Cudlipp v Henty Jepson & Kelly Pty Ltd [2025] VMC 5

1. Mr Cudlipp gave uncontested evidence about the background to the employment, which I accept. He and Mr Timothy Ashton were, until 1 July 2017, equal partners in Hentys. Mr Cudlipp was responsible for wills and estate litigation. Mr Cudlipp had been a partner for over 30 years and it was the only firm he worked for over his career. He was older than Mr Ashton, being around 65 years of age in 2017. In the years prior, the two partners had discussed from time to time that Mr Cudlipp would leave the firm before Mr Ashton, and, accordingly, arrangements would need to be made for Mr Cudlipp's equity in the firm to be purchased either by Mr Ashton or someone else.
2. It was not in dispute that on 1 July 2017, the parties and their related entities entered into a share sale agreement, which in effect transferred Mr Cudlipp's equity in Hentys to Mr Ashton. At the same time, the parties entered an Employment Agreement, in terms annexed to, and as a condition precedent to, the share sale agreement.
3. The Employment Agreement provided that: Mr Cudlipp would be employed with the title Partner, but as if he were employed as a salaried Partner (cl 1); that he would continue to be a Director and Secretary of Hentys during his employment (cl 2); that his remuneration 'factored in [his] continuing role overseeing the financial aspects of the Companies [sic] operation' (cl 2); and that it was not envisaged that his work would be the subject of supervision and he would have authority to sign off on correspondence and advice to clients (cl 4).
4. The Commencement and Term Clause of the Employment Agreement provided:

1. Your employment will commence on 1 July 2017 and subject to a notice period of not less than 8 weeks only conclude if otherwise agreed in writing with you, or it is subject to termination as provided for hereinafter.

Otherwise it is anticipated that your employment will continue for a period not less than five (5) years from the Commencement Date unless you are prevented from so doing by ill health or otherwise at your election.

5. The Remuneration Clause in the Employment Agreement provided:

1.1 By being in receipt of, subsequent to the Commencement Date, an amount equivalent to forty (40%) of your fees that have been billed to a file at your agreed hourly rate as soon as practicable after the fees of which your percentage firms [sic] part have been collected by the firm. > > 1.2 In addition you will entitled [sic] to receive, subsequent to the Commencement Date, an additional amount equivalent to ten (10%) of the gross fees from files where the billings by any employee of the firm is for work billed by them on a file which has been introduced to the Firm by you which amount will also be paid as soon as practicable after the fees of which your percentage firms [sic] part have been collected by the Firm.

6. Further, the Employment Agreement included a Retainer Clause, as follows:

1. An advance against your remuneration will be paid to you by way of a retainer based on a figure equivalent to eighty (80%) of a mutually agreed budget based upon the anticipated fees to be received by the Firm from professional fees rendered by you and those employees of the firm who are engaged on matters introduced to the Firm by you (Advance)

1.2 Such (Advance) will be paid to you in equal monthly instalments on an arrears basis with the first payment of such Advance to be made at the expiration of one (1) month from the Commencement date and monthly thereafter.

• 1.2.1 The Advance shall have credited against it in each month any amount that is received by the Firm by way of fees generated by you, or by employees of the firm who are generating fees from working on files introduced by you, until the Firm has received a total of fees equivalent to the amount that you have received by way of such Advance.
• 1.2.2 Thereafter any amount in excess of the Advance (Excess Amount) shall be due and payable to you in accordance with the terms of this letter under the heading Remuneration sub clauses 1.1 and 1.2 with recourse to the procedure in subclause 1.2.1 if and when necessary.
• 1.2.3 It is agreed that the repayment of the Advance will not be subject to any charge by way of interest.
• 1.2.4 Any fees to which you are entitled to otherwise receive in relation to a file which is being conducted by the Firm on a "success fee" basis will be payable to you in accordance with the terms contained in this letter but only upon the receipt by the Firm of those success fees. ...

1. Accordingly, the effect of the Retainer Clause was that each month Hentys would pay Mr Cudlipp the Advance, and have credited to it (against the Advance) the remuneration to which Mr Cudlipp was entitled under the Remuneration Clause. Any amount in excess of the Advance was payable to Mr Cudlipp, in addition to the Advance.
2. It was not in dispute that between 1 July 2017 and approximately December 2021, the parties performed their obligations under the Employment Agreement, including the Remuneration Clause and the Retainer Clause.

