Cushman & Wakefield Agency (NSW) Pty Ltd v Hudson

Supreme Court of NSW|2023-04-21|Before: Parker J

Walker v Salomon Smith Barney Securities Pty Ltd (2003) 140 IR 433 Watson v Foxman (1995) 49 NSWLR 315

Texts Cited: M Leeming, "Subjective intention in the law of contract - its role and limits" (Speech, Bar Association of Queensland, University of Queensland and Supreme Court of Queensland Library, 1 June 2023 Meagher, Gummow & Lehane's Equity Doctrines & Remedies Heydon JD, Leeming MJ and Turner PG, (5th ed, 2015, LexisNexis Butterworths) [21-195]

Category: Principal judgment Parties: Cushman & Wakefield Agency (NSW) Pty Ltd (Plaintiff/First Cross-Defendant) Rosa-lyn Hudson (Defendant/Cross-Claimant) Timothy James Molchanoff (Second Cross-Defendant) Representation: Counsel: D Mahendra/JVM Smith (Plaintiff/Cross-Defendants) BK Nolan (Defendant/Cross-Claimant)

Solicitor: King & Wood Mallesons (Plaintiff/Cross-Defendants) Green & Associates (Defendant/Cross-Claimant) File Number(s): 2023/76041 Publication restriction: Nil

JUDGMENT

This is a restraint of trade case which I heard in late April. The matter needed to be decided urgently because an interlocutory injunction was due to expire in early May. On 28 April, I announced my decision and made orders. I indicated that I intended to publish formal reasons in due course. These are those reasons.
The plaintiff is Cushman & Wakefield Agency (NSW) Pty Ltd ("C&W NSW"). It is the local subsidiary of the Cushman & Wakefield group of companies ("C&W"). The group carries on a multi-national commercial real estate services business which is headquartered in Chicago. In this judgment I will not distinguish between the various C&W companies unless it is necessary to do so.
The defendant is Rosa-lyn (known as "Rosie") Hudson. Ms Hudson has worked in the commercial leasing industry for about eleven years, mainly in office leasing. She was employed by C&W from 2016 onwards. Her first role was as a Manager. In 2018, she was promoted to Associate Director. From the start of 2021, she held the position of Director.
There were three sets of contractual documentation which applied, or allegedly applied, to Ms Hudson's employment. For convenience, I will refer to each set of documents as a "contract". The first was a contract entered into prior to Ms Hudson commencing at C&W, and later amended in 2018 and 2020 ("the 2016 contract"). The second was a replacement contract entered when Ms Hudson was returning part-time from a period of maternity leave ("the 2021 contract"). The third was a contract drawn up when Ms Hudson was returning full-time from a further period of maternity leave ("the 2022 contract"). It is common ground that the 2016 contract, and then the 2021 contract, governed the employment relationship between the parties. Whether, and to what extent, the 2022 contract does so is the subject of dispute.
Ms Hudson resigned in early February this year, and was immediately "walked out" by C&W. She was escorted out of C&W's premises, leaving behind the phone, computer and other property provided for her by C&W, and her access to C&W's email system was removed.
The following day, C&W purported to direct Ms Hudson to treat herself as being on "garden leave" for a period of three months. This direction was based on the notice period in the 2022 contract (the contract provided that C&W might direct Ms Hudson to go on garden leave for such part of the notice period as it chose). C&W also stated, by way of reminder, that at the end of the three-month garden leave period Ms Hudson would be subject to post-employment restraints for a further period of 12 months. Again, this period was based on the terms of the 2022 contract.
Correspondence ensued and the parties retained solicitors. Ms Hudson disputed the contractual validity of the notice and post-employment restraint periods in the 2022 contract, as well as the enforceability of the restraints generally.
Ms Hudson had resigned from C&W after having accepted an offer of employment from another international real estate firm, Jones Lang LaSalle ("JLL"). There is no dispute that JLL is a competitor of C&W in the Sydney commercial leasing services market. C&W commenced these proceedings, and obtained ex parte interlocutory injunctive relief, in early March. This was at about the same time as Ms Hudson started, or was to start, work for JLL. Among other things, the injunction restrained Ms Hudson from working for JLL until 3 May or further order.
Ms Hudson sought, before Richmond J in the Duty List, to have the injunction discharged - that application was the subject of the first judgment in these proceedings: Cushman & Wakefield Agency (NSW) Pty Ltd v Hudson [2023] NSWSC 218, paragraphs of which are referred to in this judgment by using "J1". Her application was unsuccessful. Instead, his Honour continued the ex parte injunctions against her, with minor modifications to C&W's undertakings.
This judgment is concerned with the claims for relief which were the subject of an expedited hearing in April. That hearing, which took place on 17, 18, 19 and 21 April, was confined to claims requiring expedited determination.
Due to the urgent nature of the proceedings, I decided to announce my conclusions and make orders in the proceedings as quickly as possible, with reasons to follow in due course. As already noted, I announced my conclusions on Friday 28 April and made orders on that date disposing of the expedited claims. I granted injunctions against Ms Hudson, albeit that those injunctions were less extensive than C&W had sought. But I stayed the operation of the injunctions until 6pm on Monday 1 May, and adjourned the proceedings until 4pm on that date. This was to enable Ms Hudson to consider whether to seek a further stay of my orders pending an appeal (which had been foreshadowed during final submissions as a possibility), in circumstances where her counsel had been unable to appear on 28 April.
The listing on 1 May was, in the event, vacated by consent shortly before it had been due to begin. No application for a further stay was made and no appeal was foreshadowed. In accordance with a consent minute of order submitted by the parties, the proceedings were removed from the Expedition List and listed before the Registrar in Equity for directions as to the balance of the proceedings. But on 5 June the Registrar made further orders by consent disposing of the remaining claims and directed that the file be closed.
By this point, although I understood that formal reasons for judgment were required in due course, I was unaware of any appeal. It was only in late June that I was notified that Ms Hudson was appealing and wanted the delivery of the judgment expedited.

Claims and issues for determination

C&W's main claims against Ms Hudson in the proceedings were based on the 2022 contract, and specifically the notice and post-employment restraint periods specified in that contract. Those claims were resisted by Ms Hudson on various grounds. Some of those grounds were the subject of a cross-claim. As well as C&W, Ms Hudson joined Timothy James Molchanoff as a cross-defendant. Mr Molchanoff was (and remains) the head of the department where Ms Hudson worked at C&W. She alleged that there had been misleading and deceptive conduct in connection with the negotiation of the 2021 and 2022 contracts for which both C&W, and Mr Molchanoff personally, were liable.
As already mentioned, only some claims in the proceedings were the subject of the expedited hearing. The remainder were left for later determination. These included C&W's claims for damages for breach of the restraints. They also included Ms Hudson's claims for damages for breach of contract (against C&W) and under the Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Sch 2) ("ACL") (against C&W and Mr Molchanoff). They also included a claim by C&W for the re-payment of part of a retention payment which it made to Ms Hudson in 2020.
At the expedited hearing, C&W pressed for the grant of final injunctions covering the balance of the notice period specified in the 2022 contract (that is, for three months, expiring on 3 May), and thereafter for a further nine months, up to 3 February next year. C&W did not seek to enforce the post-employment restraints for the last three months of the 12-month period specified in the 2022 contract.
The first issue for determination was whether the notice and post-employment restraint periods specified in the 2022 contract were binding on Ms Hudson as a matter of contract law. Ms Hudson contended that she had never assented to them in a contractually valid way; as a result, the 2021 provisions (a one-month notice period and a one-month post-employment restraint period) continued to apply. In her cross-claim, she sought declaratory relief accordingly.
Ms Hudson next contended that if the 2022 contract was binding as a matter of contract law, it was liable to be rectified. In her cross-claim, she sought orders rectifying the 2022 contract which would have the effect of replacing the notice and post-employment restraint periods with those specified in the 2021 contract. This rectification claim was the second issue for determination.
The third issue concerned claims of statutory misleading conduct. Ms Hudson contended that she entered the 2022 contract in reliance on representations made in 2021 and 2022 which led her to believe that the terms of her 2021 contract, or alternatively, the notice and post-employment restraint periods in that contract, were unchanged in the 2022 contract. Ms Hudson contended that, if the 2022 contract was binding as a matter of contract law and the rectification claim failed, those representations had been misleading, and C&W had contravened the ACL. Ms Hudson sought relief under ss 237 and 243 of the ACL which would, in effect, prevent C&W from enforcing the notice and post-employment restraint periods in the 2022 contract.
The fourth issue concerned whether, and if so, when, the 2022 contract had been terminated. Ms Hudson contended that if she was bound by the 2022 contract, she had repudiated it by giving four weeks' notice, and C&W had accepted this termination by the "walk-out". It followed, according to this contention, that there was no garden leave period and the post-employment restraint period started to run immediately.
The fifth issue concerned the reasonableness of the restraints in the 2022 contract. Both scope and duration were in issue, both during the garden leave (if any) and the post-employment periods.
Finally, Ms Hudson contended that, to the extent that the restraints were valid and enforceable, injunctive relief should be refused on discretionary grounds. This was the sixth issue for determination.

