164 CLR 539
Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68
Source
Original judgment source is linked above.
Catchwords
127 CLR 374
Hawkins v Clayton [1988] HCA 15164 CLR 539
Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68
Judgment (6 paragraphs)
[1]
Judgment
HIS HONOUR: The plaintiff is a former employee of the defendant. The plaintiff was employed in a senior position with the North Sydney office of the defendant. His title appears to be Associate Director, Commercial Leasing.
On 27 September 1993 the defendant wrote to the plaintiff a letter which contained the following:
Following your recent discussions with Michael Stokes I have pleasure confirming your employment with Chesterton International on the following revised terms and conditions.
I need not refer to any of these conditions in detail. The remuneration was $35,000 per year with up to $16,000 per year which could be taken as a "locomotion allowance" to be paid on the 15th day of each month. In addition, commission was to be paid in accordance with the defendant's incentive scheme.
Clause 11.0 is headed "Superannuation" and reads as follows:
Chesterton International will pay your Superannuation Guarantee Levy, as required by recent legislation (presently 4.0% of your 1992/3 salary) to a nominated superannuation fund. This is in addition to your salary.
The letter does not contain all the terms and conditions of the employment but it is unnecessary to refer to other parts of the contract. The plaintiff was employed from September 1992 until 27 June 2011.
This is not the only dispute that has existed between the parties. In 2012 there were District Court proceedings between the parties and other parties as well and these were settled after a mediation by heads of agreement of 27 July 2012. The parties released each other from all claims but the heads of agreement made it quite clear that the plaintiff did not release the defendant from what is described as "the Cook superannuation dispute".
I have spent some time over the last month dealing with disputes as to the pleadings. The first three versions of the statement of claim, claim that the defendant had miscalculated the plaintiff superannuation contributions under the Superannuation Guarantee (Administration) Act 1992 (Cth) and for an order that the defendant pay the plaintiff's nominated superannuation fund the appropriate sum. It also sought a declaration that deductions of a 2% entertainment levy was unauthorised.
A fourth version of the statement of claim was proffered which I indicated last week that was still not sufficiently well phrased in order to produce meaningful questions to be tried. Although I never made any decision I strongly intimated to counsel then appearing for the plaintiff that either I would have to vacate the hearing date and give leave to amend with an order against the plaintiff for costs thrown away or else refuse leave to amend. It was clear to me that the submission of the defendant, that were the amendment allowed it would need to have an adjournment to obtain further evidentiary material to meet the amended claims, was valid. After a short adjournment the fourth amended statement of claim was withdrawn and the plaintiff elected to go to trial on the third, that is, the statement of claim entitled Further Amended Statement of Claim filed on the 18th of March 2014.
As I have indicated that statement of claim put forward two causes of action: A, a claim that money be paid into the plaintiff's superannuation fund because the contributions had been miscalculated; and B, relief about a 2% entertainment levy. However, not only was an executive order asked for in prayer 7 of the relief claimed, but a series of declarations was asked for in prayers 1 to 5.
At the hearing the claim for the 2% was abandoned. Accordingly, the only matter for me to decide is whether the plaintiff is entitled to any relief with respect to the payment of superannuation contributions.
I heard the case on 16 March. Mr Scot Wheelhouse SC and Mr David Elliott appeared for the plaintiff and Mr Nicholas Owens appeared for the defendant.
Mr Wheelhouse put, and this was sensible and correct, that there were four issues for me to decide which can be summarised as:
A The proper construction of clause 11 of the letter of employment;
B Whether any part of the plaintiff's present rights were compromised by the heads of agreement for release in 2012;
C If clause 11 is as the plaintiff contends, is the plaintiff entitled to relief and if so what?; and
D Is there a proper defence by the Limitation Act 1969?
I will deal with these matters in turn.
[2]
Paragraph A
The plaintiff says that the proper construction of clause 11 of the letter is that it has contractual effect. It amounts to a promise to pay the proper Superannuation Guarantee Levy and it is a promise that this is in addition to the plaintiff's salary. That then raises the question as to what is meant by salary.
The word salary originally meant salt money, that is the amount of salt that an employee was given (before the Truck Acts) as compensation for his or her labour. More recently it tends to be contrasted with the word wages so that menial employees receive "wages" weekly and salaried employees who are at a higher echelon of the organisation get paid a salary monthly. Mr Owens says that the word salary connotes an element of periodicity and regularity (see Commissioner for Government Transport v Kesby [1972] HCA 64; 127 CLR 374 at 387.
Mr Wheelhouse says that the word salary is not used in the document other than in clause 11. Clause 4.0 refers to remuneration and clause 5.0, a commission. In the first sentence of 11.0 the superannuation guarantee legislation is mentioned and it is noted that the current requirement on employers is to pay 4% of salary. Mr Wheelhouse says thus it is appropriate to construe "salary" where it secondly appears in the same way, that is, salary includes the amounts included in the definition of salary in the legislation namely (s 11(1)(a)(ba)) all fixed retainer plus commission and other payments made under the contract in respect of the labour of the employee.
In my view Mr Wheelhouse's argument is correct. It is the application of a good principle of interpretation to interpret the word used in the same clause in the same sense each time it occurs. That is a sensible interpretation and one which is appropriate here.
I must note however that I do not consider that clause 11 contains any promise. In my view it is merely a statement of the law as to an employer's duty to pay a superannuation levy.
Again I cannot agree with Mr Wheelhouse's submissions that the object of the letter of employment was to record entirely the terms and conditions of the employment.
However, on the assumption that Mr Wheelhouse's submission that clause 11 was a promise to pay the levy out of its own moneys and not out of Mr Cook's salary, I asked Mr Wheelhouse what consequences followed from this construction of the contract of employment.
