rimmer in April 2001 may be characterised as a repudiatory anticipatory breach of contract. This raises the question as to whether the applicant by his conduct may be said to have elected to accept or reject the repudiation. In turn this will require a determination as to whether the applicant by his conduct unequivocally accepted the repudiation of the contract of employment by the respondent and whether, in fact, he made any election either to accept or reject the repudiation. 53 On one view of it, the application of the principles of law covering the areas of repudiation and anticipatory breach to the circumstances of a person who worked in the produce department of Woolworths supermarkets might be seen as creating an air of unreality in determining the consequences of what happened to the applicant in these proceedings for the purpose of considering this interlocutory application. Nevertheless, as I understand the authorities, and the submissions by the parties, this is the manner in which this interlocutory application must properly be determined. 54 There is nothing in the evidence in the proceedings that would indicate that in his initial discussion with Ms Rimmer in April 2001 the applicant accepted that his employment had in fact been terminated. To the contrary, he insisted that he had not received the letter of termination. This is inconsistent, in my opinion, with any determination that there had been a positive election on the part of the applicant to accept that his contract of employment had been brought to an end. In the same way I do not accept the applicant's complaints in the telephone conversation of 30 April 2001 that he had been the subject of discrimination in connection with the manner in which his workers' compensation claim had been dealt with as being indicative of such an election. 55 The telephone conversation of 17 April 2001 muddied the waters. Ms McGoldrick said that the production of a Workcover medical certificate "may not affect the termination of his employment. We would need to review that at such time as one is provided." Perhaps Ms McGoldrick intended her comment to indicate that dealing with the applicant's workers' compensation claim would not impact upon the termination of his employment, which had already occurred. Such a situation, however, is so obvious that it might be said that there would be no need for such a remark to be made. Her comment is equally capable of indicating that the purported termination of employment might be revisited. Again, I repeat that the evidence is to be taken at its highest in favour of the applicant. 56 The conversation between the applicant and Ms Munnings in May 2001 in which he asked that he be permitted to resign so as to obtain superannuation benefits to pay for his medication is inconsistent with any assertion that the applicant had elected to accept the termination of his contract of employment. The hesitancy with which Ms Munnings dealt with that request by using the words "I don't think you would be allowed to resign…." is consistent with her understanding that the applicant maintained that his employment was on foot. Any confusion about this was compounded by the letter of 30 May 2001, the terms of which I have extracted in [22] above. 57 Although the letter from Mr Stoddart of 21 June 2001, the provisions of which are referred to in [26] above restated that the applicant had been forwarded correspondence in March 2001 and that he had been "terminated", that letter also stated, incorrectly as it transpires, that the applicant was not entitled to claim under the Salary Continuance Policy. Seen in its totality, the letter might be said to be misleading. In any event, even if it may be characterised as affirming termination of employment, there is, again, no indication that the applicant reacted in communication with the respondent in a manner consistent with an election to accept that his employment had been terminated. 58 Although the applicant complained to the Anti-Discrimination Board alleging discrimination and referring to the fact that the respondent had terminated his employment on 12 April 2001, this is capable of being characterised as no more than an assertion by the applicant as to what the respondent had purported to do but is not necessarily consistent with the applicant having elected to accept that termination. 59 The meeting that occurred on 15 August 2001, the details of which are set out in [31] above, is indicative of equivocation on the part of the respondent as to whether or not the applicant's employment had been terminated and is inconsistent with any notion that the applicant had elected to accept the termination of his employment. 60 In [34] above I referred to what I described as an "extraordinary" letter from the secretary to the trustee of the Woolworths Group Superannuation Scheme indicating that no advice had been received from the respondent that the applicant's services had been terminated. I would conclude that the various arms of the respondent's organisation that had dealt with the applicant in the manner in which I have described had created uncertainty as to whether the applicant's employment had indeed been terminated and the applicant reacted accordingly. That is, I am unable to conclude that the applicant had at any stage prior to 29 November 2001 elected to accept the repudiation of the respondent of his contract of employment. Indeed, the letter of 21 December 2001, which the applicant forwarded to the respondent's Superannuation arm, is consistent with the rejection of the purported termination of his employment. A relevant extract from that letter is set out in [35] above. 