Chronology of key events

Ms Hudson left school in around 2008. She has a bachelor's degree in property economics, which she completed while working full-time. She also has a certificate IV in real estate, which she completed while still at school.
Since 2011, she has worked for two multinational commercial leasing agency firms - Coldwell Banker Richard Ellis ("CBRE") and C&W. Her work at both firms focused on office leasing in the Sydney CBD market. Evidence was given about the nature of C&W's business in that market. It was however apparent that the evidence was equally applicable to other agencies in the market.
Typically, a commercial leasing agency has two features to its leasing business. One feature involves working with tenants. Part of this is "tenant representation" - that is, representing tenants who appoint the agency to be their "tenant representative". Tenant representatives circulate information about the tenant and their requirements, to landlords and other agencies. The agency may also represent "brokerage tenants"- prospective tenants, without tenant representatives - in transactions, assisting with the brokerage of leases.
The other feature of an agency's business is concerned with filling vacancies in buildings for landlords. The agency competes with other agencies for "appointments" on buildings. If appointed, the agency enters an agreement with the landlord. The evidence indicated that these agreements are normally for around twelve months, with a one-month notice period. It is not uncommon for two agencies to be jointly appointed.
The agency is not paid for the mere fact of appointment. The appointing landlord pays the agency a fee when it successfully fills a vacancy in the relevant building. The fee is calculated based on the terms of the agreement between the agency and the landlord. It commonly depends on factors such as: tenancy length, revenue generated, tenancy size, tenure of transaction, and rent value.
It was uncontested that the Sydney CBD commercial leasing agency services market is highly competitive. In particular, there is strong competition for obtaining appointments and filling vacancies. Many of the agencies are multinational firms. The work appears to be lucrative and the poaching of staff between agencies appears to be commonplace.
When Ms Hudson joined CBRE, she began as a junior member of CBRE's office leasing team. Initially she was an Analyst. Later she was promoted to a Negotiator. I understood that she was not working in landlord appointments while at CBRE. In particular, the evidence indicated that Ms Hudson was largely working with brokerage tenants during her time as a Negotiator.
Mr Molchanoff was, at the time, the head of CBRE's office leasing team. In late 2015, he was headhunted by C&W to become its National Head of Leasing. When he moved from CBRE to C&W, Mr Molchanoff brought some members of CBRE's office leasing team with him. These included two senior agents, Tim Courtnall and Mr Jamie King, and Ms Hudson.
In March 2016, Ms Hudson commenced at C&W as a Manager in the NSW Leasing department, having signed a contract in January. She was initially employed by a C&W company named DTZ Pty Limited ("DTZ"). I summarise the 2016 contract below at [63].
When, or soon after, Ms Hudson moved to C&W, she began working on the appointments side of the business. The remuneration of agents working on appointments has two components: a fixed component (base salary), inclusive of superannuation; and a commission-based component. Again, although the evidence mainly concerned C&W's practices, the basic structure appears to be common among firms operating in the market.
When C&W is appointed on a building, it usually designates two of its agents to handle the appointment. Those agents agree among themselves on a fee-sharing arrangement. Fees were ordinarily split 50/50 between two agents. But there were exceptions - for example, while on maternity leave, Ms Hudson received a 15% split on a transaction. There was also evidence of agents other than those appointed sometimes being included in the fee-sharing arrangement - for example, where a non-appointed agent introduced a tenant to the building.
A share of the fee received by C&W from filling a vacancy in a building on which it is appointed goes to the respective agents, in accordance with the fee-sharing arrangement. The agents do not directly pocket their share of the fee. Instead, it goes towards an agent's annual "personal fees" pool. Each agent then has a "commission structure" which outlines when, and if so at what rates, agents are entitled to commission on their annual fee pool.
The commission structure is based on comparisons between the annual fees pool and an agent's base salary multiplied by specified amounts (multipliers). If the fees pool total does not exceed the base salary multiplied by the initial multiplier, then the agent earns no commission - the relevant threshold can be thought of as a commission-free component of the fee pool. Fees above that threshold attract commission at a specified rate. Commission structures can have multiple bands, with different (normally, increasing) rates.
By way of explanation, under Ms Hudson's 2016 contract, her base salary was $80,000 (including superannuation). The commission-free part of her fee pool was 2.5 times her base salary - that is, $200,000. For fees above that amount, she earned 40% commission, except for fees above 4 times her base salary, on which she earned 50% commission. So, on fees above $200,000 and below $320,000, she earned 40% commission. Above $320,000, she earned 50% commission. For 2016 and 2017 only, C&W agreed to underwrite a minimum commission income of $320,000 which would yield a commission payment of $48,000 per annum.
In May 2018, Ms Hudson was promoted to Associate Director, and her base salary was increased to $100,000. This took effect from July. Her employing entity was also changed from DTZ to C&W NSW (but on the basis of continuity of employment since 2016).
From July 2020, Ms Hudson went on maternity leave for the birth of her first child. In December, while still on leave, Ms Hudson was promoted to Director, with effect from January 2021. She also received a retention payment of $350,000, subject to remaining at C&W until the end of 2024 (with exceptions). If she left earlier, she would have to repay a specified amount - the proportion depended on when she left. Relevantly, having left in 2023, Ms Hudson was liable to repay 50%. The evidence showed that this payment was made because Ms Hudson, along with others in the New South Wales leasing team, had been contemplating leaving C&W and returning to CBRE.
At the same time, Ms Hudson received a change in her commission structure. It remained the case that she was only entitled to commission if her fee pool exceeded 2.5 times her base salary. The relevant change was that she would earn 50% commission on any part of her fee pool above that threshold.
Mr Courtnall returned to CBRE in late 2020. Ms Antonia Foweraker took his place as the New South Wales leasing manager, reporting to Mr Molchanoff. Ms Foweraker had been working for C&W since 2006.
In February 2021, in anticipation of returning from her maternity leave (which occurred in about March), Ms Hudson entered into a flexible working arrangement with C&W. She later entered a new contract, which she signed in April. I summarise the contract in more detail below. Under it, Ms Hudson's title was unchanged, but her hours were reduced to 30.4 hours per week, spread over four days, and her base salary was reduced, pro rata, to $80,000 including superannuation. Her commission structure was unchanged.
Ms Hudson made handwritten amendments to the 2021 contract before signing it. She altered the notice period from twelve weeks to four and the restraint period from three months to one (this was largely consistent with her 2016 contract - albeit that it had a one month notice period instead of four weeks). It appears that these amendments were accepted by C&W, there being no evidence to the contrary.
Ms Hudson also gave evidence of conversations with Mr Molchanoff in January and April 2021, before entering the 2021 contract (see below at [75]-[76]).
In February 2022, Ms Hudson took maternity leave for the birth of her second child. In anticipation of her return to work full-time (on 16 August) she wrote to Ms Foweraker in July seeking a pay rise (extracted below). The pay rise was approved by C&W's Managing Director, Mr Simon Fenn, on 4 August. C&W HR facilitated the request and prepared a new contract. This comprised an agreement dated 9 August (with an annexure), and a covering letter dated 10 August, in a single PDF. The contract was sent to Ms Foweraker on 11 August, who was asked to review it and raise any issues. At some time after this (the precise time is unclear on the evidence), the contract was issued to Ms Hudson.
I summarise the relevant provisions of the 2022 contract below at [91]. Significantly, it contained longer notice and restraint periods. The notice period was three months. The restraint period was up to twelve months. Ms Hudson gave evidence that she was unaware of these changes at the time of signing the 2022 contract, because she did not read it in its entirety. She only gave positive evidence of having read the annexure, which set out how her commission would be determined. Ms Hudson made electronic amendments to that annexure. She signed in the only space for signature at the bottom of that annexure and dated it 12 August.
On 17 August, a member of C&W HR followed up Ms Foweraker, by email, about having not yet received Ms Hudson's signed contract. Nine minutes later, Ms Foweraker replied attaching the signed contract.
Ms Hudson gave evidence of conversations which she had with Ms Foweraker prior to entering the 2022 contract. Ms Foweraker also gave evidence of such conversations, as well as conversations which she had with Mr Molchanoff. The conversations are set out at [119]-[120].
It appears that C&W did not detect Ms Hudson's amendments to the commission structure until early September. This was discussed in internal correspondence, culminating in a letter of 20 September, self-described as an addendum to the 10 August letter. It set out a revised commission structure schedule, consistent with the amendments made by Ms Hudson. It was signed by Ms Hudson on 20 September.
Ms Hudson received a formal letter of offer from JLL on 30 January, including terms. She gave evidence, however, that JLL first approached her in June last year, and she had been considering the possibility of moving there even before asking C&W for a pay increase. The evidence does not indicate when the negotiations resumed. A further offer was sent on 1 February which appears to have been in similar terms to that of 30 January. Ms Hudson appears to have accepted it on 1 February. She was to commence employment on 2 March, as a "Senior Director, Office Leasing NSW".
It appears that Ms Hudson provided oral notice on 1 February, in a meeting with Mr Molchanoff. She was "walked out" later that day (see above). The same occurred for Ms Foweraker and Mr King who had accepted offers from JLL at the same time (I infer that the departure of the three of them was coordinated).
Ms Hudson then sent a letter of resignation by email, to Mr Molchanoff, on 2 February, dated 31 January. She purported to give four weeks' notice. I extract the letter below at [155].
C&W sent Ms Hudson a letter dated 3 February, by post and email (although it only appears to have been emailed on 6 February) and signed by Mr Molchanoff. C&W acknowledged Ms Hudson's resignation, referred to a three month notice period (consistently with the August 2022 contract) and instructed her that she would "remain on Garden Leave for the remainder" of that period. This involved not attending C&W's premises, not performing any work, and not making contact with any C&W staff, customers or clients.
Ms Hudson was informed that C&W might still contact her to request employment-related information, and she was required to make herself available to attend to those matters if required. She would continue to be paid her usual base salary and superannuation contributions, together with any accrued entitlements to commission. The letter also reminded her of her post-employment obligations, and again, consistently with the August 2022 agreement, advised that these would extend for a period of twelve months. I extract the letter below at [156].
On 7 February, Ms Hudson sent an email asserting that the notice and post-employment restraint periods were only one month. Correspondence was then exchanged between C&W and Ms Hudson, which I summarise below. During this time, Ms Hudson and Mr Molchanoff appeared to have had some communication via phone and text message.
Both parties retained solicitors, who exchanged correspondence, but no resolution was reached. Ms Hudson appeared to have begun employment with JLL on or about 2 March, the date specified in the offer she had accepted. These proceedings were commenced on 7 March, and Richmond J made his interlocutory orders on 13 March (see above).
The parties accepted that Ms Hudson was continuing to be paid her salary during the garden leave period. An undertaking was made to that effect before Richmond J.

Witnesses

Mr Molchanoff was the sole witness for C&W. He affirmed three affidavits and was cross-examined at length. Mr Fenn did not give evidence.
Ms Hudson affirmed five affidavits and was also cross-examined at length. Ms Foweraker and Mr King also gave evidence for the defence. Ms Foweraker affirmed three affidavits and was cross-examined. Mr King affirmed one affidavit but was not asked any questions in cross-examination.
There were attacks made during cross-examination and final submissions on the reliability of some of the evidence of Mr Molchanoff, Ms Foweraker and Ms Hudson. In Mr Molchanoff's case, there appeared to be wider challenges to his credit.
I thought Ms Hudson's demeanour when she gave evidence was somewhat defensive at times. As I describe below, she made significant additions to her affidavit evidence after the interlocutory hearing before Richmond J, and I did not find the way that she handled this in cross-examination at all convincing. There are some parts of her evidence about the precise sequence of events and the precise language which I have not accepted; and overall, she seemed to me to have little, if any, actual recollection of such details (which would not be surprising in the circumstances). Generally, I approached her evidence with caution.
It was evident that Ms Foweraker was a close personal friend of Ms Hudson and was very protective of her. It was equally clear that Ms Foweraker strongly felt that Ms Hudson had been treated poorly by C&W. These factors may well have coloured her evidence. I was also left with the impression that she had little actual recollection of key details. Again, I approached her evidence with caution.
It is not necessary to go into Mr Molchanoff's credit in any detail. His evidence on the disputed events and conversations, so far as it went, seemed to me not to have been seriously undermined in cross-examination. In the end he did not profess to have any great recollection of the detail of disputed conversations. But C&W's case did not depend upon him doing so.

2016 contract and variations

The 2016 contract took the form of an employment agreement dated January 2016. The agreement was styled "Executive Service Agreement" (ESA). It was in conventional form. After identifying the parties, it set out 23 operative clauses, then signature blocks where it was signed by both parties, followed by a schedule. The body of the agreement consisted of 8 pages and the schedule consisted of one page.
The agreement also contained an operative clause dealing with Ms Hudson's remuneration entitlements, including commission. Details of her commission structure were set out in the schedule, which was headed "Schedule A - Commission".
Among other things, the operative clauses also provided for a one-month notice period, during which Ms Hudson could be directed to take garden leave. It also contained post-employment restraints. Broadly speaking, these were non-competition, non-poaching, non-solicitation and non-interference restraints. The restraint period was one month. The restraint area was Australia (or alternatively, New South Wales or Sydney).
The 2016 contract was varied in 2018 and 2020, as described above. These variations were all made by letters that advised that all other terms remained unchanged.

