Employment - Breach of employment contract - Entitlement to damages - Quantum of damages - Duty to mitigate loss - Damages for loss of use of company vehicle and mobile telephone - Long service leave entitlement - Interest - Turns on own facts

Appellant (Plaintiff) (Cross-respondent) : Mr T R Stephenson

Respondent (Defendant) (Cross-appellant) : Mr R J Ainslie

Appellant (Plaintiff) (Cross-respondent) : Paula Martino

Respondent (Defendant) (Cross-appellant) : Mallesons Stephen Jaques

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1 WALLWORK J: I agree with the reasons for judgment of Steytler J and with the orders proposed by his Honour. There is nothing I wish to add.

2 STEYTLER J: The appellant was employed by the respondent as an executive manager from 24 July 1996 until 4 July 1997, upon which date he was dismissed.

3 The appellant's dismissal was effected by a three stage process. At a special meeting of the Council of the respondent held on 2 July 1997 a unanimous resolution was passed endorsing the recommendation of the respondent's Chief Executive Officer, Mr Robert Smillie, to dismiss the appellant. Then, by letter dated 3 July 1997 Mr Smillie told the appellant of the resolution and said that he intended to implement the resolution but that he was "in the process of taking legal advice in relation to the method of implementation". Finally, the respondent, by Mr Smillie, wrote to the appellant on 4 July 1997 as follows:

"Dear Chris

I refer to my letter dated 3 July 1997. After seeking legal advice it is now my intention to terminate your employment effective from 5 pm today, Friday 4 July 1997.

Enclosed is a cheque for $4752.05 covering the following:

TOTAL: $4752.05

Please note:

Sick leave days accrued to 4/7/97 10 days

Sick leave days taken to 27/6/97 13 days

Arrangements for the collection of the car, master key, mobile, fuel card and your personal belongings will be co-ordinated through John Robertson.

Yours sincerely"

4 The appellant did not believe that the respondent was entitled to dismiss him in this way. He commenced proceedings in the Industrial Relations Commission. He then discontinued those proceedings and commenced the action which has become the subject of this appeal.

5 In his reamended statement of claim the appellant has raised a number of alternative causes of action against the respondent. So far as is relevant to these proceedings, however, he has there alleged that he was employed, on about 18 July 1996, pursuant to the terms of a partly oral and partly written agreement and that his employment was terminated in breach of that agreement. He has pleaded (par 2) that the written part of the agreement comprised a "pro forma document" given to him at one of his interviews. Clause 8 of that document reads as follows:

8.1 Automatic termination at end of fixed period

The employment of the Officer shall, unless the Term is extended, terminate on the expiry date specified in item 4 of the Schedule without the requirement of either party giving notice.

8.2 Termination by Local Government: Officer's Default

The Local Government may terminate the Officer's employment in terms of this document at any time by giving notice in writing to the Officer specifying a period of notice not less than that prescribed by the Award to be given (or, in the case of paragraph (b), without notice or with less notice) if the Officer:

(a) breaches any of the provisions of this document and does not remedy that breach within 14 days of the Local Government serving written notice of the breach upon the Officer;

(b) is guilty of any conduct that justifies instant dismissal (including, without limitation, malingering, inefficiency or neglect of duty);

(c) is guilty of any misconduct related to the Officer's employment;

(d) fails to substantially measure up to the Performance Criteria;

(e) becomes bankrupt or makes any arrangement or composition with the Officer's creditors;

(f) becomes a mentally incapacitated person;

(g) is convicted of any criminal offence which materially affects the Position; or

(h) becomes permanently incapacitated by reason of accident or illness from performing the Officer's duties under this document (and for the purpose of this paragraph, incapacity in excess of ninety (90) consecutive days or for an aggregate period of ninety (90) days in any period of twelve (12) months is deemed to be permanent incapacity) provided that the Local Government may not terminate the Officer's employment in terms of this document pursuant to this paragraph (g) unless and until the Officer no longer has any entitlement to paid sick leave.

8.3 Termination by the Officer: Specific Reason

The Officer (without prejudice to any other rights of action which he may have) may terminate the Officer's employment in terms of this document at any time without prior notice if the Local Government breaches any of the provisions of this document and does not remedy that breach within fourteen (14) days of the Officer serving written notice of the breach upon the Local Government.