61 Taking the evidence at its highest in favour of the applicant I am unable to conclude that the applicant had elected to accept the repudiation as bringing his contract of employment to an end nor do I find that there was any positive evidence that the applicant elected to accept the contract as remaining on foot. However, I find that his conduct since 12 April 2001 has at all times been consistent with an understanding that his contract of employment remained on foot. Whatever understanding the applicant had in this regard was, as I have observed, complicated by the inconsistent conduct of the various persons within the respondent's organisation. 62 It should be emphasised that this aspect of the matter needs to be approached on the basis that the respondent's repudiation was by way of anticipatory breach of the contract of employment. That is, at such stage as the applicant may no longer be incapacitated for work it would not provide any work for him. 63 The findings, which I have made, have not taken into account the possibility on the state of the authorities that the respondent needed to establish that the applicant had elected to accept the recision of the contract of employment in circumstances in which he was aware that he was entitled to elect as between one of two alternative sets of rights, as referred to by Stephen J in Sargent, discussed above. To the extent that this may be a determining factor, there is, in my opinion, no evidence at all that the applicant was aware of the existence of any alternative rights of election. Nor do I find that the applicant had a knowledge of facts sufficient to alert him to the possibility of the existence of an alternative right as referred to by Mason J in Sargent. There does not appear to be any evidence that the applicant was "confronted with the necessity of making a choice" as referred to in the joint judgment in the High Court in Immer. 64 For all of these reasons, the respondent's submission that the contract of employment was terminated before the relevant date by the applicant electing to accept the respondent's repudiation must fail.

Estoppel/ abuse of process 65 The respondent relied on an estoppel/abuse of process argument. It submitted that the applicant was estopped from maintaining the s 106 proceedings or alternatively that they constituted an abuse of process because a member of the Australian Industrial Relations Commission had determined that the applicant's contract of employment had been terminated on the grounds of abandonment of employment on 28/29 March 2000. The applicant had lodged an application before the Australian Industrial Relations Commission for relief in relation to the termination of his employment pursuant to s 170 CE(1) of the then Workplace Relations Act (1996). He stated in the application that the date of termination of his employment was 22 February 2002. Proceedings came before Commissioner Harrison on 17 July 2002 when the applicant represented himself and Ms Corrigan appeared for the respondent. The Commissioner noted that Woolworths resisted the application on the basis of "two jurisdictional points". There is no notation on the transcript as to when or how the Commissioner had been informed by Ms Corrigan that these points were to be taken. It seems, however, from the Commissioner's cryptic comments that the first objection related to the time at which the application had been brought and the second was based on the fact that the applicant was not covered by a relevant award and therefore the AIRC lacked jurisdiction. In response to a request from the Commissioner, the applicant outlined the factual circumstances surrounding the non-receipt of the letters of March 2001 and later developments, traversing some of the matters to which I have referred. The applicant sought an extension of time in which to bring the proceedings, presumably because the application was lodged on 4 June 2002 with respect to an alleged termination of employment on 22 February 2002. The application was required to be lodged by the Workplace Relations Act within 21 days after the day on which the termination took effect. 66 Ms Corrigan then addressed the Commissioner. She said in part "….Christopher Dayton was terminated for abandonment of employment by Woolworths on 29 March 2001. This in effect was more than 15 months ago…." 67 That is the only information that was furnished to the Commissioner concerning any alleged termination of employment that day. 68 After Ms Corrigan had discussed subsequent developments, the Commissioner adjourned the proceedings indicating that he would hand down a decision in due course. That decision was published on 6 August 2002. The Commissioner in his decision said inter alia "The application for relief was lodged in the Sydney Registry on 4 June 2002. The respondent submits that the applicant was terminated on the grounds of abandonment of employment on 29 March 2000. This was acknowledged by the applicant although he was unaware of his termination until some time in April owing to the letter of termination being sent to an incorrect mailing address….In this matter the application is 15 months late…." 