2021 contract

Documentary evidence: The 2021 contract was preceded by a flexible working arrangement. A letter dated 3 February confirmed that Ms Hudson's application for such had been approved and set out the terms of the arrangement. On its face, the letter (if accepted) was to form part of the terms of Ms Hudson's 2016 contract (as amended). The arrangement was to last 12 months, commencing 1 March. If the arrangement ceased, the letter outlined, Ms Hudson would automatically revert to being covered by the 2016 contract terms (which was clarified to mean, on a full-time basis).
The 2021 contract comprised a two-page covering letter (dated 8 February), an eight-page employment agreement, and various annexures (confidentiality agreement, intellectual property assignment agreement, commission schedule and an individual flexibility agreement). The covering letter made clear that the contract was to replace Ms Hudson's existing employment arrangements.
The employment agreement was in a similar form to the 2016 ESA. It contained 21 operative clauses. One difference was that there was no operative clause dealing with her base salary. The pro rata reduction in base salary was only dealt with in the cover letter (and reflected in the commission schedule). The reduction in Ms Hudson's work hours (to 30.4 hours per week) was given effect in clause 10.
The attached individual flexibility agreement was made in accordance with clause 7 of the Real Estate Industry Award 2010 ("the award"). It made clear that while it was in force, the application of specific clauses of the award would be varied and explained those variations.
As I have mentioned, Ms Hudson made handwritten amendments to the 2021 contract, altering the twelve-week notice period and three-month restraint period to four weeks and one month, respectively. C&W could direct Ms Hudson to take garden leave for the notice period. The restraints were, broadly speaking, of a similar kind to those in the 2016 contract, with the addition of a non-solicitation restraint extending to potential customers or clients that C&W was cultivating at the time of termination, where Ms Hudson was directly or indirectly involved with the cultivation. The restraint area was Australia (or alternatively Sydney).
Ms Hudson signed the 2021 contract in April of that year (even though the commencement date was 1 March). There was no evidence that anyone at C&W actually noticed the handwritten amendments made by Ms Hudson and accepted them. But it appeared to be accepted that, objectively, C&W had accepted the amendments by conduct.
Witness evidence: Ms Hudson gave the following evidence about the 2021 negotiations in her first affidavit, affirmed 9 March this year: Prior to my return to work, I negotiated new employment terms with the Plaintiff, because I only wanted to work four days per week. My base salary was reduced on a pro rata basis to $80,000 and the four days was reflected in my contract, as per my original 2016 contract. Exhibited … is a copy of the employment agreement I was given on 8 February 2021. I noticed that the contract had increased my notice and restraint period from one month to three months, and I resisted this and negotiated it back down to one month, as per my original 2016 contract. There are hand-written notes on the agreement made by me that reflect this.
As I describe below, Ms Hudson went on to claim in the affidavit that she did not read the notice and post-employment restraint clauses in the 2022 contract, because she thought that no terms were changing apart from those concerning her remuneration. But Richmond J, in his interlocutory judgment, pointed out that Ms Hudson had presented no evidence of any written or oral representations to that effect from C&W.
On 31 March, following the delivery of his Honour's judgment, Ms Hudson affirmed a third affidavit. In that affidavit she stated that she had the following conversation with Mr Molchanoff in January 2021, while still on maternity leave (emphasis added): [Hudson]: 'Molch I want to come back, but only 4 days. Is that ok? I'm happy to go pro-rata?' Molchanoff: 'Yeah that's fine, I'll discuss it with HR and come back to you.' [Hudson]: 'Ok. No other terms to change. I'll just do 4 days and reduce pro-rata.' Molchanoff: 'Yeah easy.'
In her third affidavit Ms Hudson also gave an account of conversations with Mr Molchanoff in April 2021 (emphasis added): I returned to work in the office on 1 March 2021. On or about 7 April 2021 I had a conversation with Molchanoff to the following effect: Molchanoff: 'Hey Rosie, HR has been following me up and said you haven't signed your new contract, so they can't process your pay until that's done. Just get it done today and we'll sort it out.' [Hudson]: 'Oh, ok, will do'. Molchanoff: 'Make sure you review the terms and any notice or gardening leave terms too, and make sure they're only one month like when we moved here from CBRE.' I remember we were standing near the printer at the time. I then printed the contract. Later that day, I reviewed the terms of the 2021 Contract and realised the notice period and post-employment restraint had been increased to three months. I then had another conversation with Molchanoff to the following effect: [Hudson]: 'Molch, this says I have a three-month restraint and garden leave. I never agreed to this? Did you ask for it? What should I do? Molchanoff: 'No, it was probably just Victor [Nguyen] in HR. Just cross it out in pen and write 4 weeks in there and give it back. Let Antonia know too. I'll tell HR and make sure this doesn't happen again'. I then did what Molchanoff directed me to do, and crossed out and returned it to HR with hand-written amendments. I never heard anything back from them so assumed it was accepted.
Mr Molchanoff responded to this evidence in his April affidavit. Concerning the alleged January conversation, he affirmed: While I recall a conversation with Ms Hudson in around late January 2021 focussed on the terms upon which Ms Hudson was seeking to return to work from maternity leave, I do not now recall the specifics of that conversation.
Concerning the first alleged April conversation, he affirmed: In April 2021 it was necessary for me to speak with Ms Hudson to remind her to sign the Part-time Employment Contract. Ms Hudson and I did not have a conversation in the terms set out by Ms Hudson in that paragraph. We did not discuss the specifics of the employment contract such as the "notice or gardening leave terms ... " These are not matters that I have any specific knowledge or expertise in relation to, and any queries concerning those matters would need to have been raised by Ms Hudson with the HR team directly.
Concerning the second alleged April conversation, he affirmed: Ms Hudson and I did not have a conversation in the terms set out by Ms Hudson in that paragraph. I do not recall whether I had two conversations with Ms Hudson or whether I only had one conversation with her that day, however I do recall saying to he during the course of our discussion about the employment contract words to the effect of: "If there is anything you wish to raise, mark up the document, initial it and return it to HR so that they can deal with it."
Mr Molchanoff was cross-examined about the conversations. He agreed that a conversation had occurred in January, that Ms Hudson had requested to come back four days per week and go pro rata, and that he had said that was fine, he would discuss with HR and come back to her. He did not, however, recall a conversation about all terms remaining the same.
He maintained that he had a conversation in April chasing up Ms Hudson to return the contract, because HR was yet to receive it. He did not recall discussing specifics about terms, including notice or garden leave terms. He recalled the conversation being in the general vicinity of the printer. He also did not recall Ms Hudson asking him about the three-month restraint and garden leave clauses. He maintained that he had said if she was not happy with parts of the contract, she should make alterations and send them back to HR. When he was asked if he remembered saying "No, it's probably just Victor--", meaning Victor Nguyen in HR, - "just cross it out in pen, write four-weeks there and give it back. Let Antonia know too, and I'll tell HR and make sure this does not happen again"", he answered "I don't recall that specific conversation, no".
Ms Hudson maintained her accounts in a further affidavit. In cross-examination, it was put to her that she had come up with the alleged conversations after she had seen Richmond J's decision. She denied this but did not offer any alternative explanation for why the evidence only emerged in her third affidavit.
Factual issues and conclusions: Ms Hudson relied on her evidence of conversations with Mr Molchanoff in April 2021 as establishing representations that formed part of her misleading and deceptive conduct claim. This gives rise to a factual issue - whether those accounts should be accepted.
I accept, as Mr Molchanoff conceded, that a conversation occurred in which he followed her up about having not signed her contract yet and that he asked her to review and return it. Mr Molchanoff, may have, as he suggested, advised Ms Hudson that if she wasn't happy with any parts of the contract, she should alter it and send it back to HR.
But I am not willing to accept that Mr Molchanoff said, "I'll tell HR and make sure this doesn't happen again", nor that he earlier said, "Make sure you review the terms and any notice or gardening leave terms too, and make sure they're only one month like when we moved here from CBRE" (emphasis added). That is so notwithstanding that Mr Molchanoff gave evidence that he was unable to recall these aspects of the conversations rather than clearly denying them.
The following factors have informed that conclusion. First, there is no contemporaneous documentary evidence that the notice and restraint terms were discussed, let alone a representation made that they would remain the same.
Second, I think the context makes Ms Hudson's account inherently implausible. The contractual documents were being drawn up by HR. The parties would have understood that this might have involved alterations to the terms, and that these alterations might not be purely formal (indeed, the whole reason for the preparation and execution of the 2021 contract was the need to record Ms Hudson's shift to part-time work). Mr Molchanoff was not in charge of this process; Ms Hudson was dealing directly with HR. There would have been no reason for him to give her any assurances of his own about the terms.
Third, there is the circumstance that the critical alleged representations were not included in Ms Hudson's initial affidavits and only appeared after Richmond J pointed other deficiencies in her evidence. I did not find Ms Hudson's evidence about this in cross-examination convincing. The alleged conversations were an important part of Ms Hudson's case for an injunction and there was no reason, if they occurred, for them not to have been referred to.
Finally, the alleged representations are very specific to the dispute which has emerged. They are almost too good to be true. The well-known observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 about the frailties in oral evidence about earlier oral dealings are very much in point.
Although the January conversation was not pleaded as forming part of C&W's misleading and deceptive conduct, I also reject Ms Hudson's account of that conversation. For similar reasons, I am not convinced that it was agreed that no other terms would change. Such a statement was again overly specific, unsupported by contemporaneous evidence, responsive to deficiencies in Ms Hudson's case on the interlocutory application, and unlikely to have been said in circumstances where Mr Molchanoff was not solely responsible for preparing new contracts.