Either party may terminate this contract by giving to the other three (3) months' notice in writing or in the case of Council, paying three (3) month's [sic] total remuneration package in lieu of notice, provided that if the Council terminates this contract for any other reasons than those contained in sub-clauses 1 or 2 the Council shall pay to the Officer the balance of the remuneration due under this contract in addition to any other entitlements including but not limited to accrued annual leave and long service leave."

The appellant took up the position that neither of cls 8.1 or 8.2 was applicable to the circumstances of the termination of his employment. He consequently pleaded (par 6) that in breach of the employment contract the respondent failed to terminate that contract in accordance with its terms "which require the ... [respondent] to pay the balance of the remuneration due under the Contract ... and the notice of dismissal amounted to a repudiation of the Contract by the ... [respondent]". He also pleaded (par 6) that he "did not accept the repudiation of the Contract by the ... [respondent]".

6 In par 7 of his reamended statement of claim the appellant went on to allege that, as a result of the respondent's breach, he suffered loss and damage which, he said, was comprised by the "loss of total remuneration package for the balance of the term of the Contract", particulars of which were provided. The prayers for relief claimed, amongst other alternatives, payment of the sum of $271,392.95, being the total of the amounts particularised in par 7 of the statement of claim, "plus long service leave pro-rata", and, in the alternative, "damages for breach of contract". Interest at the rate of 8 per cent per annum was also claimed pursuant to s 32 of the Supreme Court Act 1932. The interest was claimed from 4 July 1997 until payment or judgment.

7 The respondent, in its further reamended defence, admitted that in about July 1996 an agreement to employ the appellant came into existence between the appellant and the respondent but otherwise denied all that had been pleaded by the appellant. It said (par 12) that the appellant's conduct and performance during the course of his employment was in breach of the employment agreement and such as to constitute grounds for the termination of his employment for the purposes of the Local Government Officers (Western Australia) Award 1988 to which, it said (par 5), the appellant's employment was subject. The respondent also pleaded (par 13) that the appellant's conduct in breach of the employment agreement was such as to destroy the necessary trust and confidence essential to the employment relationship between the appellant and the respondent and (par 15) that the respondent lawfully terminated the appellant's employment in accordance with the terms of the award. There are various other pleas which it is unnecessary, for present purposes, to recite save, perhaps, to say that the respondent has alleged (par 17A) that the appellant "failed to mitigate his purported loss".

8 The appellant won at trial. After a careful analysis of the many issues with which he had been faced, the trial Judge arrived at a number of findings which are critical to the outcome of the appeal.

9 The first was that the "pro forma document" referred to in the appellant's reamended statement of claim formed part of his contract of employment.

10 The second was that (and this was common ground at the trial) the cash component of the appellant's salary was $65,885 but he was, in addition, entitled to a number of benefits. These included a 6-1/2 per cent contribution by the respondent to the appellant's superannuation, the use of a fully maintained motor vehicle for business and private use (for which a contribution of $59.80 per fortnight was to be paid by the appellant), a fully paid mobile phone and payment of some professional fees which, his Honour said, was "shown in the documentation as $300 per annum". It seems also to have been common cause, as it still is, that the vehicle allowance was valued at $14,000 per annum and that the superannuation contribution was worth $5,000 per annum. As regards the mobile phone it seems that the appellant contended, at the trial, that this was for both personal and business use but the respondent contended that it was for business use only.

11 The third of the findings to which I have referred was to the effect that the contract was one for a five year term commencing on 23 July 1996 and ending on 24 July 2001.

12 Next, his Honour concluded that there was no substance to the respondent's allegations of misconduct. He found that the appellant had done nothing which should justify his dismissal for breach of his employment contract.

13 These findings led his Honour to conclude as follows:

"Subject to the question of the plaintiff's obligation to mitigate his damages, to which I will now turn, it follows in my opinion, that on the contractual claim, the plaintiff is entitled to the payment out of the balance of the contract as provided in the original contract given to him by Smillie at his first interview, which he was told was the generic document that would apply to his written contract and by which he was to be bound."