69 The Commissioner then found that the applicant's employment was not covered by a Federal award or agreement and, although not stated specifically, implied that it was beyond the jurisdiction of the AIRC. 70 The respondent submits that the decision of Commissioner Harrison creates an issue estoppel in that there was a finding that the applicant's contract of employment was essentially terminated in circumstances that would attract s 108B of the Act. In The administration of the Territory of Papua and New Guinea v Daera Guba (1972 - 1973) 130 CLR 353, Gibbs J (as His Honour then was) in the High Court of Australia adopted the following from the judgment of Lord Guest in Carl Zeiss Stiftung v Rayner and Keeler Ltd (No 2) (1967) 1AC 853 at 933 as stating succinctly the appropriate principle to be applied. His Lordship said "The rule of estoppel by res judicata, which is a rule of evidence, is that where a final decision has been pronounced by a judicial tribunal of competent jurisdiction over the parties to and the subject-matter of the litigation, any party or privy to such litigation as against any other party or privy is estopped in any subsequent litigation from disputing or questioning such decision on the merits." Gibbs J went on to observe that such an issue estoppel may arise from the determination of a tribunal which is not strictly a court but which "has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute or from the submission of parties…." (At 453). 71 The question as to whether and to what extent the work of the Australian Industrial Relations Commission may create issues estoppel was considered in a comprehensive manner by a Full Bench of the Federal Court of Australia in Miller v University of New South Wales (2003) 127 IR 432. At [10] and following Gray J examined the power of that Commission in determining unfair dismissal proceedings to make findings with respect to certain matters. His Honour discusses also the three-stage process that the Commission is required to undertake namely conciliation, arbitration and the choice of any appropriate and relevant remedy. His Honour's observations are the subject of further elaboration in the joint judgment of Ryan and Gyles JJ. Their Honours also deal extensively with the principle of issue estoppel. 72 For my part, it is not necessary that I consider this matter in any detail. This is because there are a number of responses that can be made on a prima facie basis to the respondent's submission. 73 The first is that having found that there was no jurisdiction to deal with the matter, the Commissioner had no jurisdictional power to make any determination with respect to the date of termination of employment. Secondly, the date found by the Commissioner, namely 29 March 2000, is patently incorrect. Thirdly, the "decision" was made by reference to factual matters that were contested but not tested in any way. There was no process by which the applicant was given an opportunity of rebutting anything said by Ms Corrigan. Furthermore, my reading of the transcript does not indicate that Mr Dayton assented to the fact that his contract of employment had been terminated by Woolworths on 29 March 2001. He said, as set out in the transcript: "Allegedly I was terminated on 29 or 31 March 2001 but I didn't find out until the middle of April 2001. The letters that the company sent weren't sent to my address, they were sent to my mother's address and were never received by my parents or anyone…." Furthermore, Ms Corrigan made no attempt to tell the Commissioner that the respondent was aware that neither of the March 2001 letters was received by the applicant. In those circumstances, it was, in my opinion, inappropriate for Ms Corrigan to have made the assertions that she did on behalf of Woolworths Limited. In all these circumstances, I would not be prepared to apply the principle of estoppel to the determination made by the Commissioner. I am able to deal with the respondent's further submission that these proceedings constitute an abuse of process by reason of the proceedings taken by the applicant before the AIRC in the same manner. Those proceedings were based on a claim that I shall describe in general terms as one being of unfair dismissal. The subject matter of these proceedings is, as is readily apparent from the summary which I have set out above, much more extensive. It includes, as I have said, the payment of monies based on an alleged failure to pay a salary increase, a claim for annual leave entitlements, a claim in the nature of general damages and the like. In any event, the proceedings before the AIRC were terminated by the Commissioner's decision published on 6 August 2002 on the basis of lack of jurisdiction. In these circumstances there could not and has not been any duplication of processes that would constitute an abuse of process. It cannot be said that the continuation of these proceedings "would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate a newer case which has already been disposed of by earlier proceedings." Per Mason CJ, Deane and Dawson JJ in the High Court of Australia in Walton v Gardiner (1995) 177 CLR 378 (at 393). This submission is misconceived.

