What damages are Mr Quirk and Mr Miller entitled to? Should the damages be reduced because of their unwillingness to perform work and pay membership fees, failure to work for a significant period, and in the case of Mr Miller his travel to Scotland in 2015 (issues 7 and 10, appeal ground 5)?
200 These questions are raised by particulars (b) and (c) of appeal ground 5 by which the Federal Union pleaded that the primary judge erred in his assessment of damages by failing to find or consider that:
b. [B]etween 27 April 2015 and 1 January 2017, [Quirk] was not ready, willing and able to work as an Organiser with the [Federal Union] because he was not fit for work and was receiving workers compensation payments, he was not willing to work at the union with the current leadership and he had ceased paying union membership dues as at about 8 May 2015;
c. [B]etween 27 April 2015 and until at least 31 May 2016, [Miller] was not ready, willing and able to work as an Organiser with the Appellant because he was not fit for work and was receiving workers compensation payments, he travelled overseas for a substantial period and he had ceased paying union membership dues as at about 8 May 2015[.]
201 The primary judge awarded Mr Quirk and Mr Miller the full value of their salaries for the residue of their terms of office. He declined to award them other contractual entitlements, such as accrued holiday pay because the claim did not include them.
202 The principle which governs the award of damages at common law for breach of contract is that a party who has suffered a loss by reason of the breach is to be placed, as far as money can do, in the same situation as if the contract had been performed: Robinson v Harman (1848) 1 Exch 850 at 855; 154 ER 363 at 365; [1843-60] All ER Rep 383 at 385 (Parke B); Haines v Bendall (1991) 172 CLR 60 at 63 (Mason CJ, Dawson, Toohey and Gaudron JJ); Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at [13] (French CJ, Gummow, Heydon, Crennan and Kiefel JJ). In a case of wrongful dismissal, the measure of damage is the amount of the wage or salary the employee has been prevented from earning less anything the employee earned or might have earned if "by due diligence" they could have obtained similar suitable employment elsewhere during the relevant period: Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 at 429 (Jordan CJ, Stephen and Markell AJ agreeing at 430).
203 The Federal Union argued that no damages were payable because Mr Quirk and Mr Miller did not prove that they suffered any loss of income as a result of its repudiation of their contracts of employment. It submitted that, at the time their employment was terminated, they had not been performing work for some time and had provided WorkCover certificates demonstrating that they were not fit to do so. It also submitted that their evidence was that they were unwilling to work for the Federal Union under its current leadership and their disillusionment was "manifest" from the time they stopped paying membership dues on 8 May 2015. In addition, it referred to Mr Miller's overseas absences during 2015 after he had been removed from office. It argued that an employer is only obliged to pay employees for work performed or for making themselves available for work (referring to Leggett v Hawkesbury Race Club Ltd (No 3) [2021] FCA 1658; 317 IR 1 at [157] per Rares J and Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 463-4 per Dixon J) and, since neither Mr Quirk nor Mr Miller was ready, willing or able to perform his duties as an organiser, no damages were payable.
204 Mr Quirk deposed that he had been on leave since 11 October 2013, first taking sick leave, then "gardening leave" (being suspended from work on full pay) until 1 January 2014, sick leave again until he made a successful claim for workers' compensation, and never returned to work. He was on workers' compensation for about 12 months before his employment was terminated in April 2015. He deposed that since 20 April 2015 he had "suffered a significant deterioration in [his] mental wellbeing". His marriage broke down in about March 2016 and around the middle of 2016 he suffered "a further breakdown". In cross-examination, however, Mr Quirk testified that in April 2016 he "could do everything, provided [he] was given a safe workplace". He also testified that he was unable to work for the Federal Union from mid-2016 until the beginning of 2019. He did not say he was unable to work anywhere else. No evidence was apparently adduced that he worked anywhere else but the Federal Union did not plead that he failed to mitigate his loss.