2022 contract

Documentary evidence: The documentary evidence begins on 25 July 2022, when Ms Hudson emailed Ms Foweraker requesting a base salary increase ahead of her return to work full-time: As discussed, I am planning to return to work next month and am requesting my base salary be increased to $180,000 exclusive of super per annum. I have been working at Cushman & Wakefield for over six years and have consistently been one of the top fee earners within the leasing team and the overall business. Other than 2020, I have written over $800,000 per annum in fees for Cushman & Wakefield, writing $2,400,000 last year. Taking into consideration my current appointments and upcoming targets anticipate that will remain one of the top fee earners for Cushman & Wakefield. I have calculated that childcare will cost me in excess of $96,200 per annum, therefore my current structure of $100,000 base salary is unfeasible. I need a secure monthly income to justify my return to fulltime work. I would appreciate if you would put forward this request to management for approval prior to my return to work next month. I look forward to hearing from you.
That led Ms Foweraker to send the following email on 26 July, forwarding Ms Hudson's request. It was addressed to Mr Fenn, with Mr Molchanoff copied. It read: See below from Rosie regarding increase in her base salary. Molch and I are supportive of the salary increase as Rosie is an integral part of our team. If you could please let me know what you need me to do to be able to action this request.
The base salary increase was approved internally on 4 August by Mr Fenn, in an email to Ms Sarah Greaves, Senior HR Business Partner (Transactions), ANZ. Mr Molchanoff and Ms Foweraker were also copied in the email. It read: Could you please help facilitate this salary increase request from Antonia for Rosie - see below. I am happy to approve with this increase. Rosie is an important part of the team, is a proven performer with a strong track record and with fees written YTD this will not impact the bottom line. YTD 2022 Rosie has written $210,000 in fees and will have a full year budget for 2023 of circa $700,000 that will more than cover the salary increase. Please call me if you need additional information or have queries.
Over the next few days, formal contractual documentation was prepared by HR. It appears that the documents were drafted by Ms Kourembanas under the supervision of Ms Delia Hawke, HR Operations Advisor. On 11 August Ms Hawke emailed Ms Foweraker (copying Ms Kourembanas): Please find the attached ESA contract for Rosie Hudson for your review. If you are happy with the contents please issue to Rosie. Once the letter is signed and returned we will make the changes in Workday and eWS. Please contact me if you have any queries.
The "attached ESA contract", in the form it took on 11 August, was not in evidence, but I infer that it was the same as the version returned by Ms Foweraker on 17 August, without the handwritten changes made by Ms Hudson (see below). That returned version took the form of a PDF document which I now describe.
The PDF document comprised 12 pages. Page 1 was in the form of a letter. Pages 2 to 12 were in the form of an agreement. Of those pages, 2 to 10 comprised the body, and 11 and 12 comprised an annexure, headed "Schedule A, The Commission Formula". The pages of the document (except for pages 1 and 11) were consecutively paginated and contained the words "Executive Service Agreement" in the right-hand footer.
The letter on page 1 was dated 10 August and was addressed to Ms Hudson from Ms Kourembanas, who had signed it. The letter stated: Transition to Full Time Employment Cushman & Wakefield (Agency) NSW Pty Ltd ("Company") wish to confirm your transition to full time work arrangements effective 16th August 2022 ("Effective Date") with continuity of service from 29th February 2016. The terms and conditions set out in this letter and the enclosed Employment Agreement including its attachments ("Agreement") will replace your existing employment arrangements from the 1 March 2021. You will remain in the position of Director Office Leasing, New South Wales ("Position"), based at 1 O'Connell Street, Sydney NSW 2000 and report National Director & NSW Head of Office Leasing. Your annual remuneration will be as follows: Base Salary ($AUD) $180,000.00 Superannuation currently at 10.5%, super cap $25,292 $18,900.00 Total Remuneration Package $198,900.00 Your Base Salary will be paid into your nominated bank account monthly. Particulars relevant to superannuation are set out below. Please read the contents of the Agreement carefully as it sets out the terms and conditions of your employment with the Company. You can confirm your acceptance of the Agreement by initialling each page and signing in the spaces provided in the duplicate Employment Agreement and attachment and returning it to the HR Operations Team at [Email] on or prior to the Effective Date. On behalf of the Company, we are pleased to continue working with you to achieve your aspirations and goals and those of the Company. Should you wish to clarify any details contained within this offer, or discuss any other issues please contact the HR Operations team.
The ESA began by setting out that the agreement was dated 9 August, and was between C&W, as the Company, and Ms Hudson, as the Executive. It contained 23 operative clauses and was in a similar form to the 2016 ESA and 2021 Employment Agreement. But it contained materially different terms.
Ms Hudson's varied base salary was set out in clause 5. That clause also referred to the commission schedule, as setting out the details of her eligibility to earn commission.
Ms Hudson's varied work hours were set out in clause 4. That clause also set out her duties, which she was to perform to the best of her ability and knowledge. She was to use all reasonable efforts to promote C&W's interests and enhance its reputation, while acting in its best interests. She was to report to the National Director (Mr Molchanoff) and NSW Head of Office Leasing (Ms Foweraker). She was not to (absent express prior approval) undertake appointments, positions or work during her employment involving competing with C&W, adversely affecting C&W, able to give rise to a conflict, or hindering the performance of her duties.
Clause 6 obliged C&W to reimburse Ms Hudson for reasonable out-of-pocket expenses. This was conditional upon C&W being satisfied that the expenses had been incurred in the performance of Ms Hudson's duties and in accordance with C&W's policies.
Clause 8 gave either party a right to terminate the employment at any time and for any reason by providing 3 months' notice. C&W could then decide to either terminate the employment immediately (and make a payment equal to Ms Hudson's base salary for the remainder of the notice period) or to direct Ms Hudson for all or part of the notice period "not to perform any work, to remain away from its premises and/or not to contact any customers or clients of the Group" - that is, to take "garden leave".
Clause 9, among other things, imposed an obligation on Ms Hudson to maintain the confidentiality of all Confidential Information (as defined), other than specified categories of information. By clause 10, Ms Hudson assigned to C&W various intellectual property rights.
Clause 11 concerned what was to occur after termination of employment. If Ms Hudson's employment was terminated for any reason, C&W was entitled to set-off amounts owed by her against amounts which it owed to her (except where not permitted by law). Ms Hudson was obliged to return all C&W property on termination. This included the "return" of Confidential Information. Clause 12 (extracted below at [249]) imposed post-employment restraints.
Clause 19 was an entire agreement clause. Clause 23 provided that the agreement could be executed in any number of counterparts which, taken together, would be one instrument, and that a party could execute the agreement by executing any counterpart.
At the bottom of the numbered clauses on page 10, there was a space for Ms Kourembanas to sign, executing the agreement for and on behalf of C&W NSW, but no space for Ms Hudson to sign. Ms Kourembanas appears to have inserted an electronic version of her signature, dated 9 August.
The two-page commission schedule outlined a commission structure which was consistent with Ms Hudson's 2021 contract, with amendments to reflect the increase in Ms Hudson's base salary. At the bottom of the second page was space for "The Company" and "The Employee" to sign and date. Ms Kourembanas inserted what appears to be an electronic version of her signature, on behalf of C&W NSW, dated 9 August.
On 17 August, six days after Ms Hawke had forwarded the agreement to Ms Foweraker, the following exchange of emails took place between them: Hawke to Foweraker, 17 August, 16:25 Just following up the signed ESA from Rosie please as I don't seem to have seen it come back in yet. Foweraker to Hawke, 17 August, 16:34 Please see attached.
The attachment sent by Ms Foweraker was the PDF document I have described above, with amendments by Ms Hudson. Those amendments were confined to the commission schedule. They appear to have been made electronically. As drafted, the table on the first page of the schedule (page 11 of the document as a whole) contained 2.5 times "multipliers", setting out that the commission-free component of Ms Hudson's fee pool would be 2.5 times her base salary. Ms Hudson put a line through ".5", amending these multipliers to "2". Lower down on the page were listed, at three points, the resulting fee threshold for Ms Hudson to earn commission, which was $497,250 (2.5 times her increased base salary). Ms Hudson put a line through those figures, and next to them inserted a text box with the figure "$397,800" (equal to 2 times her base salary).
On the second page of the schedule (page 12 of the document as a whole) Ms Hudson then placed her signature and inserted the date of 12 August in the spaces left for them. The date appears to have been inserted electronically; whether the signature was placed electronically is unclear but does not need to be resolved.
It appears that Ms Hudson's amendments were not detected by HR until early September. In evidence was correspondence indicating that Ms Greaves of HR (who had been on leave when the contract was issued) took up the issue with Mr Fenn on 5 September. Ms Greaves noted that Ms Hudson's amendments had not been approved by C&W. Ms Greaves also made the point that the amendments made by Ms Hudson were not binding unless countersigned by C&W.
On 9 September, Mr Fenn replied: Fenn to Greaves (Cc: Kourembanas), 9 September, 12:22 Just to clarify the history here- We lost our NSW head and a retention package that [included] reducing multipliers to [2] times was agreed between Tim Molchanoff, Antonia F, Jamie King and Rosie. So in short if the others are on 2 times multipliers then so should Rosie. Far from ideal I know but it's important we keep the team intact.
From this email, it appears that Mr Fenn may have mistakenly recalled Ms Hudson having agreed a different commission structure in December 2020, when she and others were considering leaving for CBRE. The letter in evidence showed that there was a change to Ms Hudson's commission structure, but this was that Ms Hudson would earn commission on her fees pool above 2.5 times her base salary, not 2 times (as Mr Fenn appears to have suggested). However, Mr Fenn's version of the history was apparently accepted by HR.
On 20 September, Ms Kourembanas emailed Ms Hudson: Please find attached your amendment letter for your COE Contract dated on 10th August. This amendment letter is in regards to your Commission Schedule changing from 2.5 times to 2 times your Total Remuneration. This reflects the mark ups that were made on your returned contract, Finance require the attached letter to be signed with no mark-ups to process.
The attachment took the form of a letter which was dated 20 September. It began: Addendum to Change of Employment Letter Cushman & Wakefield wish to confirm the below serves as an addendum to your Change of Employment letter dated 10th August 2022.
The letter then set out the text of the August commission schedule, revised to include the amendments which Ms Hudson had made to that schedule. It was signed on the second page by Ms Kourembaras. Ms Hudson signed and inserted the date of 20 September in the places indicated at the foot of the page and emailed the signed version back at 1:55 pm. This was apparently accepted by HR and there was no further communication between the parties concerning employment terms.
Witness evidence: In her first affidavit, of 9 March this year, Ms Hudson gave the following evidence about the circumstances in which she signed the August 2022 ESA: On 10 August 2022, I was issued with my most recent employment agreement with the Plaintiff, a copy of which is exhibited … . Clauses 12.2 and 12.3 of that agreement were different to the prior agreements, in that the restraint was now sought for twelve months. This was not made known to me by any staff of the Plaintiff and I was not otherwise aware of it. I remember that Antonia sent the letter and agreement to me via email, and there were several attachments. There was a separate attachment entitled "Schedule A The Commission Formula". Certain parts of that formula were highlighted and flagged for my attention. That is the only document I signed, electronically, and returned. I did not read the "Agreement" document nor sign or initial as I usually would have, because I thought from all of my discussions and our email correspondence that was not necessary because no other terms were changing. I did not turn my mind to this at the time because I trusted everyone involved and I had previously advised the Plaintiff I would not be signing off on such extensions during the signing of my prior agreement, so thought that issue was resolved. I had no reason to believe or understand that there was an intention on the part of the Plaintiff to change the terms of the restraint or notice period in my contract from the terms in my previous contracts. Had I known at the time that the contract purported to extend the notice period and restraint, I would have again objected and made hand-written amendments as I had done with the prior agreement. It was a difficult time in my life, as our second daughter had just been born in January, and I was a bit overwhelmed organising care for our girls while adjusting following the birth and organising my return to work full-time.
Ms Hudson's claimed belief that no terms of her ESA were changing except for the commission schedule was the subject of debate at the interlocutory hearing before Richmond J. In his judgment his Honour stated (J1 [7]-[8], emphasis added): There were a number of differences between the terms of the Contract [the August 2022 ESA] and [Ms Hudson's] prior contract. First, under cl 8.1 the period of notice of termination was extended from 1 month to 3 months. Second, cl 12.1 extended the period of the post-contract restraint from 1 month to periods from 3 to 12 months. Third, the term of her remuneration, both as to base salary and commission, were improved. The defendant gave evidence, which was not contested on this interlocutory application, that the first two changes were not made known to her by the plaintiff before she signed the document (beyond the fact that she received by email the letter attaching the Contract for signature referred to at [4(h)]), and that she did not read any part of the Contract apart from the 2 page Schedule A appearing at the end of the document, on which her signature appeared. She thought from all of her discussions and email correspondence that it was not necessary for her to read the document because no other terms were changing. However, the [defendant] does not give evidence that any representatives of the plaintiff said to her that none of the terms of her employment contract were changing apart from her salary and commission in Schedule A and there is no email correspondence in evidence which could be relied on for that purpose.
Following delivery of the judgment Ms Hudson stated in her affidavit of 31 March (emphasis added): In relation to the 2022 Contract, I now recall Antonia phoned me when the salary increase requested was approved, and said to me words to the effect of 'Rosie, your salary increase got approved! I chatted with Molch and there won't be any other contract changes and he said he sorted that in your last contract, so we'll get that sorted with HR.' I think that was on 9 August 2022. When I received the new contract, from memory the next day, I was not in the office but was at home minding my daughters. Antonia phoned me again and said words to the effect of 'Rose, your employment contract just came through. There's three parts to it. Just sign the commission schedule part as that's changed but other contract terms [are] staying the same so ignore the rest'. I did not read the bulky agreement document for this reason nor sign it. I was never followed-up about this by HR or Molchanoff or anyone else, and Molchanoff did not warn me as he had in the past. My pay was never withheld as it had been previously.
Ms Foweraker gave the following evidence in an affidavit of the same date: [16] Rosie returned to full-time work in August 2022. She emailed me on 25 July 2022 asking for an increase to her base salary. …. I agreed with this purely because of her skill and the amount of revenue she had derived for the company. It was not reflective of anything else. She did not bring on any new clients or win any business, and it was simply a result of hard work and effort. I discussed Rosie's email with Molchanoff that day, in words to the following effect: [Foweraker]: 'Molch, Rosie is asking for a pay rise to $180K inclusive of super. She wants to come back to work full-time but she'll have increased day care and nanny costs and stuff. She wrote $2.4 million in business last year and she's always been a top performer. We definitely want her back and I think she's worth it.' Molchanoff: 'Yeah I agree. We definitely want her back. Let's give it to her.' [Foweraker]: 'Alright so I'll get HR to issue a new contract with increased pay and up the four days to five. No other changes as per usual?' Molchanoff: 'Yep fine.' [17] Following this, … I then commenced the process of having Rosie's new contract arranged internally. Exhibited … is a copy of a internal email thread for that purpose ending on 10 August 2022, including Simon Fenn, which followed up on my conversation with him. There is no mention of any other change to Rosie's contract or employment terms, and especially not any post-employment restraint or increase. I never instructed anyone to increase Rosie's post-employment restraint or notice period, and was never informed by anyone that it would be or even asked about it. It was never my intention to increase the length of the restraint or notice period, and had I known a contract had been issued to Rosie along those lines, I would have objected and sought amendments to it. I assumed that issue had been resolved previously when Rosie corrected the prior increase to her 2020 contract, but unfortunately I did not read this contract because of that and because I trusted Molchanoff and my discussion with him (which I referred to in paragraph 16 above), and trusted that the human resources team would not make any further amendments of their own accord given my instructions. [18] … I received it [the new contract] in three documents, being a cover letter, an "agreement" document and a separate document called "Schedule A The Commission Formula". I recall discussing this with Rosie on or about 12 August 2022 and saying to her words to the effect of 'Just sign the commission formula as there are some changes highlighted in there, but I've sorted this with Molch already and your other contract terms won't be changing. It's the same as the letters we got when we got that "stay-on bonus" when CBRE approached us in 2020'.
In an affidavit in reply, Mr Molchanoff denied having had conversations with Ms Foweraker in the terms outlined by her. He recalled discussing Ms Hudson's pay increase request with Ms Foweraker and that he had supported approving that request. He gave evidence that he did not discuss with Ms Foweraker whether any of Ms Hudson's other employment terms would change, and that they had not discussed other terms more generally.
In cross-examination, Mr Molchanoff was asked if he, at the time the 2022 contract was being discussed, went to HR, or anyone in management, to tell them to ensure the restraints remained unchanged. He did not recall any conversations to that effect.
Among the topics on which Ms Hudson was cross-examined was what was issued, signed, and returned in August 2022. She acknowledged having received the body of the August 2022 ESA but maintained that she did not read it. The cross-examination continued: Q. Can I clarify this with you Ms Hudson. You say that the email that was sent to you contained three separate attachments; is that right? A. Yes. Q. But the reality is, it only contained one attachment; correct? A. It's three parts of attachment. Q. The email that was sent to you had one attachment; correct? A. I don't recall. Q. You don't remember? A. No. … [Counsel then referred Ms Hudson to the pagination of the PDF document] … Q. There was only one attachment? A. Yes. Q. You signed the last page of that attachment; correct? A. I signed the page which was advised by me by my manager at the time, to review the commission schedule-- Q. Can you answer the question? A. --which was attached. Q. Could you please answer the question, Ms Hudson. You signed the last page of that attachment? A. Yes.
Ms Hudson was then asked about the 20 September letter. She recalled an issue having been raised with her about the changes she made to the commission structure. She was taken to the letter and recalled receiving it . She was asked, "[y]ou can see that the letter started, "Cushman & Wakefield wish to confirm the below service", as an addendum to your change of employment letter dated 10 August 2022" and answered, "yes".
Ms Hudson was asked if she had "read this document carefully". The following was said: A. I read this document because the only change that I requested was on - sorry. HIS HONOUR: Please answer the question and if you can answer it yes or no, please answer it yes or no. A. Yes, I read this email that was sent to me. No, the question was about the document that is the attachment. WITNESS: Yes, I read the document. MAHENDRA Q. And you read the document carefully? A. Yes. Q. You understood that what the document was doing, was amending your contract confirming the change that had been made to your commission structure; correct? A. Yes.
Ms Foweraker, when cross-examined, confirmed that she had received an employment contract from HR, and had then sent it to Ms Hudson. She recalled there having been some issue around 17 August, where HR had not received a signed employment contract from Ms Hudson. Ms Foweraker was taken to the email she sent to Ms Hawke on that date. She confirmed that she had received a signed document from Ms Hudson. She was then asked whether it was one document she received from Ms Hudson. The cross-examination continued: A. I don't recall. Q. Do you recall sending [the email of 17 August, see [108] above] to Ms Delia Hawke? A. Yes. Q. And you attached one document; correct? A. I don't remember recall how many documents were attached. Q. We can see from your email, where it says attachments, you accept, don't you, there's only one attachment there? A. Yes, it would appear so. Q. If we then go to page 292, do your recall seeing the changes that Ms Hudson had made to her contract? A. No, I don't recall, but I do remember discussing it.
Counsel returned to that topic after an adjournment. Ms Foweraker confirmed that when earlier asked if Ms Hudson's employment contract was sent to her as one document, she had answered that she did not remember. Counsel took Ms Foweraker to [18] of her March affidavit, and her statement that she "received it in three documents, being a cover letter, an "agreement" document and a separate document called "Schedule A The Commission Formula". Ms Foweraker denied that this statement was incorrect. The cross-examination continued: Q. A moment ago when I asked you whether it was sent to you as one attachment-- A. I said I don't recall. Q. You don't recall? A. Yes. Q. So when you describe three documents are you saying it's one attachment with three documents or are you indicating that there are three separate attachments? A. Three documents. HIS HONOUR: Three attachments or three documents? WITNESS: Three documents. MAHENDRA Q. In one attachment? A. Yes.
Ms Foweraker was also asked in the course of her cross-examination about the September commission schedule signed by Ms Hudson. She did not remember having had any involvement.
Counsel also took Ms Hudson to her evidence of the conversations in her 31 March affidavit. Counsel drew Ms Hudson's attention to the word "now", in the sentence, "[i]n relation to the 2022 contract, I now recall Antonia". Ms Hudson denied that this was a conversation she had forgotten in her previous affidavits but acknowledged that she had not included it. Counsel put it to Ms Hudson that it was possible that she had this conversation with Ms Foweraker in relation to the 20 September addendum. Ms Hudson denied this.
Having confirmed that Ms Hudson did not include evidence of the conversations in her first two affidavits, counsel put it to her that she included that evidence to address what Richmond J had said in his Honour's March judgment (at J1 [8]). Ms Hudson denied that. As with the conversations with Mr Molchanoff, Ms Hudson acknowledged that she could have mentioned the conversations in her February correspondence but had not.
Counsel took Ms Foweraker to her evidence of a conversation (see above at [120]) she had with Ms Hudson in August. Counsel put it to her that she had made up the conversation and that it did not occur in those terms. Ms Foweraker denied both of these suggestions.
Factual issues and conclusions: Although Ms Hudson and Ms Foweraker agreed that Ms Foweraker forwarded to Ms Hudson the contractual documentation received from Ms Kouremabaras, and Ms Hudson returned the documentation in amended and signed form, there was no record of this in the evidence. This is surprising, as both parties would usually have had copies of such emails.
A possible explanation for the absence of evidence is that Ms Hudson in fact received the documentation in hard copy form after she returned to work, but the question was not explored in cross-examination. I proceed on the basis that the documentation was sent to Ms Hudson, signed on 12 August, and sent back, while she was at home even though there is no evidence of precisely when the relevant emails passed between Ms Foweraker and Ms Hudson or what those emails said.
The first question to be addressed is what Ms Hudson was issued with, signed and returned in August 2022. The question arose because of Ms Hudson and Ms Foweraker's affidavit evidence. Ms Hudson stated that Ms Foweraker had sent her the 2022 contract by way of multiple attachments, and that she had only signed and returned a two-page PDF headed "Schedule A The Commission Formula". Ms Foweraker also gave evidence about having received the 2022 contract from Human Resources in three documents - a cover letter, the agreement document and the commission schedule.
Despite the cross-examination which I have set out above, counsel for Ms Hudson appeared to maintain this line in closing submissions. Counsel maintained in writing that "[w]hat was returned was an electronically signed Schedule A styled "The Commission Formula" dated 12 August 2022". Orally, counsel added that Ms Hudson was not challenged on her evidence that the only document she signed and returned was the commission schedule. Counsel also submitted that although Ms Foweraker returned a single PDF attachment, that did not necessarily mean that the PDF was not set up into several attachments.
I do not accept these submissions. The email from Ms Foweraker to Ms Hawke returning the signed contract was in evidence, and had an attachment consisting of a single PDF document. These is no reason to think that the attachment issued by Ms Kourembanas on 10 August was any different. Contrary to counsel's submission, this was put to Ms Hudson in cross-examination and accepted by her. Ms Foweraker also accepted it in cross-examination. I find accordingly.
Next, I turn to whether Ms Hudson's and Ms Foweraker's accounts of the conversations about the August 2022 contract documentation should be accepted. In particular, the question is whether Mr Molchanoff gave an assurance to Ms Foweraker that the terms of Ms Hudson's employment contract were not otherwise being changed, and Ms Foweraker passed that on to Ms Hudson.
It is convenient to begin with the conversation which Ms Foweraker said she had with Mr Molchanoff on 25 July (quoted at [120] above). I think it is inherently implausible that Mr Molchanoff would have agreed that there would be "no other changes, as per usual" to Ms Hudson's employment terms. First, on 25 July the increase in Ms Hudson's salary still had to be approved by Mr Fenn, and the question of varying or not varying her other terms of employment would only arise once that happened. Furthermore, if it did happen, Mr Molchanoff would not be responsible for settling those terms. Rather, both parties to the conversation would have expected (as occurred in due course) that the documentation in question would be drawn up by HR. Neither of them could have known whether HR would propose the issue of a fresh set of contractual terms, let alone what form such terms would take. Nor is there any reason to think that there was some sort of "usual" practice in this regard. In fact, the evidence shows that the employment terms in the 2021 contract differed from the 2016 contact. This is exactly what one would expect where contractual documentation was administered centrally using (presumably) a standard form precedent.
Ms Foweraker's account of her conversation with Ms Hudson when she forwarded the contractual documentation to her on 11 or 12 August (quoted at [120] above) gives rise to further difficulties. In the first place, it is strange, when it was Ms Foweraker who had been asked by HR to review the documentation, for her to attribute her failure to read it to her "trust" in Mr Molchanoff, who, so far as the evidence goes, was not then involved in the process at all. Furthermore, the statement Ms Foweraker attributes to herself - that the documentation was "the same" as the 2020 stay-on bonus documentation - was incorrect. No fresh contract had been issued in 2020.
There are also difficulties with Ms Hudson's version of events (set out above). In the first place, her evidence that she received three separate documents, as already noted, was incorrect in fact. Furthermore, on her account, Ms Foweraker reported that her employment terms were not changing because they had been "sorted" with Mr Molchanoff in 2021. But that was not supported by Ms Foweraker, who attributed the absence of change to some sort of "usual" practice and said she mentioned the 2020 amendments, not the 2021 contract.
Against this background, and the doubts I have about the reliability of Ms Hudson's and Ms Foweraker's evidence generally, I do not accept that Mr Molchanoff gave the assurance to Ms Foweraker that Ms Hudson's contract terms would not change, or that Ms Foweraker passed any such assurance on to Ms Hudson. As with the alleged representations by Mr Molchanoff in 2021, the alleged assurances are too good to be reliable, especially when they first emerged after the deficiencies in Ms Hudson's case had been pointed out by Richmond J.
Finally, I make a further comment on the factual basis to Ms Hudson's misleading and deceptive conduct claim. I have already found that the representations attributed to Mr Molchanoff in 2021 have not been established. Even if they had been established, it hardly seems likely that, in deciding how much of the August 2022 contractual documentation she needed to read, Ms Hudson would have cast her mind back to the negotiations which had taken place on a separate issue in early 2021. She did not claim in her affidavit to have done so. I am not satisfied that as a matter of fact that Ms Hudson relied on any such representations in negotiating the 2022 contract.