1. Mr Cudlipp's uncontested evidence, which I accept, was that in around December 2021 he wanted to provide Mr Ashton with lengthy notice that he was going to leave the firm at the end of June 2022. He had discussions with Ms Melissa Dawson, the then Practice Manager, about this.
2. It was not in dispute that on 7 December 2021, Mr Cudlipp emailed Ms Dawson with the subject line 'A Plan' (7 December Email). The email stated:

3. I perform around 10 hours per week @$300 per hour paid monthly and not tied to collections which would involve supervising/mentoring Marcus & a pa as well as doing file work;
4. The current wip relating to my files is to be paid on collection;
5. I remain an employee & director until 30 June 2022;

The costs for me will $150k per annum (pro rata) as best I can estimate, the pa an attractive salary subject to attract & retain the right person, the same amount or slightly less for the Lead Agency & Marcus will be able to bill at his current rate. > > Can you review the billings over the last four & half years which will provide an accurate guide for the future as well as the current wip. Historically I have been able to write the wip on an annual basis (I suggest you check this with Keith). > > If we cannot create a small team there is no future for this work. The fees generated are significantly in excess of the cost of production which allows for some flexibility with salaries. > > I request a response in the next few working days especially so given that at the moment I do not have a personal assistant and it is unclear when one will be employed.

6. It was not in dispute that on 21 December 2021, Mr Ashton emailed Mr Cudlipp in response to his email to Ms Dawson (21 December Email), stating:

Hello Richard, > > Thank you for your email below, Melissa has passed this email on to me and I understand that there has been a discussion concerning the matter raised between the two of you. > > Given we have now employed George on a full time basis, I believe that this again ensures the smooth running of the Wills and Estates Department. > > I confirm that you will mentor Marcus upon his return to the office which will be on Tuesday, 18 January 2022. Marcus has agreed to return to the office 1 week earlier than originally planned. > > I confirm that as of Monday 10 January 2022 you will commence working a maximum of 10 hours per week, this will be paid at $300 per hour. If for some reason that you believe additional hours ought to be worked in a period, please discuss that with me. > > The above will be paid to you on a monthly basis, on or around the 15th of each month. > > Please confirm which days you intend on coming into the office. > > I request that you continue to record your time directly into Affinity so that this can be billed to the files. > > I confirm that all WIP recorded by you prior to Friday, 24 December 2021 will be paid to you at an amount equivalent to forty (40%) of your fees that have been billed to a file upon collection of those fees. > > On 4 January 2022, I confirm that Melissa will again do the figures and these will be forwarded to you. > > I confirm that you will remain a Director and an Employee until 30 June 2022, and confirm that I am in the process of making other arrangements for someone to come in at Director level who will take over from 1 July 2022.

7. It was put to Mr Cudlipp that he understood Mr Ashton's reference to 'all WIP recorded by you' in the 21 December Email to mean the amount of WIP collected. He agreed with this proposition, but said he was also aware that WIP was quite often 'written up' as well.
8. In response to the 21 December Email, on 22 December 2021 Mr Cudlipp emailed Mr Ashton (22 December Email) stating:

The only alteration to what has been proposed is to include the 10% of fees billed and collected from the work of other fee earners on the files operated by me.

9. Whilst Mr Ashton did not reply to this email, he forwarded it on to Ms Dawson shortly after receiving it. It was not in dispute that these emails constituted a variation to the Employment Agreement (December Variation).