205 At the trial Mr Docking, who was appearing at the time for the Unions, submitted that there was no evidence to indicate when Mr Quirk would have been fit enough to defend the charges or to return to work, referring to his "breakdown" in 2016.
206 At [360] the primary judge said of this submission:
Another matter I propose to do nothing with is the Respondents' submission that Mr Quirk had a nervous breakdown in mid-2016. It was said that he would have been unable to work from that time. However, I do not feel that the evidence is sufficient to embark on that kind of analysis. What was the cause of the nervous breakdown? Was it related to Mr Quirk's loss of employment? Would it have been covered by workers compensation? I do not think that a case of this kind can be mounted from the thin evidentiary foundation on which it rests.
207 The evidence did not disclose what, if any, effect the breakdown of Mr Quirk's marriage or the "further breakdown" may have had on his capacity to work. The cross-examination on this question was this:
And I don't want to intrude upon this, other than you mention it in your own affidavit, you say, in mid-2016, you had a breakdown and received extensive treatment with a slow recovery?---Yes.
I'm only reflecting what's in your affidavit. So, as best you can recall, from that date and during your slow recovery, you were unable to work as an organiser with the union?---Well, I had been sacked, so that was self-evident.
So you accept you could not work as an organiser with the union?---Not at that stage, no.
And - - -?---I mean, I - yes, go on.
As best you can recall, how long did that slow recovery take place in terms of weeks or months?---I'm just trying to recall. It would have - what, it's [2020]. It would have taken two years, two and a half years. Beginning of last year, really.
And during all of that period, you were unable, for those reasons you've described, work as an organiser for the union whilst you were undertaking that slow recovery?---Yes.
208 The effect of Mr Quirk's evidence is that, if his contract had not been repudiated, he could have continued to work for the Federal Union provided it adhered to its duty as his employer to provide and maintain a safe place of work. No submission was made that his evidence was false or otherwise unreliable and therefore should not have been accepted.
209 Mr Miller deposed that he took sick leave from 18 September 2014 "due to the stress and sleep deprivation [his] excessive workload was causing [him]". The following day, according to his affidavit, he met with the Australian Federal Police to discuss "problems" with the Union. It will be recalled that it was not until October 2014 that his comments about the Union were published in the media and November 2014 when he was summonsed to appear before the Divisional Executive.
210 On 16 April 2015 Mr Miller faxed to the Federal Union a letter from a psychologist, whom he had consulted three days earlier. The psychologist reported that Mr Miller was suffering from an adjustment disorder with depressed and anxious mood due to a work incident in September 2014 and, "[d]ue to the ongoing psychological distress" was "unfit to attend a summons or further work meetings" for two months. As the primary judge noted at [75]-[77], a WorkCover certificate from a Dr Nguyen indicated that Mr Miller "had 'capacity for some type of employment' from 24 March 2015 to 24 April 2015 and this was for normal hours on normal days", albeit that mediation should take place before he resumed work and that he should avoid contact with certain people and undertake "suitable duties" in a safe working environment consistent with the Union's legal obligations and the relevant work health safety legislation. When Dr Nguyen saw him again on 13 April 2015, four days before the Divisional Executive meeting at which the fatal resolution was passed, Dr Nguyen wrote that Mr Miller suffered from "severe anxiety, depression, insomnia and poor concentration" and was "unfit to attend a summons from 13/4-13/6/2015".
211 Mr Miller travelled to Scotland on a number of occasions in 2015, after his employment was terminated. He explained the circumstances in his affidavit:
Between 20 April 2015 and 31 May 2016, I was unemployed. My mother was diagnosed with Alzheimer's disease in 2015 and I returned to Scotland several times because I am her only son and had to attend to her medical treatment. During this time, I made about [a] dozen applications to various construction companies to be a Safety Officer but was unsuccessful. I applied for positions through "LinkedIn" and "Seek.com" and was informed by each of the prospective employers by email that I was not successful in obtaining an interview.