Customer connection

It was not in dispute that personal relationships with landlords and tenants were a key part of Ms Hudson's role. Ms Hudson herself accepted that her commission structure meant she had a financial incentive to invest in those relationships. She also accepted that those relationships enabled her to gain an intimate knowledge of client leasing needs.
The evidence showed that Ms Hudson was required to meet with existing clients regularly. She was also encouraged to meet with others where building relationships could be of benefit to C&W. All of these meetings occurred at the expense of C&W, who would reimburse Ms Hudson. In their evidence, Ms Hudson, Ms Foweraker and Mr King emphasised limitations in Ms Hudson's role, relative to more senior employees. But they did not detract from the foregoing observations.
Also in evidence were examples of marketing material holding Ms Hudson out as a key contact for C&W's leasing activities on two buildings. On each building she was listed alongside another C&W representative, and on another the contact details of two CBRE representatives were also listed (that was a co-appointment with CBRE).
Much of the evidence on this topic was concerned with particular appointments held by Ms Hudson at the time of her resignation, and individual entries on an expense report in the months leading up to her resignation (and following her return to full-time work). Four appointments were focused on, which had been identified by Mr Molchanoff in his 31 March affidavit. In cross-examination, Mr Molchanoff accepted that these were the four appointments that C&W held concerns about. In re-examination, Mr Molchanoff clarified that these were the significant appointments that Ms Hudson was involved in, and the key ones that C&W were concerned about.
These were all appointments that Ms Hudson held at the time she entered the 2022 contract. Ms Hudson had been replaced on each of those appointments while on maternity leave. She had been working on one or two other appointments, as well.
Mr Molchanoff was cross-examined on the four appointments. He accepted that one of those, a co-appointment, with Colliers, is no longer with C&W, because the landlord decided to slim down and just go with Colliers. On the other three, Mr Molchanoff conceded that C&W had moved employees on to these following Ms Hudson's departure, and each now had an employee who had prior experience on the corresponding appointment while Ms Hudson had been on maternity leave.
When challenged in cross-examination about his concerns about one of these appointments, Mr Molchanoff maintained that there was pressure to keep it after Ms Hudson and Ms Foweraker's departure (where both were appointed on the relevant building). Counsel put it to him that it would actually take time to re-establish Ms Foweraker's connections. In response, Mr Molchanoff maintained that it was not solely dependent on one person but on the team assigned to the appointment.
Mr Molchanoff also gave evidence about the length of time it would take to replace Ms Hudson. In his first affidavit, he affirmed that that because of the nature of Ms Hudson's role, and in particular the deep relationships she developed with the clients that she represented, he considered: It could take up to twelve months (or even longer) in order to: (a) find an adequate replacement to fulfil Ms Hudson's role, including the time taken to negotiate an employment agreement with that person; and (b) take the necessary steps to have that replacement develop a relationship with the clients formerly represented by Ms Hudson similar to the depth of relationship which Ms Hudson had with those clients. Mr Molchanoff reiterated this evidence in a later affidavit. He added that, on the first step, based on his market experience, there were not many people with Ms Hudson's experience and expertise. On the second step, he added that, based on his experience, there was a significant time lag in developing the relationships he had mentioned.
In cross-examination, Mr Molchanoff explained that his estimate was informed by matters of timing. He explained that typically people are more likely to move early in a calendar year - the applicable financial year, for commission purposes, for most agencies - so they can get the benefit of commission from the previous year.
Confidential information: A considerable amount of evidence was directed to evidence of confidential information that Ms Hudson came into contact with. Nonetheless, a lot of this was at a high level of generality. As will be seen, I did not base my conclusions on confidential information. I concluded that C&W had a protectable interest based on customer connection. I did not consider that confidential information would support longer restraints as being reasonably necessary. In those circumstances, I do not propose to summarise the evidence on confidential information further.