1. It was not in dispute that the parties subsequently reached agreement that Mr Cudlipp's employment would terminate in May 2022. Mr Cudlipp contended that his employment terminated by agreement on 25 May 2022. Hentys contended that the parties had agreed that the employment would terminate on 31 May 2022, however, in breach of the Employment Agreement, Mr Cudlipp left his employment on 25 May 2022 and failed or refused to undertake a handover of files as required.
2. Mr Cudlipp's evidence as to what occurred in May 2022 was as follows.
3. Subsequent to the December Variation, he was performing 10 hours of legal work a week. He was assisted by a full time graduate lawyer, George Tabet. Because of Mr Tabet's assistance and the subsequent employment of Peter Bourke to be Mr Cudlipp's successor, Mr Cudlipp's workload reduced and there was a gradual unofficial transfer of files from him to Mr Bourke. It got to the stage in May 2022 where Mr Cudlipp had virtually nothing to do. He thought it was inappropriate to try and find work to do when there wasn't any. At that point he had very few files, less than a handful. This caused him to email Ms Alex McFarlane, Practice Manager, and Mr Bourke on 25 May 2022 at 9.25am stating 'Dear Peter & Alex, I will be in around 10.45 today and suggest we meet at 12.00 to discuss the remaining files to be handed over to Peter.' He didn't recall Ms McFarlane previously trying to set up a handover meeting or that his email was in response to her doing so.
4. He attended the office on 25 May 2022 and found that his room had been completely cleaned out. There were no remaining files. There was a box on his desk or chair containing his photographs and personal belongings. He gave evidence to the effect that whilst he did not expect a gold watch, everyone knows from watching movies what a box full of bits and pieces on a desk means. Mr Cudlipp left the office. He agreed he was paid but performed no service after 25 May 2022. After that, the extent of communication between he and Hentys was an exchange of emails about the transfer of phone numbers for he and his wife. There was no communication about rescheduling the handover meeting or about his failure to attend it.
5. Ms McFarlane also gave evidence as to what occurred in May 2022. She had been the Practice Manager at Hentys since 17 January 2022. When she commenced, she was told Mr Cudlipp was a Legal Director and he was retiring mid-year. She was preparing for the transition by seeking to understand how Mr Cudlipp operated his practice and the nature of the practice. Mr Cudlipp was not in the office much but she made many attempts to engage with him, however it was hard to catch him other than hallway interactions.
6. Ms McFarlane was involved in cleaning up Mr Cudlipp's office. Mr Cudlipp occupied one end of the office. There was stuff everywhere. She had to clean up everything, knowing that he was going to be leaving within the next few months. She did so because she had to make sure he got everything before he left, which was not going to be simple.
7. After receiving Mr Cudlipp's email on 25 May 2022, she arranged with Mr Bourke and Mr Ashton to attend the handover. She and Mr Bourke waited for 15 to 20 minutes and determined Mr Cudlipp was not coming in, which was not unusual. Other than telling Mr Ashton about this, she did nothing in response. She couldn't do anything about it, so she just went back to work and hoped that Mr Cudlipp came in. No contact was made with Mr Cudlipp by anyone at Hentys asking him to reschedule the meeting or to explain why he did not attend.
8. It was not in dispute that there was an exchange of emails between Ms McFarlane and Mr Cudlipp on 27 May 2022 (27 May Emails) and 30 May 2022 (30 May Email). In the 27 May Emails, Ms McFarlane requested that Mr Cudlipp return he and his wife's phones, and his access pass, by 4pm on 30 May 2022. Mr Cudlipp replied stating he had no intention of doing so as Ms McFarlane had previously informed him that she would facilitate the transfer of the phones to Mr Cudlipp. Ms McFarlane stated in the 30 May Email '[w]hen you decided to leave and not return without a handover of files or any kind of discussion with anyone, I was left with no choice but to assume you did not want the phones, email address or the mobile numbers.' She then in effect provided instructions to Mr Cudlipp to facilitate the transfer of the phones. The 30 May Email further stated 'You will need to do this as a matter of urgency as I have organised for all outgoing calls and data to be suspended as of 5pm tomorrow until you enter into your own plan at a Telstra store.'
9. I consider that the accounts of the two witnesses as to the events in May 2022 are largely able to be reconciled. Based on the evidence of both witnesses, I find that Mr Cudlipp was performing very little work in May 2022. I accept Mr Cudlipp's evidence and find that this was due to the absence of work for him to perform, as Mr Bourke had largely taken over his files, assisted by Mr Tabet. I find that, notwithstanding Mr Cudlipp's minimal file load at this time, Ms McFarlane regarded dealing with matters relating to the impending end of Mr Cudlipp's employment as urgent. Accordingly, I accept that she had been trying to make arrangements to transition his practice, and I find on balance that Mr Cudlipp's email on 25 May 2022 regarding the handover meeting was in response to these efforts.
10. I further find that upon Mr Cudlipp's attendance at the office on 25 May 2022, all files had been removed from his office and his personal belongings had been placed in a box by Ms McFarlane. I find based on Mr Cudlipp's evidence, in particular his comment as to the gold watch and the movies, that he was not aware that his office was going to be cleared out and his belongings placed in a box. I find that discovering this caused him to leave the office. I find that, other than the 27 May Emails and the 30 May Email, no Hentys representative contacted Mr Cudlipp further, to reschedule the handover meeting or for any other purpose, and Ms McFarlane hoped Mr Cudlipp would come back into the office. I find that Ms McFarlane had arranged for Mr Cudlipp's phone to be suspended as at 5pm on Tuesday 31 May 2022 and that she communicated this in the 30 May Email.