212 In cross-examination he was asked how long he was in Scotland on each occasion. This was the exchange:
I had to go back to Scotland, and I stayed - I was over there for a while, because mother had - - -
Yes?--- - - - Alzheimer's.
That's in your affidavit about your mother?---Yes.
And I'm not trying to intrude on personal - - -?---Yes.
- - - issues unduly, but can you explain that - given you raised it - for how long, on each occasion, were you back in Scotland?---The first time would be maybe - I think it might have been, say, four months or five months or something like that, I think. And then I had to come back, because the - I think Chris McArdle told me there was - we had to go to court over this issue, and then I had to leave and come back here when ..... yes, as far as I remember.
So you were back in Australia just for a short period? How many weeks? Or days?---No. I was back - I was back for a reasonable period of time, I think, then. I had to go back again because she died and then I had to go back for the burial, but I did stay for a period of time where I think maybe I got employed then with the bus companies, but then I had to go back again. So I was back and forward.
Yes. You indicate, "I returned to Scotland several times," you've dealt with how many months for the first occasion. The next occasion, how long were you back in Scotland for?---That wasn't as long. Gee. My - it would be - it would definitely be under a month.
And was there another occasion? You use the expression "several"?---Yes. I thought there was, but I'm just trying to think. No. I think it was twice. Yes.
It might have been more and you've forgotten?---No. I think - I'm pretty sure it was twice. Yes.
213 On 31 May 2016 he commenced working casually as a coach/bus driver. He testified that he was not well enough in 2016 to nominate for a further term as an elected organiser.
214 The Federal Union also submitted that Mr Quirk and Mr Miller were not willing to perform work for it under its current leadership. It contended that their disillusionment with the Federal Union was "manifest from their cessation of payment of membership dues".
215 The primary judge rejected a submission to the same effect (at [358]). He did so because he considered it clear that the cessation of their membership was "part of the sequelae flowing from the termination of their employment and ought not to be considered as part of the counterfactual". No persuasive case was made to suggest that this conclusion was not open to his Honour. Even so, they stopped paying membership fees roughly three weeks after their employment was terminated. The conclusion that they did so for that reason is irresistible.
216 The Federal Union pointed to the following exchanges in the cross-examination of Mr Quirk (at T220/16-46 and T221/21-32):
Assuming that was provided, which work could you do? I'm - otherwise - - -?---Assuming that that had been provided and I was happy with it, okay. Let's go through this. You - you couldn't honestly be a member of the CFMEU and perform any of these duties. That's my honest answer, your Honour.
Are you saying - I appreciate you were on workers comp by 10 July 2014. You never returned to work, did you?---No.
So you don't know what work - - -?---Okay. Well - - -
- - - people were performing
HIS HONOUR: Let me give an example. Let's say Mr Docking had a car accident and he was off work for a couple of months, and then he got a medical certificate that said he was fit to come to court three days a week, but, unfortunately, one of the people he had to appear in front of was me and his particular view was that I was such a stroppy judge to appear in front of he couldn't possibly appear in front of me, and he has got this medical certificate which says he can work three days a week. What's really being asked, I think, is Mr Docking's case, what are the kind of duties the medical certificate was talking about that he could do and not what particular difficulties he might have with me. I don't know if I've explained that clearly enough?---I think it makes perfect sense - - -
Okay. Well - - -?--- - - - what you've said, your Honour. But what I'm saying is that, to paraphrase that thing, if - if you like, Mr Docking couldn't work with any judge in the Federal Court because Mr Docking was of the opinion that the court was corrupt and wasn't carrying out its functions.
Okay. So you do get the point. Okay. I shall pass that on, Mr Docking.
…
THE WITNESS: If I felt that I had a safe working environment that was non-corrupt, I could have done all of this. I had none of that, so it was impossible to go back three days and do it. To give you an example of something that is pretty simple:
…become familiar with and understand the workings of the union's administrative procedures in order to provide quality information and service to members.
I was fully familiar with the union's administrative functions, and I was well aware that they weren't being obeyed and people were being victimised contrary to those policies, which was why I wanted a safe working environment.