14 The "generic document" to which his Honour referred is the "pro forma document" relied upon by the appellant.

15 His Honour then turned to the question of mitigation of damages, as he had foreshadowed. He mentioned that the appellant had obtained part-time employment since the middle of December 1988, "doing casual cashier work as a night attendant at a service station", where his income had averaged $300 a week. However, he said, there was "a distinct possibility that the ... [appellant] may obtain more lucrative employment in the future ... ". His Honour then went on to arrive at the following conclusions:

"[111] Taking all of those matters into account, it is necessary to assess the damages to which the plaintiff is entitled. In that respect it is to be recalled that the plaintiff's remuneration consisted of an annual salary of $65,885, in addition to certain allowances. The evidence establishes that the plaintiff was to be provided with a motor vehicle for use both in the course of his employment and for private use. In my opinion some allowance needs to be made for the fact that, as part of his remuneration, the plaintiff would have had a motor vehicle for private use. In addition, the plaintiff was to be provided with a mobile phone and superannuation. In my opinion the plaintiff is entitled to the superannuation contribution but not to an allowance for the mobile phone which was provided to him for use in his employment. As to the motor vehicle, an allowance of 50 per cent of the vehicle use would be appropriate. Valuing that vehicle allowance at $14,000 as the plaintiff did, (the plaintiff's document book 19), 50 per cent = $7,000, to which must be added $5,000 for superannuation, giving a total of $77,885.

[112] Whilst the question of damages is not capable of precise calculation, using these figures and rounding off periods as best I can, the calculations work as follows:

(a) the plaintiff was employed from 19 July 1996 until terminated on 4 July 1997, to which should be added the period to trial, being a total of two years at $77,885;

(b) the plaintiff's evidence indicated that the employment that he had as a night attendant in a service station commenced in December 1998 so that from two years' salary at $77,885 per year totalling $155,770, there should be deducted $7,500 representing six months' employment to the date of trial at $15,000 per year, giving a damages figure of $148,270;

(d) for future loss from trial to the end of the contract, I would deduct 30 per cent to reflect not only the plaintiff's present income but also the possibility of his obtaining more remunerative employment. That period is roughly a further two years at $55,521, or a total of $111,042. To that should be added the pre-trial loss of $148,270, giving a total of $259,312 from which there should be deducted $4,752.05 being the sum paid to the plaintiff on termination of his employment."

16 Notwithstanding that his Honour had been invited to award interest on the damages he did not do so and nor did he mention this issue.

17 The respondent appealed against the judgment and the appellant lodged a cross-appeal. The appeal has since been discontinued and the cross-appeal has consequently become the appeal. However, in the course of the somewhat tortured progress of this matter, the respondent (the original appellant), during the course of the appeal, sought, and was given, leave to lodge a cross-appeal.

18 The grounds of appeal are many and varied. They attack his Honour's assessment of damages. The appellant contends, firstly, that his Honour should have found that the appellant was entitled to all that cl 8.4 of the pro forma offered him and that there should have been no discount for other income earned by him or for the contingency that he might find other, more remunerative, employment. He also makes the subsidiary contentions that he should have been awarded the whole of the sum of $14,000 per annum attributed to the value of his use of the motor vehicle and the sum of $1,500 per annum which, the appellant said, was the value attributable to his use of the mobile telephone. In addition, he says, he should have been given a sum reflecting his entitlement to long service leave payable at the end of the contract term. Finally, he says that interest should have been awarded on some, at least, of the damages awarded to him.

19 The respondent, in its cross-appeal, raises two grounds, as follows:

"1 If it is held on this appeal that His Honour's finding [was] that the appellant's termination was effected pursuant to Clause 8.4 of the appellant's contract, then the respondent says such finding was wrong in law in that the appellant's contract was not terminated pursuant to Clause 8.4, but was wrongfully terminated by the respondent's wrongful repudiation of it.