1. Mr Cudlipp gave evidence that work on the vast majority of files in the wills and estates practice was undertaken on a 'no win no fee' basis. Generally, and as of December 2021, it would take a minimum of 12 months for matters to be finalised and for the firm's invoice to be paid. For less than 10 per cent of files, this may take up to 18 months or 2 years.
2. Mr Keith Westbrook, Accounts Manager for Hentys, gave evidence as to financial reports he had prepared. He was not asked directly about whether there was a delay between WIP and billing, however the Calculation Summary he prepared in respect of the Fees Collected Claim (Calculation Summary) bears out Mr Cudlipp's evidence as to the delay. It illustrates that fees relating to WIP from prior to 24 December 2021 continued to be collected beyond 31 December 2021 for five further quarters, until the quarter ending 31 March 2023.
3. I find based on this evidence that a feature of the remuneration arrangement, known to both parties, was that there was commonly a lengthy delay between the writing of WIP and the realisation of the fees from it (and subsequent accounting of those fees towards Mr Cudlipp's Advance), usually 12 months and, more rarely, longer.
4. Mr Cudlipp said that prior to 2017, he had sole discretion on writing off WIP for himself and others on files for which he was responsible. It was rare for him to write off WIP and in the period 2017 to 2021 WIP was never written off without his consent. He conceded in cross examination that in unsuccessful 'no win no fee' cases the only option was to write off WIP, and he agreed that time could accidentally be recorded incorrectly and that he would remove it if it was not chargeable. He agreed he would scrutinise WIP before billing a file and he may alter amounts billed by junior solicitors. However, he disagreed that he routinely altered WIP down. I find based on Mr Cudlipp's uncontested evidence that prior to the termination of his employment, he was solely responsible for determining the extent to which any WIP would be written off. However, I was not persuaded by Mr Cudlipp's evidence that this was rare. I formed the view, based on the concessions he made, that it was more common than he sought to portray.

Mr Cudlipp contended that pursuant to the December Variation, Hentys was not permitted to unilaterally write off or write down WIP recorded prior to 24 December 2021. Because writing down WIP was previously wholly in his control, the December Variation should be construed to prohibit this occurring without his permission. This construction is open without the need to imply a term to this effect. Hentys was aware of the WIP balance as at the time of the December Variation and did not seek to dispute it. Further, there is no express term permitting writing down of WIP. The express language of the 7 December Email refers to 'the current wip' and the 21 December Email to 'all WIP recorded'. This construction of the December Variation would provide maximum certainty as to what Mr Cudlipp would be paid, which is to be preferred over a construction which would lead to uncertainty as to amounts due to him.