Resignation

In evidence was a signed copy of Ms Hudson's written employment contract with JLL, dated 1 February 2023. It had a commencement date of 2 March, and title of "Senior Director, Office Leasing NSW". It had a notice provision of three months, including provision for garden leave. It had a total salary package, exclusive of commission, of $150,000. Ms Hudson was to be paid commission on revenue above 2.5 times $150,000, at a rate of 50%. This was less favourable than at C&W, but she was to receive a sign-on bonus of $1.3 million.
There was also a post termination restraint period of six months (or alternatively three or two months). The terms also contained an acknowledgement that the restraints were reasonable and necessary to protect JLL's interests. In cross-examination, Ms Hudson confirmed that she had freely given that acknowledgment, and volunteered that a lawyer had reviewed the proposed contract at her request.
Ms Hudson's resignation letter, addressed to Mr Molchanoff and dated 31 January, was sent as an email attachment on the afternoon of 2 February. It read: Dear Tim, I would like to inform you that I am resigning from my position as Director at Cushman & Wakefield, providing you with my four-week notice period effective from today. Thank you for the opportunities for professional and personal development that you have provided me during the last seven years. I have enjoyed working with you, the team and the business, and appreciate the support provided to me during my time with Cushman & Wakefield. My last day at Cushman & Wakefield will be 1 March 2023. I will ensure that I work with yourself and the team to ensure a smooth transition and adhere to the existing conditions and duties within my contract. Yours sincerely,
Ms Hudson was then sent the following letter by C&W, dated 3 February: Dear Rosie, Confirmation of resignation We acknowledge your resignation received 1 February 2023 and want to confirm the arrangements for your three month notice period effective 1st February 2023 to 1st May 2023 inclusive. In accordance with the terms of your employment agreement dated 9 August 2022, you will remain on Garden Leave for the remainder of your notice period. Please do not perform any work at this time and/or attend any sites or make contact with any other staff, customers or clients of the Group for the remainder of your notice period. The Company may still contact you if necessary, during your Leave to request information related to your employment and you are required to make yourself available to attend to any such matters at our request, should they arise. Payments (i) Final payment This will be paid to you in the next available pay cycle. (ii) Future commission: In accordance with the provisions of Schedule A of your Executive Service Agreement, for all deals that you have generated and invoiced during your time with Cushman & Wakefield, we will pay you any commission owing on these once the fees have been received by the Company and cleared through the Company's bank account - after which, your commission will be paid on the 15" of the month thereafter. Post-employment obligations I wouId like to take this opportunity to remind you of certain obligations in your Contract of Employment. These include the restraints set out in clause 12, your obligations of confidentiality in clause 9 and the statutory prohibition not to disclose confidential information or misuse Company information (section 183 of the Corporations Act 2001). In particular, I would like to draw to your attention to the restraints in clause 12, which are extracted below for reference: 12.1 The Executive must not, without the prior written consent of the Company (on the Executive's own account or for and on behalf of any person or entity) for the Restraint Period: a. participate in, carry on, assist or otherwise be directly or indirectly concerned with, as a director, consultant, adviser, contractor, principal, agent, manager, employee or partner, any business or activity that directly competes in the Restraint Area with any part of the business of the Group with which the Executive was involved at any time during the Relevant Time; b. solicit or encourage any director, contractor or employee of the Group with whom the Executive has worked or had dealings at any time during the Relevant Time to leave their employment or engagement with the Group; c. solicit, canvass, approach or accept any approach from any person or entity who was at any time during the Relevant Time, a customer, supplier, distributor or licensee of or to the Group with whom the Executive has worked or had dealings with a view to establishing a relationship with or obtaining the custom of that person or entity in a business which is the same as or substantially similar to that part of the Group's business in which the Executive was involved at any time during the Relevant Time; d. interfere seek interfere, directly indirectly, with the relationship between any member of the Group and its customers, suppliers, distributors, licensees, directors, employees, contractors or agents in the conduct of the Group's business; 12.2 Restraint Area means: a. Australia; b. New South Wales Restraint Period means: a. 12 months; Retention Payment Claw back I would also like to draw your attention to the Amendments to your Compensation letter dated 21st December 2020, pursuant to which you were issued a one-time retention payment in the amount of AUD. As outlined in the letter, upon termination of employment for any reason except redundancy, death in service or permanent impairment you are required to repay the retention payment as outlined in the claw back table. Due to you resigning from your role on 1st of February 2023, 50% of your retention payment is now due to be re-paid to the Company. The Company reserves the right to, the extent permitted at law, to withhold any monies owed by you to the Company from any monies due from the Company to you. Return of company property You are required to hand over all Company property, including keys, security passes, IT equipment, company credit card (if applicable), manuals etc. Please contact Lisa Lee [Email] to arrange a courier if required. Should you have any questions or queries in relation to your post-employment obligations, please contact either myself or Olivia Vier on [Email] Please kindly sign where indicated below, to indicate your acknowledgement to the terms of this letter. On behalf of the Company, I would like to thank you for efforts and contribution during your time with us. Your sincerely, Tim Molchanoff
The above letter was sent to Ms Hudson by post and email. The email was sent by Ms Kourembanas on 6 February (with Mr Molchanoff copied). She asked Ms Hudson to review, sign and return the letter, after which she would be advised on next steps.
Ms Hudson sent the following reply to Ms Kourembanas and Mr Molchanoff on 7 February: Hi Madeline and Tim, Thank you for your email. When I returned from Maternity leave in August 2022, I made a request to my Manager Antonia Foweraker, and the business for an increase in base salary and return to full-time employment after having my second child. I was very excited and appreciative of Cushman & Wakefield supporting my request and acting in good faith, signed the contract with the understanding the terms were the same as my original employment contract from 2016. I was surprised and disappointed to find that the gardening leave/notice period had been changed from one month to three months without discussion or agreement. After reviewing your email and referring to my contract which was signed on 9 August 2022, I was shocked to see that the contract had actually stipulated a three-month notice period, not the one month notice period which was agreed in my 2016 contract of commencement with Cushman and Wakefield. As you can appreciate, I had just returned to work after looking after two young children and had trust in the business that the conditions of my contract would remain unchanged. The August 2022 contract had a critical change to the notice of termination from one month to three months which had not been disclosed to Antonia nor communicated or agreed to by me. As my focus was on the requests of my base salary, commission schedule, and fulltime employment I had no reason to seek legal advice as I was eager to show commitment to Cushman & Wakefield and recommence employment straight away. I feel not having this critical change communicated to me by management or anyone in the business was misleading and deceptive. When I returned to work from my first maternity leave in March 2021 and updated my employment at Cushman & Wakefield to part-time, the terms and conditions were on the basis of my original employment contract in 2016 and in light of this I was of the understanding this would be the case for my transition back to full-time employment with Cushman & Wakefield. In consideration of the above, I ask that you honor the original terms and conditions of my 2016 contract with the notice period being one month effective from 1 February 2023. Feel free to give me a call to discuss the above. Thanks.
Ms Kourembanas did not respond to this email until 20 February. At that point, she thanked Ms Hudson for her patience, advised her that her request was with C&W's legal team for review, and reminded her that she was on garden leave and still a C&W employee until 1 May. In the intervening period, Ms Hudson had exchanged text messages, and called, Mr Molchanoff.
Ms Hudson sent the following email to Ms Kourembanas (copying Mr Molchanoff) on 22 February: Hi Madeleine, To clarify, and further to my email of 7 February 2023 below, I did not agree to a notice period of three months and am not bound by it. Accordingly, I will not be on garden leave for an additional two months, and I am not expecting to be paid for that period. I will be repaying the claw-back as per my contract. I trust that concludes the matter. Thanks,