2 In those circumstances, His Honour's assessment of damages should be upheld on the grounds of wrongful repudiation."

20 As counsel for the appellant developed his argument on the hearing of the appeal (and I suspect it was developed somewhat differently to the manner in which it had been put to the learned trial Judge) his principal propositions are relatively simple. There are two of them. They are alternative propositions. The first assumes that the contract of employment subsists. Upon this basis the appellant contends that cl 8.4 thereof is applicable to the termination of his employment. This, the appellant says, is so because the termination was "for ... other reasons than those contained in sub-clauses 1 or 2" of cl 8. Consequently, he contends, he is contractually entitled to be paid the balance of the remuneration payable under the contract together with the value of any other entitlements afforded him by it for the remainder of its term. The second proposition assumes that the contract of employment was brought to an end by the appellant's acceptance of what amounted to a repudiation of it by the respondent. Upon this assumption, the appellant contends that the damages to which he became entitled as a consequence are equal to the amount which he would have been paid had the contract of employment been terminated pursuant to the provisions of cl 8.4 thereof. This, he contends, is so because the contract would have been terminated under that clause if it had not been repudiated by the respondent.

21 The respondent's position is essentially that, if his Honour found that the termination of the appellant's employment was governed by cl 8.4 of the "pro forma", then he erred in so doing in that there was no termination pursuant to that clause but, rather, a wrongful repudiation of the contract of employment in respect of which his Honour had correctly assessed damages.

22 Clause 8 of the "pro forma" document provided what seems to me to have been intended to be a comprehensive code with respect to the termination of the employment relationship.

23 As will already be apparent, Clause 8.1 provided for automatic termination at the end of the fixed period of five years. Clause 8.2(a) provided for termination by the respondent in the case of the appellant's default. It provided that the respondent was entitled to terminate the appellant's employment at any time by giving notice in writing, specifying a period of notice of not less than that prescribed by the applicable award, if the appellant was to breach any of the provisions of the "pro forma" document and if he did not remedy that breach within 14 days of service upon him of a notice calling upon him to do so.

24 Clause 8.2(b) gave to the respondent the right to terminate the appellant's employment without notice, or with less notice than was provided by the award in cases (some of which are specified) in which he was guilty of conduct that justified instant dismissal.

25 Clauses 8.2(c) to (h) provided that the respondent was entitled to dismiss the appellant by written notice, specifying a period of notice not less than that prescribed by the award, in various circumstances including misconduct on the part of the appellant, failure substantially to measure up to specified performance criteria, bankruptcy, the commission of a material criminal offence and mental or permanent incapacitation.

26 Clause 8.3 entitled the appellant (without prejudice to any other rights of action which he may have) to terminate his employment at any time without prior notice if the respondent was to breach any of the provisions of the "pro forma" document and if it was not to remedy that breach within 14 days of service upon it of a notice requiring it to do so.

27 Clause 8.4 provided for termination of the contract of employment itself (and thereby also the employment relationship) by either party for "Other Reason".

28 It is important to notice that cl 8.4 speaks of termination of the contract rather than termination of the employment relationship, whereas each of cls 8.1, 8.2 and 8.3 speaks of termination of the "employment" of "the Officer", being, of course, the appellant. Once that is understood it becomes reasonably apparent that the effect of the clause is that either party may, in any circumstance, terminate the contract itself upon three months' notice (or, in the case of a termination by the respondent, by paying three months' total remuneration package in lieu of notice), provided that, if the reason for termination is not one of those identified in cl 8.1 (and it is difficult to see why three months' notice would be given in that event) or cl 8.2 (which would, if the respondent preferred, allow termination of the appellant's employment without notice or, as the case may be, with only that notice which is provided for by the award), then the respondent would have to pay to the appellant the balance of the remuneration due under the contract plus any other entitlements.

29 The distinction between termination of the employment relationship, on the one hand, and termination of the contract of employment, on the other, is important. While there is no doubt that a wrongful dismissal terminates the employment relationship, the contract of employment itself continues until such time as the employee accepts the repudiation constituted by the wrongful dismissal (and a wrongful dismissal will almost invariably amount to a repudiation: see Gunton v Richmond-upon-Thames LBC [1981] 1 Ch 448 at 468) and puts an end to the contract. (See Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435 and Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 427.)

30 There is, in this case, no doubt that the employment relationship has been terminated. So much is obvious from the facts recounted at the outset of these reasons. However it is at least doubtful whether the contract of employment has itself been terminated.