217 I do not accept the submission about Mr Quirk and Mr Miller not being willing to work under the Federal Union's current leadership.
218 First, the submission goes further than what is pleaded in the notice of appeal. The point is contained only in ground 5(b), which relates solely to Quirk.
219 Second, the passages in the transcript upon which the Federal Union relied do not establish that Mr Quirk was not willing to work under its current leadership. It is equally possible that, but for his removal from office and his consequent termination, Mr Quirk would have remained in his position as an organiser and worked to topple the leadership at the next election.
220 The point about Mr Miller's absences in Scotland in 2015 was all but abandoned in oral argument. At most it can be said that it was faintly put. Mr Gibian SC, for the Union, merely submitted (at T194/39-46):
And there's also an issue about him being overseas as well, for various periods. Now, I'm not sure how highly I can put that, because there might be a question about whether he would have done that or not done that if he had still been an officer. So I'm not sure I can put that. I mean, his mother was unwell, as I understand it, and he may have visited, but maybe he wouldn't have gone for as long if he had still been engaged by the union; I don't know. But that's the evidence so far as he's concerned.
221 In any event, had Mr Miller still been employed at that time, there is no reason to suppose that he would not have been able to take paid leave on those occasions, whether compassionate, annual or long service leave. He had worked for the Union for nearly 30 years so it is likely that he would have had at least some available accrued leave.
222 Mr Quirk and Mr Miller made no submissions about the significance (or otherwise) to the assessment of damages of their pre-existing unfitness for work.
223 The general rule in contract law is that damages are assessed as at the date of the breach although there are many exceptions and evidence as to income actually lost is obviously admissible: Wenham v Ella (1972) 127 CLR 454 at 473-4 (Gibbs J).
224 In the present case it is clear from the evidence that both men received workers' compensation and/or sick leave for a long period that predated the repudiation of their contracts of employment and continued until at least April 2016. I take it to be common ground that the workers' compensation payments are not refundable. Nor are sick leave payments. The primary judge took neither of these matters into account. It is trite that a party may not recover twice for the same loss: see, for example, Clark v Macourt (2013) 253 CLR 1 at [26] (Crennan and Bell JJ) and at [60] (Gageler J). A party is not entitled to be put in a superior position by an award of damages: Commonwealth v Amann Aviation Pty Ltd (1992) 174 CLR 64 at 82 (Mason CJ and Dawson J). Nor did his Honour consider whether Mr Quirk and Mr Miller were in fact incapable of working.
225 Nevertheless, I have come to the conclusion that the primary judge did not err by declining to take into account the inability of both men to work during that period.
226 I have come to that conclusion essentially for two reasons.
227 First, at trial, save for the argument about Mr Quirk's breakdown, the Unions did not contend that, if their contracts had been breached, Mr Quirk and Mr Miller had suffered no damage (or that their damages should be reduced) because they were unfit for work throughout what remained of their terms of office.
228 Second, the burden of proving that they were unable to work or earn income falls upon the Unions. Save for Mr Miller's earnings from his casual work as a coach driver, it does not appear that the Unions ever discharged that burden. Certainly no mention of the amounts was made in either the written or oral submissions. Nor was the Court referred to any evidence of them.
229 At the hearing of the appeal the parties assumed that the burden on the Unions was only an evidential one. That was a false assumption. As with the burden of proving a failure to mitigate loss, however, the burden of proving that the loss has been mitigated is a legal one.
230 As Giles JA explained in Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1 (an authority to which neither side referred the Court) at [72]:
The wrongfully dismissed employee's loss is measured by the salary and wages and other contractual benefits of which he has been deprived less the salary or wages and other financial benefits which he received or acting reasonably should have received from the exercise of earning capacity freed up by the dismissal. But it is not correct that the employee has the onus of proving his loss so measured.