Frustration 74 The respondent also submitted that the applicant's contract of employment had come to an end at a time when s 108B operated by reason of the application of the doctrine of frustration. That doctrine was described succinctly by Lord Simon of Glaisdale in the House of Lords in National Carriers Ltd v Panalpina (Northern) Ltd (1981) AC 675 in the following terms: "Frustration of a contract takes place when there supervenes an event (without default of either party and for which the contract makes no sufficient provision) which so significantly changes the nature (not merely the expense or onerousness) of the outstanding contractual rights and/or obligations from what the parties could reasonably have contemplated at the time of its execution that it would be unjust to hold them to the literal sense of its stipulations in the new circumstances; in such case the law declares both parties to be discharged from further performance." (At 700). 75 In the context of these proceedings, it was submitted by the respondent that once the applicant became incapacitated for work without any clear indication as to when or whether he was likely to be able to return to work, the contract of employment was frustrated and, by operation of law, terminated. 76 Whilst the decided cases have established that the doctrine of frustration can apply to contracts of employment, there has been some controversy as to the circumstances in which that doctrine should be applied. This matter was most recently considered by a Full Bench of this Court in Hilton Hotels of Australia Ltd v Pasovska [2003] NSWIRComm 17. I set out below [38] and [39] of the Full Bench judgment that encapsulates by reference to the well known judgment of Wootten J in the Supreme Court of NSW in Finch v Sayers the "in principle" approach to be adopted in determining whether a contract of employment has been terminated by reason of frustration. "[38] We consider that the authority which provides relevant assistance is the judgment of Wootten J in the Equity Division of the Supreme Court in Finch v Sayers . His Honour's judgment was described by the Full Industrial Court in Cachia v State Authority Superannuation Board at 273 - 274 as "the principal relevant authority relating to the question of frustration of employment contracts" in New South Wales, and that the reasoning of Wootten J was "overwhelmingly persuasive in a modern industrial context". We consider that those observations are correct and that his Honour's judgment has particular significance in relation to award-related employment. Such employment (except where casual in nature) may usually be described as employment of indefinite duration. Such employment is the subject of terms drawn from either the award or the contract of employment which invariably provide a ready facility for termination of the employment by either party to the contract of employment. That is the situation in the present case.

[39] The significance and utility of the judgment in Finch v Sayers lies not only in Wootten J's conclusions but also in his Honour's careful analysis of contemporary employment law and regulation and the way in which such circumstances have affected legal notions developed in times when employment relations and attitudes to such relationships were very different. It is not necessary for the disposition of these appeals to refer in detail to the whole of his Honour's exposition of the pertinent legal and policy considerations. However, the following passage from the judgment (at 546 - 547) usefully provides the basis of his Honour's reasoning: One cannot but feel reluctance to embrace a view of the law of contract which produces a result not only contrary to what was a common assumption and basis of action of both parties, but contrary also to what common experience tells one is the normal basis on which employers and employees conduct their relationships today in this community, when permanent or indefinite employment is contemplated. If, as the defendants contend, the authorities constrain me to this course, I must adopt it. But I cannot accept that the proper starting point for consideration of this particular matter is the view adopted by the courts in England one hundred years ago of the consequences of an opera singer being disabled by illness: Bettini v Gye (1876) 1 QBD 183; Poussard v Spiers (1876) 1 QBD 410 or even the general view of the rights of an ordinary servant at that time: Jackson v Union Marine Insurance Co Ltd (1874) LR 10 CP 125. Certainly one can no longer assimilate an employee becoming ill to a chartered ship going aground, as was considered natural in the judgment last cited. Decisions of that era are quite natural and sensible expositions of the terms to be implied in contracts of employment in the laisse faire society of one hundred years ago, when the usual rights and obligations of an employee were quite different from what they are in the highly unionised welfare society of today. But it is a misconception to attempt to weave out of these decisions on the construction of contracts at that time rules of law to be applied automatically to regulate the rights of parties today.