31 The writ, when issued, was endorsed with a statement of claim. The appellant therein pleaded the terms of his contract of employment (including cl 8.4 thereof), the circumstances of his dismissal and, as I have earlier mentioned, his contention (in par 6) that, in breach of the contract, the respondent had "failed to terminate ... [that contract] in accordance with its terms". I have also mentioned that the appellant pleaded that his loss was that "of a total remuneration package for the balance of the term of the contract" and that particulars of the value of that package were given. The sum particularised (which has since been amended) was that which was claimed in the prayers for relief although there was, as I have mentioned, an alternative claim for damages for breach of contract. Nowhere did the appellant plead that he accepted a repudiation on the part of the respondent. Rather, his statement of claim seems to me plainly to have been premised upon the assumption that the contract of employment remained on foot.

32 The situation has not altered in that respect. Instead, the position has become even clearer. I have earlier mentioned that, in par 6 of his reamended statement of claim, the appellant pleaded that, while "the notice of dismissal amounted to a repudiation of the Contract by the ... [respondent]", the appellant "did not accept the repudiation of the Contract".

33 Moreover, we were not pointed to anything in the evidence which, in my opinion, could be said to have amounted to an acceptance, by the appellant, of the respondent's repudiation. On 10 July 1997 the appellant wrote to Mr Smillie, acknowledging receipt of the latter's letters dated 3 and 4 July 1997 and saying that the cheque for $4,752.05 was "received without prejudice to any rights, claims, or actions, that I may pursue". There is nothing in that letter which amounts to the acceptance of a repudiation. Rather, it is equivocal as regards the position which the appellant will adopt. It is, no doubt, true that the appellant thereafter looked for other work and, indeed, succeeded in finding it. However, the employment which he found was only that in the form of casual cashier work as a night attendant at a service station. While it will ordinarily be the case that the finding of other work by a wrongfully dismissed servant will amount to acceptance of a repudiatory breach, leading to the termination of the contract of service (see Gunton, above, at 468), that is because the finding of that work will, ordinarily, disable the dismissed servant from further performing his contract of employment. That was not the situation in this case, having regard for the casual nature of the appellant's employment and the fact that it was to be performed at night.

34 It follows, in my opinion, that the contract of employment could not properly have been found to have been terminated. That being so, the appellant never became contractually entitled to be paid the remuneration and other benefits referred to in cl 8.4. Indeed, the appellant would not have become so entitled even if the respondent's repudiation had been accepted by the appellant. The "balance of the remuneration due" under the contract is only payable under that clause in the event of a termination by the respondent for reasons other than those specified. The termination of the contract by an acceptance, by the appellant, of a repudiation by the respondent does not fall into that category.

35 It also follows that, because cl 8.4 was not directly applicable to the events which occurred, the appellant's only entitlement was one to damages arising out of the respondent's breach of the contract of employment. That is so because, even if an employee who is wrongfully dismissed chooses to keep his contract of employment on foot, he cannot claim remuneration in respect of any period after the wrongful dismissal because the right to receive remuneration for services is dependent upon the services having been rendered. (See Byrne, above, at 428, per Brennan CJ and Dawson and Toohey JJ.)

36 The damages to which the appellant became entitled were equivalent to the wages that he would have earned under his contract from the date of his dismissal to the end of the term set by the contract (cf Gunton, above, at 469). However, he was under a duty to mitigate his loss (see Byrne, above, ibid, and Gunton, above, at 468) and his damages were required to be reduced by so much as he was able to earn as a consequence of his attempts to mitigate his loss.

37 It seems to me that these were the principles which were applied by the trial Judge when he came to assess the appellant's entitlement. His Honour calculated the full amount (including the value of non-cash benefits) which would have been earned by the appellant pursuant to his contract of employment had it not been breached by the respondent. He then deducted from that amount the income which the appellant had earned from his casual work and the income which he calculated, as best he could, was likely to be earned by the appellant from future employment. I am consequently not persuaded that he erred in the approach which he adopted in this respect.

38 I should add that no objection has been made to his Honour's estimate of the income earned by the appellant from his casual work or of that which he was likely to earn from future employment. While there was, in this last respect, a ground of appeal which contended that the trial Judge failed to take account of specified evidence, this was not pursued in oral submissions. I am not, in any event, persuaded that his Honour made any such error or that he otherwise erred in the exercise of his discretion in this regard.