1. Hentys contended that on Mr Cudlipp's own evidence he knew that the December Variation referred to fees received by Hentys, which is consistent with the terms actually used by the parties in the December Variation. To read the December Variation otherwise requires the implication of a term. Hentys referred to a number of authorities to the effect that the objective common intention of the parties may be inferred from their words and conduct and the objectively known surrounding circumstances, and only after actual intention has been ascertained does the question of whether a term should be implied arise.[1] Further, for a term to be implied, it must be necessary.[2] There is no necessity to imply such a term.
2. In my view, the construction contended for by Mr Cudlipp would only be open if such a term were to be implied, and I do not consider it necessary to do so. I conclude that the parties objectively intended that Mr Cudlipp's remuneration would be based on only fees billed and collected. I do not consider the construction contended for by Mr Cudlipp is reasonably open based on the text of the December Variation, having regard to the objective common intention of the parties, in light of the following matters.
3. Firstly, the December Variation resulted in Mr Cudlipp's remuneration changing to an hourly rate, and being no longer 'tied to collections'. Accordingly, the December Variation refers to WIP in the objective context that it was necessary to specify what, if any, 'legacy' entitlement Mr Cudlipp would have in respect of 'collections' for work he had already performed but had not been remunerated for. In this context, the use of the term 'WIP' is explicable by the parties' need to define this work. I conclude that Mr Cudlipp's reference to 'current' WIP and Mr Ashton's reference to 'all' WIP are both directed at identifying the parameters of the work to which Mr Cudlipp's legacy entitlement related, as opposed to being a positive statement that 'all' or all 'current' WIP would be billed and collected, subject to Mr Cudlipp's permission not to.
4. Secondly, each reference to WIP in the December Variation is qualified. Mr Ashton's statement as to 'all WIP' was subject to the qualifier that payment will be based on 'fees that have been billed to a file upon collection of those fees'. Mr Cudlipp's own proposal qualified his reference to 'current WIP' to that paid 'on collection'. The 22 December Email, in respect of other fee earners, does not refer to WIP at all but refers to 'fees billed and collected'. Accordingly, the text of the December Variation distinguishes between WIP, on the one hand, and amounts billed and collected on the other, with Mr Cudlipp's entitlement to be paid based on the latter.
5. Thirdly, for the duration of the employment prior to the December Variation, the relevant touchstone for Mr Cudlipp's remuneration was not WIP, but fees that had been billed and collected. I conclude that the express qualifications on the references to WIP are directly referable to preserving this status quo. The construction contended for by Mr Cudlipp would mean that the legacy arrangements in the December Variation altered the status quo, in respect of work Mr Cudlipp had already performed. I consider it objectively unlikely that the parties intended, by the language of the December Variation, to achieve this effect.
6. Fourthly, it was objectively known to the parties that not all WIP recorded would be billed and collected. Whilst Hentys knew what the relevant WIP was at the time of the December Variation, Hentys could not have known what proportion of that WIP would be collected. Prior to the December Variation, it was Mr Cudlipp who assumed the risk of write-downs. Accepting he was the decision-maker in respect of these write downs, they nonetheless occurred due to matters outside his control such as an unsuccessful outcome. The construction contended for by Mr Cudlipp would reallocate this risk, after the December Variation, to Hentys, and require Hentys to pay Mr Cudlipp remuneration in respect of amounts which were never collected, unless he agreed otherwise. I again consider it objectively unlikely that the parties intended, by the language of the December Variation, to give effect to such a reallocation of risk.
7. On the balance of probabilities, Mr Cudlipp's WIP Claim is not made out.

1. Other than in respect of the WIP Claim, it was not in dispute that the December Variation entitled Mr Cudlipp, in respect of WIP prior to 24 December 2021, to payment of an amount equivalent to 40 per cent of his fees billed and collected, and 10 per cent of the fees billed and collected of other fee earners on files operated by him (the Fees Entitlement). However, at issue was whether Mr Cudlipp remained entitled to the Fees Entitlement after his employment terminated. Mr Cudlipp contended that both the relevant terms of the December Variation, and the rights to payment he accrued pursuant to those terms, survived the termination. Hentys contended that it was not obliged to pay Mr Cudlipp the fees collected post-termination because Mr Cudlipp repudiated the contract and it accepted his repudiation.
2. Mr Cudlipp referred to McDonald v Dennys Lascelles Ltd (McDonald)[3] and several other authorities as to the effect of termination on terms and obligations under a contract. Other than in respect of a termination by acceptance of a repudiation, Hentys did not take issue with these principles. On termination, a contract is not rescinded as from the beginning but the parties are discharged from future performance. Accordingly, rights or obligations which accrued unconditionally under the contract, prior to its termination, remain enforceable.[4] Further, obligations which are intended to survive termination are still required to be performed.[5] Whether or not a term of a contract survives termination depends on the proper construction of the contract.[6]

Did the Fees Entitlement survive the termination of the contract?