231 After a careful analysis of the case law and some of the leading texts, his Honour concluded that, as damages are assessed as at the date of the breach, the burden lies with the employer to prove both "avoidable loss" and "avoided loss". Both McColl JA (at [76]) and Young CJ in Eq (at [77]) agreed. As Young CJ in Eq put it at [94], in that case, where the damages as at the date of dismissal were the wages the plaintiff would have earned for the period during which notice should have been given, that is what the plaintiff had to prove; "[a]ny offset as a result of what happened afterwards is for the defendant".
232 That the burden of proof is the legal burden is abundantly clear from Munce v Vinidex Tubemakers Pty Ltd [1974] 2 NSWLR 235 at 239. There, Glass JA observed (Moffitt P and Hutley JA agreeing at 236-7):
There is authority of long standing which establishes an exception to the principle that the plaintiff bears the onus of proving all matters relating to damages. The exception relates to any disputed question which is truly a matter of mitigation of damages. In relation to questions properly so classified the defendant ... must not only introduce evidence that the plaintiff has failed to minimize his loss, but also persuade the jury that the balance of testimony favours this conclusion…
233 Quirk deposed that he received workers' compensation payments for 12 months before his employment was terminated in April 2015 and for a further 12 months. It is reasonable to infer that this was a reference to weekly payments rather than payments of medical and like expenses. But the basis upon which they were paid is unclear. That is to say, it is unclear whether the incapacity for work throughout the period in question was total or partial.
234 Miller deposed that he had intended to stay on in his role at the Federal Union until he turned 70 as he liked it and was good at it.
235 On the face of things Mr Quirk must have had some capacity for work at least for a period after his employment was terminated. He certainly appears to have thought he did, as he deposed that for the first five months after his termination he applied for "around 150 jobs, around 8 applications per week", mostly for "jobs as a safety officer on construction sites", work in which he was experienced. Since then, he said he had embarked on a course with a view to retraining as a cabinet maker.
236 Similarly, Mr Miller deposed that, after his employment with the Unions was terminated, he also applied for work as a safety officer and made about a dozen applications to various construction companies but could not secure an interview. It was as a result of these abortive efforts to obtain alternative employment in the construction industry that he decided to seek work as a bus driver.
237 It does not appear that Mr Quirk and Mr Miller were totally unfit for work before the repudiation. The minutes of the meeting of the Divisional Executive on 17 April 2015 record that Mr Quirk had produced a WorkCover certificate indicating that he was available for work three days a week and that Mr Miller had produced one saying he was fit to resume work. To the extent that they received workers' compensation thereafter, the evidence is entirely opaque about the reasons for those payments. No attempt appears to have been made to prove that the workers' compensation payments made after the repudiation of their contracts resulted from an injury sustained or a disease contracted beforehand, rather than from the impact of the termination itself. For all we know, the pre-existing injury could have been aggravated or exacerbated by the repudiation and its consequences.
238 Moreover, the Unions abandoned their contention (appeal ground 5(f)) that the primary judge erred by failing to reduce damages on the basis that they had received workers' compensation during the period from the termination of their employment until the end of their four year terms.
239 The final matter relates to the calculation of the amounts awarded.
240 The primary judge calculated damages based on a gross salary for each of Mr Quirk and Mr Miller of $112,426.09. In their submissions in reply on the cross-appeal, Mr Seck and Mr Whitbread took issue with the figure, submitting it was unreliable because it was based on an estimate by "the Respondents' counsel" based on a single payslip. They asked the Court to reassess damages based on other evidence, which would have the effect of awarding about $200 less to Mr Miller and about $4,000 more to Quirk. I would not entertain this submission. At the trial Ms Byrnes, who then appeared with Mr Seck, told the Court:
In the schedule of loss, we exchanged with the respondent. We have set the gross salary as $112,426.09 per annum and we understand there's no dispute with that.
241 The primary judge could scarcely be said to have fallen into appealable error because he accepted the agreed position of the parties. In any event, the submission was made in response to ground 5(d) of the notice of appeal which the Unions abandoned and is therefore irrelevant.