39 That brings me to the second of the propositions advanced on behalf of the appellant, being that to the effect that, if the appellant should be unsuccessful in making good the first of those propositions, and if the contract should be found to have been terminated by the appellant's acceptance of the respondent's repudiation, the measure of damages recoverable by the appellant equated, in any event, to his entitlement under cl 8.4 of his contract of employment. That, as I have earlier mentioned, is submitted to be so because, the appellant contends, the respondent would, if it had not unlawfully dismissed the appellant, inevitably have terminated the contract of employment pursuant to the provisions of cl 8.4.

40 I have already arrived at the conclusion that the contract of employment could not properly have been found to have been terminated by the appellant's acceptance of the respondent's repudiation of it. However, the argument advanced in this regard by counsel for the appellant applies equally, if it can be made out, to the situation in which the contract of employment subsists but in which the appellant is entitled to damages arising out of the respondent's breach in wrongfully terminating his employment under it.

41 Counsel for the appellant relied upon three matters in support of his contention that it should be inferred that, if the respondent had not unlawfully dismissed the appellant, it would have terminated his contract of employment pursuant to the provisions of cl 8.4 thereof.

42 The first is a report which was prepared by Mr Smillie for presentation to the special meeting of the respondent's Council which took place on 2 July 1997. In that report (which is dated 2 July 1997) Mr Smillie recorded that responses which had been made by the appellant to allegations made by Mr Smillie diminished the appellant's credibility as he appeared to be "continually shifting ground". More importantly, Mr Smillie there recorded that the incidents of which he complained were illustrative of an ongoing pattern of behaviour which had resulted in a complete breakdown of trust between the appellant and the respondent's "Executive Team", including Mr Smillie. He said that, having taken advice from "both the Employee Relations Manager and the Solicitors briefed in this matter", he had reached the conclusion that the only appropriate course of action was "to terminate the services of ... [the appellant] as an employee" of the respondent. The terms of this report are said by counsel for the appellant to illustrate the extent of the breakdown in the relationship between the appellant and Mr Smillie, and the unworkability of an ongoing employment relationship between the appellant and the respondent.

43 The second is the terms of the resolution which was passed by the respondent's Council after considering Mr Smillie's report. That resolution was to the effect that the Council had appointed Mr Smillie as its Chief Executive Officer to manage the respondent's day-to-day operations and to be responsible for the employment, management, supervision, direction and dismissal of other employees, that the Council's own role was that of setting strategy and vision and that the Council endorsed Mr Smillie's recommendation to dismiss the appellant. Counsel for the appellant contends that the terms of this resolution are demonstrative of a willingness on the part of the respondent's Council to endorse any management decision taken by Mr Smillie, including one to get rid of the appellant at any cost as, he submitted, Mr Smillie plainly wished to do.

44 The third is that earlier, on 6 June 1997, there had been an unsuccessful attempt at mediation between Mr Smillie and the appellant which, counsel for the appellant submitted, further illustrated the extent of the breakdown in the relationship between the two of them.

45 I am not persuaded that these three matters are enough to justify the drawing of the inference contended for by counsel for the appellant. There can be no doubt that Mr Smillie wanted to be rid of the appellant. However, there is, in my opinion, insufficient in the evidence to suggest that the respondent's Council would have agreed to the termination of the appellant's contract of employment in circumstances in which the respondent would, as a consequence, have become obliged to pay to the appellant a sum in excess of a quarter of a million dollars.

46 Indeed, the minutes of the meeting of 2 July 1997 disclose some hesitation on the part of the Council members even in authorising the dismissal of the appellant upon the basis upon which that was done. They record that one councillor (Cr Bonnie) raised enquiries as to the time frame it took to raise certain matters with the appellant and that another (Cr Jackman) had enquired whether there was "a formal probationary period and appraisal sheet". These enquiries appear, on the face of it, to be inconsistent with a desire to get rid of the appellant at any cost (as, indeed, does the fact that there had earlier been an attempt at mediation). More significantly, the minutes also record that a third councillor (and seven, including the Mayor and Deputy Mayor, were present) said that he "felt that the matters outlined ... were petty and that there was a personality clash between ... [the appellant] and the Chief Executive Officer". It is also apparent from the minutes that the discussion in respect of the appellant's dismissal lasted from 7.38 pm until 10.19 pm, a period of almost 3 hours.