1. Mr Cudlipp relied on established principles that the contract should be construed in light of the language used by the parties, the surrounding circumstances known to them (where necessary) and the commercial purpose or object to be secured[7] to contend that on a proper construction, the Fees Entitlement was intended to survive termination. Hentys contended that it could only be by way of implication of a term that the Fees Entitlement survived the termination of the contract, and that such implication was not necessary.[8]
2. I consider it clear from the text of the December Variation that the commercial purpose or object intended to be secured by the Fees Entitlement was to make provision for Mr Cudlipp to realise income from work he had already performed up to 24 December 2021, upon his future remuneration no longer being tied to collected fees.
3. It was the objective intention of both parties, at the time of the December Variation, that Mr Cudlipp's employment would terminate after approximately six months (on 30 June 2022). The 21 December Email made express provision to this effect. It was also objectively known to both parties that there was usually a delay of 12 months or longer between the writing of WIP and the collection of fees (and consequent remuneration for Mr Cudlipp). Because of this, I conclude that the actual (objectively determined) intention of the parties, inferred from the context of the December Variation, was that the Fees Entitlement would survive termination. Otherwise, the Fees Entitlement would not be capable of achieving the commercial purpose or object of providing income to Mr Cudlipp referable to work performed up to 24 December 2021.
4. Having reached the conclusion that the parties' actual intention was that the Fees Entitlement survived the termination of the contract, it is not necessary to consider Mr Cudlipp's alternative argument that there was an implied term to this effect.

Does Mr Cudlipp have an accrued right to the Fees Entitlement?

1. Mr Cudlipp also claimed, on an alternative basis, that he had accrued a right to payment pursuant to the Fees Entitlement prior to the termination. Mr Cudlipp contended that the Fees Entitlement was an accrued right because it was for work already performed and recorded by him, or overseen by him. The only further 'performance' was for Hentys to pay Mr Cudlipp from the relevant fees collected. He relied on the principle that a right can accrue unconditionally notwithstanding that it is contingent on a future event, however only if the right is not dependent on facts or events resulting from any further act of performance of the contract.[9] Hentys did not take issue with this principle, other than in respect of its arguments as to repudiation.
2. Accepting that payment pursuant to the Fees Entitlement may constitute an accrued right notwithstanding that it is contingent on a future event, the critical question is whether the future event (being the billing and collection of those fees) was a further act of performance of the contract. Hentys did not contend that its billing and collection of the relevant fees was required by its contract with Mr Cudlipp. Rather, Hentys billed and recovered Mr Cudlipp's fees whilst taking the position that it had no further contractual obligation to Mr Cudlipp in respect of those fees. In this context, I accept that Mr Cudlipp's entitlement to payment pursuant to the Fees Entitlement was not subject to any further act of performance of the contract, but accrued unconditionally prior to the termination of the contract.

1. The primary contention of Hentys in opposition to the Fees Collected Claim was that Mr Cudlipp ceased being entitled to any accrued right, and there could be no surviving term, because Mr Cudlipp repudiated the contract and Hentys accepted that repudiation.

Was the contract terminated by acceptance of a repudiation by Mr Cudlipp?