Applicable notice and post-employment restraint periods

As already mentioned, the contention for C&W was that Ms Hudson was bound by the terms of the contract issued by HR in August 2022, which was signed by Ms Hudson, and was then amended in September 2022 to include a revised version of the commission schedule. In particular, the August 2022 terms provided for twelve-month post-employment restraints and a three-month notice period.
Neither counsel expressly analysed C&W's contention in terms of offer and acceptance. But it seems to me that C&W's case necessarily amounted to the following. C&W's letter to Ms Hudson dated 10 August and enclosing the August contract, once forwarded to Ms Hudson by Ms Foweraker, was an offer. By signing the contract but making variations to the commission schedule, and returning it to C&W via Ms Foweraker, Ms Hudson made a counter-offer. C&W's letter of 20 September was a further offer (albeit in substance the same as the counter-offer). That further offer was accepted by Ms Hudson when she signed and returned the letter.
It is notable that, if this is the correct analysis, there is no need to consider the legal effect, if any, of Ms Hudson's signature on the August commission schedule. Even if she had not signed that schedule, C&W could have relied upon her signature on the 20 September letter. Nevertheless, both parties focussed their arguments on the events in August, and I will deal with the matter on that basis. But after doing so I will go on to consider the matter on the basis that the critical date is in fact 20 September 2022.
I understood the primary contention by counsel for Ms Hudson to be one based on intention to create legal relations. This was that Ms Hudson only intended to create legal relations in a qualified way. Counsel submitted that, objectively construed, Ms Hudson's August signature evinced an intention to be bound by the commission schedule only. This intention, counsel submitted, did not extend to the body of the contract (including the notice and restraint provisions). The effect, as I understood counsel's submission, was that the notice and post-employment restraint periods in the 2021 contract continued to apply.
Counsel's argument acknowledged that Ms Hudson clearly intended to create some sort of legal obligation. The argument was premised on the idea that signing a contract might, objectively construed, evince an intention to be bound only by some parts of that contract. I was not referred to any case in which any such doctrine of partial intent has been recognised. But the argument fails on well-established principles in any event.
Counsel for C&W understandably referred to the decision of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [57]. That frequently-cited passage reads (emphasis added): If there is a claim of misrepresentation, or non est factum, or if there is an issue as to whether a document was intended to affect legal relations or whether, on the other hand, it was tendered as a mere memorandum of a pre-existing contract, or a receipt, or if there is a claim for equitable or statutory relief, then even in the case of a signed document it may be material to know whether a person who has signed it was given sufficient notice of its contents. The general rule, which applies in the present case, is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document.
The test for determining whether there is intention to create legal relations is an objective one: see Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102 at [64]). The parties' subjective intentions are irrelevant. The general rule stated by the High Court reflects those propositions.
In my view, the objective circumstances clearly negate the idea that any intention to create legal relations was partial, in the sense that it did not extend to the body of the contract. Those circumstances are as follows.
The most important consideration is the form of the document Ms Hudson signed. As I have found, it was a single PDF document. Moreover, the commission schedule was not a stand-alone contract, capable of setting out the terms of the employment relationship on its own. It was an annexure - that is, it had to be an annexure to something. In the context, it could only be an annexure to the body of the contract.
It is true that Ms Hudson only signed the commission schedule and did not sign the body of the contract. It may have been somewhat strange for C&W to be provided with a place to sign at the end of the body of the contract when Ms Hudson was not. But the fact remains that the document was drafted in that way, and Ms Hudson signed in the only place designated for her signature. Once it is accepted that the commission schedule could not stand on its own, the objective interpretation of Ms Hudson's signature was that she assented to, and intended to create legal relations in terms of, the whole document.
I think that the broader surrounding circumstances reinforce that conclusion. Four factors stand out.
First, the parties had on several earlier occasions signed formal documents changing the contractual relations between them. Some of these documents varied an existing contract. Another (the 2021 contract) was in substitution for an existing contract.
Second, it was Ms Hudson who formally requested a variation of her contract, by way of a salary increase upon returning to work full-time. The contract that was produced stemmed from that request.
Third, the covering letter referred to the August 2022 agreement in formal contractual terms and as replacing prior arrangements. In particular, the letter stated: The terms and conditions set out in this letter and the enclosed Employment Agreement including its attachments ("Agreement") will replace your existing employment arrangements from the 1 March 2021. … Please read the contents of the Agreement carefully as it sets out the terms and conditions of your employment with the Company. You can confirm your acceptance of the Agreement by initialling each page and signing in the spaces provided in the duplicate Employment Agreement and attachment and returning it to the HR Operations Team at [Email] on or prior to the Effective Date. … Should you wish to clarify any details contained within this offer, or discuss any other issues please contact the HR Operations team.
Fourth, after the 2022 contract was returned (including the issuing and returning of the signed 20 September letter), the parties took no further action. They thereby objectively signified that they had achieved their intended result of creating a new contract.
Counsel for Ms Hudson referred me to the counterparts clause (clause 23) in the August 2022 agreement (summarised above at [105]), and to the references to initialling each page in the cover letter instructions. Counsel pointed out that Ms Hudson did not sign and return a counterpart of the agreement. Nor did she initial each page. In counsel's submission, these matters meant that Ms Hudson did not execute the employment agreement. This, counsel submitted, separated the present case from the Toll line of cases, where a party's signature is conclusive of their agreement to terms - the signature was by way of assent to the commission schedule only.
In fact, Ms Hudson did not initial the first page of the commission schedule either. But putting that to one side, I do not think that counsel's arguments advance the position. That is for two reasons. First, both the covering letter instructions, and clause 23, were cast in permissive language. Ms Hudson could confirm her acceptance by initialling each page, and the agreement could be executed by way of counterparts. But this was not mandated. Even if it had been, this would not have been effective to prevent agreement by other means. Second, the arguments are overwhelmed by the objective circumstances which I have set out above. Those circumstances clearly demonstrate, to my mind, assent (subject to the handwritten variations) to the terms of the agreement as a whole, not just the commission schedule.
Counsel for Ms Hudson also referred to various pieces of email correspondence, conversations between Ms Hudson, Mr Molchanoff and Ms Foweraker, and other evidence. This evidence did not alter my conclusion expressed above, that objectively construed, Ms Hudson intended to be bound by the entire 2022 contract. Indeed, the relevance of much of this evidence to the present issue was questionable - in particular, it is not clear how internal C&W correspondence, to which Ms Hudson was not a party, could be relevant (see M Leeming, "Subjective intention in the law of contract - its role and limits" (Speech, Bar Association of Queensland, University of Queensland and Supreme Court of Queensland Library, 1 June 2023) 6).
Ms Hudson cannot have been unaware when she signed the commission schedule that the preceding pages of the employment agreement contained contractual terms. It seems to me likely that she would have skimmed the covering letter and the employment agreement before doing so. But even if she did not read the agreement thoroughly, the general rule identified by the High Court in Toll applied and she was bound by its terms.
This disposes of the principal contention put forward on behalf of Ms Hudson. But counsel for Ms Hudson advanced a number of other arguments.
The first of these was that a contract had come into existence prior to the 2022 contract having been issued. It was argued that this was reached by two emails. First, Ms Hudson's email to Ms Foweraker on 25 July, requesting an increase in her base salary upon her return to full time work. Second, an email of Mr Fenn on 4 August, appearing to approve the base salary increase.
The primary difficulty with this argument, as identified by counsel for C&W in their reply submissions, was that Ms Hudson was not a party to the email sent by Mr Fenn. This meant that any acceptance had not been communicated at that time. There is also no evidence that the parties by their conduct intended to be bound. Counsel for C&W made the point that Mr Fenn's email, on its terms, was merely a request to Ms Greaves from HR to facilitate the salary increase. That perhaps overlooks the fact that Mr Fenn expressly approved the salary increase. Nonetheless, it falls short of evincing an intention to be bound as between C&W and Ms Hudson. Even if a contract had been formed at that earlier time, the 2022 contract would have replaced it.
The second argument was that the 2022 variations were unenforceable because they were non-compliant with the Real Estate Industry Award 2020. The parties agreed that the award applied to Ms Hudson.
Counsel for C&W submitted that Ms Hudson had not pleaded any breach of the award or of the Fair Work Act 2009 (Cth) (which counsel for Ms Hudson also referred to in the context of the award argument), and that it was first referred to in an outline of opening submissions served the afternoon before the commencement of the hearing. In my view, this point is well taken. Counsel's argument clearly required pleading so as to avoid surprise. I would reject it for that reason alone. In any event, I am not satisfied that the argument is sound.
Counsel for Ms Hudson referred to the requirements of clause 5 of the award, concerning individual flexibility arrangement. The clause relevantly provides: 5.1 Despite anything else in this award, an employer and an individual employee may agree to vary the application of the terms of this award relating to any of the following in order to meet the genuine needs of both the employee and the employer: (a) arrangements for when work is performed; or (b) overtime rates; or (c) penalty rates; or (d) allowances; or (e) annual leave loading. … 5.5 An agreement must result in the employee being better off overall at the time the agreement is made than if the agreement had not been made. … 5.11 An agreement may be terminated: (a) at any time, by written agreement between the employer and the employee; or (b) by the employer or employee giving 13 weeks' written notice to the other party (reduced to 4 weeks if the agreement was entered into before the first full pay period starting on or after 4 December 2013). NOTE: If an employer and employee agree to an arrangement that purports to be an individual flexibility arrangement under this award term and the arrangement does not meet a requirement set out in section 144 then the employee or the employer may terminate the arrangement by giving written notice of not more than 28 days (see section 145 of the Act). …
Counsel also relied upon clause 26, which relevantly provides (emphasis in original): 26.1 If an employer makes a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, the employer must: (a) give notice of the changes to all employees who may be affected by them and their representatives (if any); and (b) discuss with affected employees and their representatives (if any): (i) the introduction of the changes; and (ii) their likely effect on employees; and (iii) measures to avoid or reduce the adverse effects of the changes on employees; and (c) commence discussions as soon as practicable after a definite decision has been made. … 26.5 In clause 26 significant effects on employees, includes any of the following: (a) termination of employment; or (b) major changes in the composition, operation or size of the employer's workforce or in the skills required; or (c) loss of, or reduction in, job or promotion opportunities; or (d) loss of, or reduction in, job tenure; or (e) alteration of hours of work; or (f) the need for employees to be retrained or transferred to other work or locations; or (g) job restructuring. …
Counsel for Ms Hudson appeared to submit that clause 5 meant that variations must be by express agreement, and employees must be better off overall. Counsel also submitted that the 2022 variation constituted a termination of flexible working arrangements. Counsel submitted, with reference to clause 26, that this meant variations that would affect Ms Hudson in a significant way needed to be express and the subject of notice, consultation and discussion.
Counsel for Ms Hudson submitted that the variations (other than to remuneration) had been achieved in non-compliance with clause 26 of the award. Counsel submitted that this was because: the variations had not been drawn to Ms Hudson's attention; the variations had not been the subject of the requisite discussion and negotiation; Ms Hudson had not been required to acknowledge the variations by way of execution; and the variation was only obtained by non-disclosure.
As at present advised, I agree with counsel for C&W that clause 5.1 has no operation beyond the matters set out in it. Restraint and notice provisions are not among those matters. They are not, therefore, subject to the better off overall requirement in clause 5.5. Even if they were, I do not think that the better off overall requirement continued to apply to the 2022 contract. Counsel for Ms Hudson appeared to accept that the individual flexibility arrangement was terminated by that contract - I think that is right (based on cl 5.11(a)), but it would also mean clause 5.5 has no application.
Counsel for C&W submitted that the clause is not intended to capture changes in the terms of employment of one employee. It is concerned, counsel submitted, with changes affecting employees, plural. Counsel also referred me to Lane v Arrowcrest Group Ltd (1990) 27 FCR 427, where von Doussa J construed a similar provision in another award (referring to "major changes") as being "directed to the impact which alteration to a presently existing situation will have on management and administration".
I agree that clause 26 should be construed in the same way. The clause is concerned with operational changes affecting the employer's business as a whole. I find it difficult to imagine a situation where such changes would affect one employee only, but that question does not need to be decided. In my view, even if the word "employees" can apply to a single employee, the changes to Ms Hudson's terms of employment were not "major changes" to the operation of C&W's business and were not caught by the clause.
The third argument from counsel for Ms Hudson was that the 2022 contract was unenforceable because it was a unilateral attempt to vary the agreement reached on 4 August with Mr Fenn. Having found that no such earlier agreement was reached, that argument must fail. In any event, the 2022 contract replaced any earlier agreement and was not unilaterally reached.
Fourth, there was a suggestion in counsel for Ms Hudson's written submissions that Ms Kourembanas, of C&W HR, had imposed new terms on Ms Hudson without authority. This was not clearly articulated as a separate argument and so I do not propose to deal with it in any great detail, as a matter of fairness. But to the extent that it was argued, it should be rejected. The mere fact that C&W has brought these proceedings indicates that C&W authorised the terms. Moreover, it is clear that the corporate practice of C&W was that its HR Department was responsible for the finalisation and issuing of employment contracts. So much was clear from the internal C&W correspondence, which repeatedly made reference to the need for formal documentation to be prepared and issued. It was readily conceivable, indeed at times expressly adverted to, that this would involve a new agreement or contract, rather than a variation.
The final argument was that there was no consideration for the increased restraint and notice periods in the 2022 contract. Counsel produced calculations to demonstrate that Ms Hudson was worse off under the base salary increase which she had obtained. Counsel also referred to various matters said to indicate that the 2022 contract was not entered into in substitution for existing arrangements.
It is that second point which is decisive of this issue, as counsel for C&W submitted. Counsel for C&W referred to the decision of Pembroke J in Charltons CJC Pty Ltd v Fitzgerald [2013] NSWSC 350. The critical passage is at [26]: In any event, as a matter of legal analysis, whenever parties agree to discharge an existing contract and replace it, their mutual promises to discharge the original agreement and abide by the new agreement will constitute sufficient consideration - unless their conduct is simply an artifice. The point was stated succinctly in Figjam Pty Ltd v Pedrini [2005] NSWSC 221 at [15]: [I]f the existing duty is discharged by a contract which includes a promise with the same content as the original promise, the promise will be regarded as binding because consideration is present in the parties' agreement that the original duty is to be discharged ... Unless the circumstances are such that it is impossible to interpret the second contract as a termination of the first, a court will discern an implied agreement to terminate the original contract and consideration will be present.
In Dundoen Pty Ltd v Richard Wills (Real Estate) Pty Ltd [2020] NSWSC 1534, Sackar J was faced with a comparable absence of consideration argument in a restraint setting. Having set out the relevant principles, including Charltons, at [58], his Honour reasoned (at [140]-[141]): The contract here emphatically concludes as a prelude to signature the following: The terms and conditions set out in this Employment Agreement, including the following Reference Schedule and any associated annexure, are accepted and replace any previous agreements and understandings. In my view that provision is enough to indicate that the written agreement was intended to replace the original oral contract. But there are other provisions which equally point to that outcome. Sackar J went on to refer to other parts of the contract that reinforced the point.
By parity of reasoning to that in Dundoen, I reject counsel for Ms Hudson's contention. The 2022 contract was no mere artifice - it made material changes to the terms of Ms Hudson's employment, which I have summarised earlier. As I have also explained, it was clearly expressed as being in substitution for the existing employment arrangements.
For those reasons, even focusing on what was signed in August, Ms Hudson was bound by the 2022 contract. But as I noted earlier, I think the critical date is 20 September - when the revised commission schedule was signed.
Counsel for Ms Hudson did briefly address the 20 September letter in her argument. In counsel's submission, the letter was an attempt to start the August variation process over again, which failed for the same reasons as (so counsel had submitted) the August attempt had. Counsel pointed to the reference in the August covering letter to "terms and conditions set out in this letter and the enclosed Employment Agreement including its attachments" but the non-inclusion of those terms in the September letter. Counsel also submitted that the very fact that the amendment was described as an "addendum" indicated that it was a distinct and severable agreement between the parties. Counsel submitted that, in these circumstances, by signing the revised commission schedule, Ms Hudson only indicated assent to the terms of that Schedule, and not to the earlier terms.
I do not accept these submissions. I have already pointed out that the commission schedule was not a stand-alone document, and only made sense as an annexure to the body of the employment agreement. This was a matter of substance which could not have been overcome by the label used by the parties for the schedule. But, in fact, the term "addendum" fits comfortably with it. The evident objective intent of the parties was to replace the August commission schedule with a fresh schedule and be bound by the entire employment agreement in that amended form.
Seen in this light, the contention that there was only a partial intention to create legal relations is even more clearly unsustainable. An offer was made directly by HR to Ms Hudson on terms incorporating the body of the August agreement by reference - she was not at that point dealing with Ms Foweraker nor Mr Molchanoff. Ms Hudson signed a document accepting that offer. No question about intention to create legal relations (or about assent) can arise.
Ms Hudson's contentions therefore fail. She was contractually bound by the August 2022 employment agreement terms, including the notice and post-employment restraint periods specified in those terms.