47 It is also important to mention that, at the conclusion of his report, Mr Smillie recommended, not only that the appellant be dismissed, but also that the dismissal "take place at the time regarded as appropriate by the Chief Executive Officer taking into account legal advice" and that the appellant "be paid any entitlements in accordance with the Local Government Officers Award". Advice had by then been sought from the respondent's solicitor, Mr Stephen Kenner. He had presumably advised the respondent that the appellant's employment should be terminated on two weeks' notice, it being at least implicit in what was said by Mr Smillie that he was acting in accordance with the respondent's solicitor's advice. Moreover Mr Kenner was present at the Council meeting on 2 July 1997 (as were Mr D Moss, the Director, Labour Relations of the Western Australian Municipal Association and Ms P Lewis, the respondent's Employee Relations Manager).

48 It consequently seems to me not to have been open to the trial Judge to have found that the respondent's Council, had it known that it could not lawfully dismiss the appellant in the way in which that was done, would have incurred a very large expenditure of over $250,000 simply in order to terminate his employment rather than take some other measure, short of a dismissal, as, perhaps, the making of changes to the appellant's duties or having him report to someone other than Mr Smillie.

49 It follows that I am not persuaded that either of the appellant's principal propositions has been made good.

50 That brings me, next, to the subsidiary contentions which were advanced on behalf of the appellant.

51 The first of these is that to the effect that the trial Judge erred in awarding to the appellant only 50 per cent of the value of $14,000 attributed to his entitlement to use the motor vehicle provided by the respondent.

52 It seems to me, with respect, that the full value of the motor vehicle should have been awarded to the appellant. While it is true that the vehicle was intended to be used both for business and private purposes the fact remains that it was, for any practical purpose, the appellant's vehicle and that its value, to him, was $14,000 per annum. He should, consequently, have been awarded that amount. I should add that the value of $14,000 ascribed by the parties to the use of the car presumably takes account of the fact that the appellant was required to contribute $59.80 per fortnight to the cost of operating the car. There is, in any event, no appeal against any failure on the part of the trial Judge to take this requirement into account in assessing the appellant's damages in this respect.

53 So far as the mobile telephone is concerned, there is no appeal against the trial Judge's finding that this was provided solely for use by the appellant in his employment. That being so, it seems to me that there is no basis for any appeal against his Honour's refusal to award to the appellant any compensation in respect of his loss of the use of it.

54 No oral submissions were made, on the appeal, in support of the contention that an allowance should have been made in respect of a lost long service leave entitlement and nor has anything been pointed to which would justify any award in that respect. Clause 7.2 of the "pro forma document" refers to an entitlement to long service leave but provides that this is "in accordance with the Regulations" which are defined to mean the "Local Government (Long Service Leave) Regulations". Those regulations provided, at the material time, for long service leave after 10 years' continuous service (reg 6). The only entitlement to pro rata long service leave which is provided for is one in circumstances in which a worker has previously become entitled to long service leave or in which at least 7 years continuous service has been completed (regs 6(3) and 6(4)). The appellant is consequently not entitled to any award in this respect.

55 Finally, as regards the question of interest, it appears as though the trial Judge overlooked this issue. While counsel for the respondent contended that the omission was deliberate and that his Honour made no award because the appellant was receiving his damages partly in advance, it is, in my opinion, most unlikely that the trial Judge would, had he arrived at this conclusion, not have said so in the course of his reasons.

56 That said, I am not persuaded that this is a case in which an award of interest was justified. While it is true that the appellant has been kept out of the money representing the two years of his pre-trial loss, it is also true that he received, in advance, the money representing the two years of his post-trial loss and no discount was applied by the trial Judge to allow for the fact that that money would be received in advance. In those circumstances it seems to me that the most equitable outcome is that there be no award of interest.

57 I would consequently allow the appeal and set aside the judgment of the trial Judge, but only for the purpose of adding to the figure awarded by his Honour an additional sum of $28,000, representing an extra $7,000 per annum in respect of the appellant's loss of use of the motor vehicle. This takes the total sum to be awarded to the appellant up to $282,559.95.

58 It follows from the conclusions at which I have arrived that it is unnecessary for me to consider the cross-appeal.

59 PARKER J: I agree with the reasons now published by Steytler J and with the orders which his Honour proposes.