1. There was no significant difference between the parties as to the applicable legal principles regarding termination of a contract by way of acceptance of a repudiation. A repudiatory breach of contract may arise either by way of breach of an essential term[10] or a sufficiently serious breach of a non-essential or intermediate term, such that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements.[11] Repudiatory conduct is conduct which evinces an intention to no longer be bound by the contract.[12] Repudiation of a contract is not to be lightly found or inferred. Relevant conduct of a defaulting party must objectively convey to the other party the defaulting party's intention to not perform the contract, or to only fulfil it in a manner substantially inconsistent with their obligations. All of the circumstances must be considered.[13]
2. In the event of repudiatory conduct, the other party can either accept the repudiation and terminate the contract, or seek to enforce the contract. Unless and until an election is made, there is no alteration in the rights and obligations of the parties. An unaccepted repudiation is of no consequence if the contract is then validly terminated.[14] Further, for the termination of a contract in response to a repudiation to crystallise, the acceptance of the repudiation must be communicated by the innocent party to the defaulting party. Communication may be direct or indirect, and by words or by conduct. Conduct inconsistent with a recognition of continuing obligations will ordinarily be sufficient.[15]
3. Hentys contended that Mr Cudlipp's conduct in failing to attend the handover meeting on 25 May 2022 was a breach of an essential term of the contract, being the requirement to perform service. Mr Cudlipp's failure to attend the meeting and provide service subsequently evinced an intention to no longer be bound by the contract. Hentys communicated its acceptance of this repudiation by no longer dealing with Mr Cudlipp, no longer requiring him to attend the handover meeting and not paying him the sums he now claims by way of the Fees Entitlement.
4. Mr Cudlipp contends that whilst his non-attendance at the handover meeting may have been a breach of his obligations to Hentys, it does not rise to the level of repudiatory conduct as it is not a breach of an essential term or a serious breach of an intermediate term in the absence of any follow up by Hentys. Further, even if that conduct amounted to a repudiation, Hentys failed to communicate its acceptance of that repudiation prior to the contract coming to an end by agreement on 31 May 2022, evidenced by the 27 May Emails and the 30 May Email.
5. I am not persuaded that Mr Cudlipp's failure to attend the handover meeting or provide service subsequently was a repudiatory breach of his contract.
6. Hentys has not established, on the evidence before me, that Mr Cudlipp was generally required to attend work or perform service in May 2022, or that there was any general refusal by Mr Cudlipp to do so. The express terms of the December Variation provide that Mr Cudlipp will work 'a maximum' of 10 hours per week. Further, the reason that Mr Cudlipp was performing very little work in May 2022 was the absence of work for him to perform.
7. The remaining repudiatory conduct alleged relates to the handover meeting. Whilst Hentys had required Mr Cudlipp to make arrangements to transition his practice, and he scheduled the handover meeting in response to this requirement, Hentys had not specifically required Mr Cudlipp to attend that meeting on that day. Having regard to the authorities referred to above, attendance at that specific meeting was not, in my view, an essential obligation under the contract.
8. Further, I consider that Mr Cudlipp's failure to attend the handover meeting was adequately explained by the discovery that his office had been packed up and his belongings placed in a box. In these circumstances, his conduct did not objectively convey an intention to no longer be bound by the contract. Additionally, there was no subsequent attempt by Hentys to establish why Mr Cudlipp did not attend the meeting or to require him to attend a rescheduled handover meeting. In these circumstances, I do not consider that Mr Cudlipp's conduct can reasonably be characterised as a serious breach of a non-essential term.
9. In any event, whilst acceptance of a repudiation may be communicated by way of conduct, I conclude that Hentys conduct did not amount to acceptance of the alleged repudiation by Mr Cudlipp prior to the contract terminating on 31 May 2022. The contract was to end by agreement on that day, and Mr Cudlipp was otherwise performing very little work in May. In this context, something other than silence on Hentys part was required. Silence is equally consistent with the contract continuing on foot for that short remaining period. Moreover, Ms McFarlane's evidence that she hoped Mr Cudlipp would come back into the office is not consistent with Hentys having accepted a repudiation. Neither is the 30 May Email, which positively conveyed that the contract remained on foot. It confirmed that Mr Cudlipp still had the use of his phone, which would cease at 5pm on 31 May 2022, being the end of the day on which the parties had agreed the employment would terminate. The failure to pay Mr Cudlipp the Fees Entitlement has no bearing on this issue. The Calculation Summary shows that as at the fourth quarter of the 2021/22 financial year, Mr Cudlipp had been overpaid his Advance. It was only fees recovered subsequently which required further payments to be made by Hentys.
10. On the balance of probabilities, Hentys repudiation argument is not made out.

Does a termination by acceptance of a repudiation alter the above analysis?