Mr Wheelhouse then said that the plaintiff suffered two losses (a) he received less commission as part of his commission was used to pay the superannuation levy and (b) there has been a breach of the contract of employment for which the plaintiff is entitled to damages.
Mr Wheelhouse had argued that the real vice was that because of the way the employer calculated the levy the plaintiff was paid less by way of commission because what effectively has happened is that the employer has paid the superannuation levy out of the commissions due to the plaintiff rather than from its own moneys. Assuming that this is so, and it appears it might be, that would still not on the pleadings of this present case allow me to find a verdict for the plaintiff.
This is the reason why the plaintiff's then counsel tried to amend the statement of claim in the way he did and that leave was refused last week. Also I should point out it was not actually refused, the indication was that fourth version of the statement of claim would not be allowed but that time might well be allowed for a reconsidered version but only on the basis of losing the hearing date and paying costs thrown away and that alternative was not accepted by the plaintiff. Accordingly, the case Mr Wheelhouse seeks to make is not available to his client on the pleadings.
In any event it is agreed that however the superannuation was calculated in fact the plaintiff was paid more by way of superannuation levy contribution than he was entitled to be paid. Accordingly, no money would flow to him even if his interpretation of clause 11 were correct.
Another reason why the plaintiff must fail is that, as held by Davies J in Akmeemana v Murray [2009] NSWSC 979 at [35], the Commonwealth Act does not confer on private individuals any private law right. I respectfully agree.
The only remedy against an employer who does not comply with its obligation under the Commonwealth Act is vested in the Commissioner of Taxation.
[3]
Paragraph B
It is clear that the release does not affect the superannuation claim and I do not think anything more need be said about it.
[4]
Paragraph C
It follows from what I have said under heading A that the plaintiff is not entitled to any relief.
[5]
Paragraph D
The plaintiff commenced these proceedings on the 14th of August 2013. Although hidden behind declarations, essentially the claim is a claim in debt though the claim is not that the plaintiff be paid money directly but that it be paid into his superannuation fund. A six year limitation period applies in cases of debt so that only claims after the 15th August 2007 would ordinarily be considered.
It is really unnecessary to consider this question in the light of what I have said about previous issues however I will briefly deal with it. Mr Wheelhouse says that there are three answers to the limitation point, viz:
This is really a claim for unjust enrichment and that the time for bringing a claim as matter of debt is not the point.
Even if that were wrong, the obligation under the Superannuation Act is a continuing obligation and the plaintiff continued to have a statutory right to be paid his superannuation contribution properly calculated up until the time he resigned in 2011 and it was only then that the cause of action arose.
By analogy with the will case of Hawkins v Clayton [1988] HCA 15; 164 CLR 539 at 590-591, time only commenced running from the time when the plaintiff reasonably discovered the problem.
Mr Wheelhouse says that the modern way of looking at this sort of problem is unjust enrichment and refers to the High Court's treatment in Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; 208 CLR 516.
Before dealing with these issues, I should note that Mr Wheelhouse submitted that there is no problem with any statute bar in respect of the period after 15 August 2007 and there is no doubt that that proposition is correct.
Mr Wheelhouse gave three reasons given why limitations is not a problem. One, this is an action in restitution unjust enrichment so that the six year period for debt does not apply. Two, the obligation to pay superannuation contributions is a continuing one and it continued through to the plaintiff's retirement in 2011. Three, by analogy, with what Deane J said in Hawkins v Clayton [1988] HCA 15; 164 CLR 539 at 590-591, the limitation period did not commence until 2011.
In my view, none of these propositions provide an answer. As to the first, s 14 of the Limitation Act provides a six year period for quasi contractual matters, the old name for causes of action such as money had and received which is now classified as restitution.
In any event, it is very doubtful whether this is a case of money had and received. Money had and received lies for a total failure of consideration, not a partial failure of consideration. However, in the Rothmans case cited earlier at page 528 [24] the plurality recognised that where there is a total failure of consideration of a distinct and severable part of the consideration will give rise to a claim for money had and received. Mr Wheelhouse put that the superannuation component in this case constituted a distinct and severable part of the consideration. I do not consider that this is so. The employer had two obligations: (A), to pay remuneration and (B), to pay to the Commissioner of Taxation the superannuation levy. The plaintiff was only involved in A not B. Of course Mr Wheelhouse puts that it was the plaintiff's commission, the plaintiff's own money, which paid the superannuation levy not the defendant's money as should have been the case. Unfortunately that is not pleaded.
It is also difficult to say that this is a continuing obligation. The Commonwealth legislation provides that each quarter the superannuation levy must be paid to the Commissioner. There seems to be distinct debts for each quarter that the superannuation is liable to be paid to the Commissioner. This tells against any continuing obligation.
Thirdly, even Mr Wheelhouse recognises that the principle in the Hawkins case does not directly apply in the instant case.
Mr Wheelhouse says that principle is that where there is an economic loss case reference to accrual of a cause of action must exclude any period where the defendant's wrongful act precluded commencement of the proceedings. I will just accept that summation of the principle although I am not completely sure it is accurate. This is because even if it is accurate it does not apply in the instant case because no reason why Mr Cook could not have started proceedings before the limitation period expired has been provided other than one does not sue one's employer during the currency of the employment. Mr Wheelhouse says that it is of course difficult to sue one's current employer. Of course it is but a person must make his choice between two difficulty positions.
Accordingly, whichever way one looks at the case the plaintiff must fail and accordingly the proceedings must be dismissed with costs.
[6]
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Decision last updated: 24 March 2015