The proper starting point is today the same as that adopted by the judges in those days, namely to ask what are the terms of the contract under consideration, and, where the express terms provide no answer, to ask what terms may be reasonably implied in a contract of the relevant sort, made between people in the position of the parties, assuming them to be reasonable men according to the standards of the day - not the standards of one hundred years earlier.

In this community the legislatures have either directly, or through the arbitration tribunals which they have set up, established a considerable array of minimum standards governing the rights of an employee to absent himself from work. Some of these provisions apply to all employees, including award-free executives, eg. Annual Holidays Act , 1944, Long Service Leave Act , 1955. … One important feature of many of these benefits, e.g. long service leave, annual leave, sick leave and superannuation, is that they commonly depend on, or are proportioned to, continuity of service. In such circumstances, the proposition that, independently of any act of the parties, a contract of employment is automatically discharged by a certain degree of incapacity on the part of the employee bears a totally different aspect from what it did one hundred years ago . Then it merely meant that the employee could not be sued for not carrying out the agreed work, and the employer did not have to go on paying for work which was not being performed, and hold the job open. Today a similar proposition could have a quite unforeseen and arbitrary effect on accruing rights, as is indeed claimed by the defendants in this very case, and would mean the automatic discarding of the disabled employee in a way quite inconsistent with current attitudes and industrial practice. … In short, the usual understanding in many types of employment today is that prolonged incapacity of an employee does not automatically terminate the employment but, subject to sick leave rights, excuses the employee from work and the employer from the obligation to pay, and gives the employer (and perhaps also the employee) the right to terminate the employment . (emphasis added) 77 There will be clear cut cases in which the application of the doctrine of frustration may easily be said to be applied to contracts of employment where an employee becomes incapacitated for work. The clearest case is one involving a prolonged absence from work coupled with uncontroversial proof that the employee concerned will never be fit to return to pre-employment duties and that the employee has exhausted all sick leave and other relevant entitlements. The circumstances applying to these proceedings are, relevantly, different. They are complicated by the failure of the applicant to have provided the respondent with any medical certificate indicating either an unlikelihood or a likelihood of a return to work. That is, taking the evidence at its highest in favour of the applicant, it may not be assumed that the applicant's incapacity was likely to have become permanent, especially as at November 2001. Furthermore, the conduct of the respondent is not indicative of the existence of a supervening event that significantly changed the nature of the applicant's obligations to it. I state this in the sense that the respondent conducted itself as though it took no exception, at least initially, to the applicant's long-term incapacity for work. When it did purport to take exception to this state of affairs, it did so in an ineffectual way and shortly thereafter conducted itself in a manner that was equivocal as to whether the contract of employment remained on foot. In these circumstances I take into account that the conduct of the respondent is not consistent with the presence of circumstances that were so significant as to be said to be directed to the fundamental nature of the employment relationship. This, coupled with the evidence of the applicant's entitlement to sick leave, long service leave, Group Salary Continuance benefits and superannuation benefits in the aggregate militate against the application of the doctrine of frustration to the contract of employment particularly up to and throughout November 2001. Again, these conclusions have been reached taking the evidence in these interlocutory proceedings at its highest in favour of the applicant. 78 For these reasons I reject the respondent's assertion that at any relevant time the contract of employment had been terminated by reason of the application of the doctrine of frustration.

Orders 79 For the reasons set out above, I have concluded that the respondent's motion must be dismissed. There is no reason why costs should not follow the event and I propose to proceed accordingly. 80 I make the following orders: (1) The respondent's strike out motion is dismissed. (2) The respondent is to pay the applicant's costs of the motion in an amount assessed under the Legal Profession Act in default of agreement.

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