1. In any event, a termination by acceptance of repudiatory conduct would not alter my conclusions that Mr Cudlipp's Fees Entitlement was a right which survived the termination of the contract, or that he had unconditionally accrued a right to payment pursuant to the Fees Entitlement.
2. I conclude that even if the termination was brought about by acceptance of Mr Cudlipp's repudiation, his unconditional accrued right to payment pursuant to the Fees Entitlement survived. The authorities referred to by Mr Cudlipp establish that the general principle derived from McDonald[16] applies equally to termination by way of an acceptance of a repudiation.[17]
3. Nor am I persuaded that a termination based on Mr Cudlipp's repudiatory conduct affects the post-termination survival of the Fees Entitlement. In this respect, I was referred to authorities in which post-employment restraint of trade clauses were held to be unenforceable by an employer whose repudiatory breach had led to the termination of the relevant contract.[18] However, these decisions are specific to post-employment restraints. They do not establish any general principle that termination by repudiation renders other terms incapable of surviving that termination.
4. In Crowe Horwarth, the Court identified several different bases on which the post-employment restraint was unenforceable. One such rationale was that on a proper construction of the contract, the restraint clause was not objectively intended to survive termination by way of an employer's repudiatory breach.[19] Applying that approach to the present case, I see no basis to construe the post-termination survival of the Fees Entitlement as inapplicable because of termination by acceptance of a repudiatory breach. The commercial purpose of the Fees Entitlement was to make provision for Mr Cudlipp to realise fees from work he had already performed prior to 24 December 2021. The Fees Entitlement is unconnected to any future conduct by Mr Cudlipp or any loss or damage arising from repudiation. Accordingly, I am not persuaded that termination by repudiation alters my previous conclusion in this respect.
5. I will order that Hentys pay Mr Cudlipp the sum of $22,200.54. I will make directions for the parties to confer and seek to agree on the questions of interest and costs.

[1] Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39, [15]-[17] (Kiefel CJ and Gageler J) (Hardingham); Hawkins v Clayton (1988) 164 CLR 539, 570 (Deane J) (Hawkins); Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 442 (McHugh and Gummow JJ) (Byrne).

[2] Hardingham, [18]-[20]; Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 121 (Deane J) (Hospital Products); Hawkins, 573; Byrne, 446.

[3] [1933] HCA 25; (1933) 48 CLR 457.

[4] McDonald, 476-7 (Dixon J, Rich, McTiernan JJ agreeing), 469-470 (Starke J); Richmond v Moore Stephens Adelaide Pty Ltd [2015] SASCFC 147, [193]-[195] (Richmond); ACN 115 918 959 Pty Ltd v Hoeys Lawyers Pty Ltd [2021] VSC 79, [421] (Hoeys); Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106, [144] (Gantley); Trafalgar West Investments Pty Ltd v LCM Litigation Management Pty Ltd [2016] WASC 159, [48] (Trafalgar West Investments).

[5] Richmond, [195]; Hoeys, ibid; Trafalgar West Investments, ibid.

[6] Hoeys, [421]; Richmond, [195]-[196].

[7] Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, [46]-[50] (French CJ, Nettle and Gordon JJ); Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7, [35] (French CJ, Hayne, Crennan and Kiefel JJ).

[8] Referring to Hospital Products, 121 (Deane J) and Byrne, 446 (McHugh and Gummow JJ).

[9] Trafalgar West Investments, [48].

[10] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115; [2007] HCA 61, [47] (Gleeson CJ, Gummow, Heydon and Crennan JJ).

[11] Ibid, [49]; Makland Constructions Pty Ltd v Page Steel Fabrications Pty Ltd [2024] VSCA 142, [51] (Makland Constructions).

[12] Melbourne Yifang Group Pty Ltd v Guangao A Group Pty Ltd & Ors [2023] VSC 577, [168], quoting Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd,10 [2006] FCAFC 40; (2006) 149 FCR 395, [102].

[13] Makland Construction, [52] citing Alphater Consulting Engineers Pty Ltd v Rozman [2016] VSCA 111, [60].

[14] Willis v Crosland [2021] VSCA 320, [78].

[15] Actrol Parts Pty Ltd v Coppi (No 2) [2015] VSC 694, [50]-[52].

[17] Richmond, [193]; Hoeys, [417]-[421]; Gantley, [144]; Striker Resources NL v Australian Goldfields NL (In Liq) [2006] WASC 153, [171]; Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd [2007] NSWSC 406, [15].

[18] Richmond, [210]; Crowe Horwarth (Aust) Pty Ltd v Loone [2017] VSCA 181, [193(6)], [193(9)], [193(11)] (Crowe Horwarth).

[19] Crowe Horwath, [193(11)-(13)], [253].