Rectification

By way of alternative to her incorporation contention, Ms Hudson sought rectification of the 2022 contract. In her cross-claim, Ms Hudson sought orders for rectification of one of two kinds: 1. replacing the whole of the "2022 Document" (defined as the 9-page document entitled "agreement" which formed the body of the contract dated 9 August 2022) with the "2021 Terms" (the April 2021 agreement signed by Ms Hudson including her handwritten variations). 2. replacing clauses 8 and 12 of the 2022 Document (concerning termination and restraints) with clauses 17.1 and 16.2, respectively, from the 2021 Terms.
The parties agreed that the relevant principles were set out in Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85 at [103]-[104] (citations omitted): Rectification is an equitable remedy, the purpose of which is to make a written instrument "conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately". For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an "agreement" between the parties in the sense that the parties had a "common intention", and that the written instrument was to conform to that agreement. Critically, it must also be demonstrated that the written instrument does not reflect the "agreement" because of a common mistake. Unless those elements are established, the "hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties" cannot be displaced. The issue may be approached by asking - what was the actual or true common intention of the parties? There is no requirement for communication of that common intention by express statement, but it must at least be the parties' actual intentions, viewed objectively from their words or actions, and must be correspondingly held by each party.
Counsel for Ms Hudson submitted that it was the intention of Mr Fenn, C&W's managing director, that was relevant. This was on the basis that he had authority to bind C&W. Counsel referred to In the matter of the George Hardi Family Trust [2021] NSWSC 1584 at [22], per Sackar J: However, there is a further category of case, to which the present case includes, where there is another party (apart from the trustee), and whom the trustee (initially at least) instructs. In such circumstances, it is the intention of the Trustee (via Hardi) that is relevant (see for example White J in Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488 at [13] and [71] to [73], Martin CJ in Kirkham as Trustee of the Kirkham Family Trust [2010] WASC 106 at [8] to [10] and White J in Colquhoun v Dronpane Pty Ltd & Ors [2011] NSWSC 1500 at [15]).
That case was concerned with a claim for rectification of a trust deed. It is useful to extract the preceding paragraphs of Sackar J's judgment ([18]-[21]): As discussed above, rectification requires an assessment of the subjective (i.e. actual) intention of the party (or parties) to the document, and the person behind the arrangement (i.e. Hardi and possibly Stephen, who would have caused the instructions for the drafting of the Trust Deed to have been provided to any solicitor). In the case of a voluntary settlement, which has been established without any active bargain, the question as to whose intention is relevant as to rectification depends on the circumstances and the substance of the matter. Where the settlor has the active and operative intention as a matter of fact, as to the terms of the trust which is declared, then the question is one of the settlor's intention (see Brightman J in Butlin's Settlement at 262F - 263B and Roper J in Kent v Brown at 128). In other cases, it may be the trustee whose intention is relevant to the terms of the trust (Sheller JA in Carlenka at 344-5).
As I understand it, the parallel that counsel was trying to draw is that although Mr Fenn did not in fact draft the 2022 contract, he provided the instructions and therefore his intention alone is relevant.
Counsel also referred to [87] of my decision in Application of Walker Corporation Pty Ltd [2022] NSWSC 160, by way of comparison. That case was also concerned with a claim for rectification of a trust deed. At [85]-[87], I observed: The question of intention is also complicated where a solicitor is involved. That can happen in two ways. First, the client's intention may have to be filtered through the solicitor's advice as to what is possible. The client may initially wish to achieve a particular result, but there may be legal obstacles to doing so, upon which the solicitor will have to advise. In this way, the solicitor's perception of how the trust deed needs to be worded may become incorporated into the client's ultimate intention. The second possibility is delegation. Counsel for the Trustee accepted that, in principle, where the wording of an agreement is delegated to an agent, then, within the area marked out by the delegation, it is the agent's intention which is relevant, not the principal's. Where a solicitor is acting, delegation is common, especially on clauses that are, or are thought to be, "technical" or "boiler plate". Unless such provisions are the subject of express instructions from the client to the solicitor, it will usually be the solicitor's intention which will be relevant for the purposes of rectification.
Counsel contrasted the present case with one where an agent, such as a solicitor, is delegated the wording of an agreement, to apply their expertise to include a boilerplate provision. Counsel submitted that the evidence showed that the termination and restraint clauses were the subject of bargain between the parties, and that HR had shown a need to obtain authorisation for amendments from Mr Fenn and Ms Foweraker .
Counsel for Ms Hudson went on to submit that there had been an antecedent agreement - the 2021 Terms - and that when Ms Hudson executed the 2022 commission schedule, she and Mr Fenn shared an intention to continue with that agreement, apart from restructuring Ms Hudson's remuneration. Counsel submitted that there was sufficient evidence of Mr Fenn's intention from internal email correspondence. This showed, counsel submitted, that he approved a request for a restructured remuneration package upon a return to work from a flexible working arrangement - and that he intended the agreement to be within the confines of that request.
Counsel further submitted that it was not necessary for the common intention to be formally communicated between the parties or outwardly expressed. It was enough that they objectively held the common intention that only Ms Hudson's base salary would be increased, and that this was inconsistent with what was provided for in the 2022 Document. According, to counsel, the common intention of the parties was clear from the documentary evidence and would be inconsistent with the contract relied on by C&W unless rectified.
Counsel's argument was premised on the proposition that a right to rectification arose when Mr Fenn gave internal approval to the pay rise. I do not accept that premise. While express communication of subjective intention is not necessary, rectification must still arise objectively from the parties' actions and communications. The relevant intention here is that of C&W. It was manifested by HR producing the 2022 contract, with a covering letter that made clear that the contract, in its entirety, would replace the existing contractual arrangements. This included the varied restraint and notice provisions.
In any event, even if Mr Fenn's intention was determinative, it would not suffice. His intention, properly understood, was for a new contract to be prepared and issued by HR. Whether Mr Fenn contemplated that this might later result in further instructions being obtained on other issues does not matter. The important point is that Mr Fenn was only involved in approving an increase to Ms Hudson's base salary. His intention was that the new contract was to include the approved increase but that it was otherwise to be in a form determined, at least in the first instance, by HR.
Ms Foweraker was invited by Ms Hawke of HR to review the contents of the contract before issuing it to Ms Hudson. There was also evidence from Ms Foweraker that she did not intend for the restraint and notice periods to be altered. But I do not think that this matters either. In the first place, I did not understand counsel to rely on Ms Foweraker's evidence for rectification purposes. In any event, I am not satisfied that in fact she gave any thought to the length of those periods. The relevant intention on behalf of C&W on that question was that of Ms Hawke and Ms Kourembaras who propounded those terms. Ms Foweraker did not object and whether, if she had, her objection would have changed C&W's position, does not need to be considered.
Finally, the difficulties in Ms Hudson's case are emphasised by problems with the form of relief sought. First, if the 2022 Document was replaced with the 2021 Terms, this would leave the base salary variation unaddressed in the terms of the rectified contract - the 2021 Terms did not set out base salary, which was only addressed in the 2021 covering letter.
Second, even if the 2021 covering letter were included in the rectified contract, this does not overcome a difficulty arising from the variation in Ms Hudson's hours. There would be, as counsel for C&W pointed out, an evident inconsistency between the 2022 Document (which provided that Ms Hudson would be transitioning to full-time work) and the 2021 Terms (which provided that Ms Hudson would be working 30.4 hours per week, part-time). It is also contrary to the evident subjective intention of the parties, that Ms Hudson would return to work full-time.
Third, the difficulties cannot be solved by confining the form of rectification to the notice and post-employment restraint clauses, as sought in the second form of relief. There is no evidence that the parties agreed or held a shared intention that these particular terms, alone, were to be carried through unchanged between the 2021 contract and 2022 contract.
What these difficulties with the form of relief point up is that HR intended to replace the 2021 contract with a new, restated contract, and Ms Hudson went along with that. There is simply no proof that the parties had some specific common intention with respect to notice and post-employment restraint periods which was different from that stated in the new contract, and rectification is therefore not available.
The same conclusion follows even more clearly if the focus of the analysis is on the 20 September agreement, as I think it should be. That agreement was the product of communications directly between C&W HR and Ms Hudson; neither Mr Molchanoff nor Ms Foweraker was involved. Clearly the parties' common intention was to execute the agreement in that form, picking up the body of the contract issued by HR in August. None of counsel's arguments justify rectification of that agreement.

Misleading conduct

As already mentioned, the hearing was confined to non-damages relief under ss 237 and 243 of the ACL. The relief sought in that regard can be summarised in this way. First, an order that the 2022 Document be declared void so far as it varied the 2021 contract. Second, an order that the terms of the 2022 Document be varied so as to reflect the terms of the 2021 contract, and in particular the termination and restraint clauses in that contract. Third, an order that the termination and restraint clauses in the 2022 Document were not to be enforced.
The pleaded conduct relied on by Ms Hudson was threefold. First, representations made by Mr Molchanoff in conversations with Ms Hudson in April 2021, before Ms Hudson entered the 2021 contract. Second, representations made by Ms Foweraker in conversations with Ms Hudson in August 2022, before Ms Hudson entered the 2022 contract. Third, Mr Molchanoff's silence in 2022, in light of his 2021 representations.

Application of statutory provisions

Counsel for Ms Hudson referred to two operative provisions of the ACL. It appears that both were relied on.
The first was s 18(1) which provides: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
The second was s 31 which provides: A person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to: (a) the availability, nature, terms or conditions of the employment; or (b) any other matter relating to the employment.
For completeness, I note that counsel for Ms Hudson did at times refer to "misrepresentation" including citing references to such in Toll. Nonetheless, I understood Ms Hudson to only be seeking statutory relief under the ACL. As such, liability needed to be established under the ACL.
A preliminary issue is whether s 18 or s 31 have any application. Counsel for C&W made this point concerning s 18 but not s 31. I do not need to decide whether either provision applies - I go on to decide that even if both provisions apply, the present claim must fail.
I do think it is likely that s 18 does not apply. The predecessor provision to s 18 was construed as only extending to "conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character" (Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603). That was held to not include "an internal communication by one employee to another employee in the course of their ordinary activities in and about the construction of a building" (Concrete Constructions at 605; see also Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633 at [229]-[232]). I think that the pleaded representations in the present case are arguably of a similar character. But as I have said, I do not need to decide this point.
There is also authority indicating that s 31 may have no application, even though this was not argued by counsel for C&W. A decision of Kenny J - Walker v Salomon Smith Barney Securities Pty Ltd (2003) 140 IR 433 - referred to by counsel for Ms Hudson on another point, is to this effect. Speaking of the predecessor provision to s 31, her Honour stated (at [187]) (emphasis in original, citations omitted): Section 53B prohibits a corporation from engaging in misleading and deceptive conduct in relation to an offer of employment before a contract of employment has been entered into. The misrepresentation must induce the applicant to take up employment with the respondent. The provision is limited to conduct that took place prior to the commencement of the employment. Hammerschlag J (as his Honour then was) appears to have taken a similar view in TP ICAP Management Services (Australia) Pty Ltd v Howell [2021] NSWSC 656 (at [407]).

Alleged representations by Mr Molchanoff

Ms Hudson pleaded that in 2021, C&W, through Mr Molchanoff, made the following representations: (a) The termination clause and the restraint clause were to remain unchanged by the varied terms to the Employment Contract. (b) The Second Cross Defendant would ensure, for and on behalf of the First Cross Defendant that the termination clause and the restraint clause would remain unchanged in any future variations to any terms of the Employment Contract
Ms Hudson also pleaded that C&W and Mr Molchanoff made representations in 2022: by silence, in circumstances where [Mr Molchanoff] had expressly made 2021 Representations such that there was a reasonable expectation that he would disclose that the "agreement" document included changes to the 2021 Terms, namely the reversions to the forms of the termination clause and restraint clause expressly rejected by [Ms Hudson] in the context of the 2021 Variation
Ms Hudson pleaded that, in reliance on these representations (and those by Ms Foweraker), she "did not read nor execute" the 2022 contract terms. She further pleaded that, as a result, she suffered, or was likely to suffer, loss or damage. That loss or damage was particularised as "loss of salary sign-on bonus and commission" and "consequential losses".
Based on my findings, the 2021 representations are not established. Evidently, the 2022 representations by silence, depended on the 2021 representations being established. My rejection of the evidence on the 2021 representations, is fatal to the 2022 representations as well. Furthermore, I am not satisfied that, had the representations been established, Ms Hudson relied upon them (see [142] above).
In any event, even if Ms Hudson had consciously relied upon Mr Molchanoff's representation, it would have been unreasonable to have do so. That is because any representation by Mr Molchanoff in 2021 could not reasonably be understood as a promise that Ms Hudson's employment terms would never be varied in the future.
The pleaded conduct needs to be viewed in the light of other conduct of C&W. It was clear on the evidence that C&W's corporate practice was to involve Human Resources in the process of preparing contracts. A person in Ms Hudson's position, would have known that Mr Molchanoff did not prepare her contracts, or at the very least, did not have sole responsibility for the preparation of her contracts. It is well known that the terms of an employment contract are liable to change over time, and indeed often must be varied to give effect to regulatory requirements, or changes in the nature of the work to be performed. Therefore, the representations attributed to Mr Molchanoff could only reasonably be understood as representations about the negotiation of the 2021 contract, but not another contract, a year later.

Alleged representations by Ms Foweraker

Ms Hudson pleaded that C&W, through Ms Foweraker (who, it was pleaded, had the same authority and agency as Mr Molchanoff), represented to her that the terms of her 2021 contract were unchanged by the 2022 contract. I have set out the evidence of the conversations relied on above.
Based on my findings, I am not satisfied that the representations were established on the evidence. I was not convinced by the accounts given in Ms Hudson and Ms Foweraker's evidence of conversations as to the 2021 contract terms being unchanged, for the reasons I outlined earlier.

Conclusions

Ms Hudson's misleading conduct claims thus fail on the facts (see Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 97 ALJR 388 at [81]). Furthermore, quite apart from the question of reliance on the alleged representations by Mr Molchanoff, there is a real question of causation. In order to obtain relief under ss 237 or 243 of the ACL, Ms Hudson did not need to establish actual damage. But she did need to establish that she was likely to suffer damage. She did not spell out in her case what would have happened if she had become aware of the amendments to her contractual terms and refused to sign them. Nor was the question addressed in the evidence. In view of the other conclusions I have reached, however, I do not need to pursue this question any further.

Date of termination

Ms Hudson contended that if, as I have found, she was contractually bound by the September 2022 contract, the contract had been terminated in early February. Any operative post-employment restraint would, on that contention, have run from that time.
Although there was some confusion during the hearing as to precisely how this contention was put, I understood it from closing submissions to be based on a repudiation by Ms Hudson, which C&W was said to have accepted.
I understood the parties to agree that Ms Hudson had repudiated the 2022 contract by only giving four weeks' notice in her resignation letter. This was rightly agreed. Brereton J, faced with a similar scenario in Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414, stated (at [24]): A unilateral resignation by an employee, other than in accordance with the terms of the contract of employment is a repudiation.
But repudiation only produces termination of the employment contract if accepted by the innocent party (Tullett Prebon at [24]). That acceptance must be "clear and unequivocal" and communicated to the other party: Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 39.
Counsel for Ms Hudson submitted that C&W had elected to terminate the contract by walking Ms Hudson out. Counsel submitted that this conduct was consistent with clause 11(b) of the contract, which provided: If the Executive's Employment is terminated for any reason: … b. the Executive must return all the Company's property (including property leased by the Company) to the Company on termination including all written or machine readable material, software, computers, credit cards, keys, vehicles and Confidential Information; On this view, the contract came to an end on 2 February and the garden leave direction the following day came too late to be contractually effective.
Counsel also submitted that, even if the contract was not terminated by Ms Hudson being walked out, the garden leave direction was ineffective anyway. Counsel argued that the direction involved an impermissible attempt by C&W to approbate and reprobate. There were inconsistencies in C&W's letter - while directing Ms Hudson to take garden leave, C&W also reminded her of her post-employment restraints and requested the return of all company property in a manner consistent with clause 11(b). Counsel also referred to subsequent emails sent by Ms Hudson in which she rejected the direction to take gardening leave.
In my view, there was no clear and unequivocal election by C&W to terminate on 2 February. The walk-out did not rise to this level. Brereton J rejected a similar argument in Tullett Prebon. In that case, the employee was walked to his car and had his access card taken. Brereton J concluded at [25]: Accordingly, TPAust was entitled to accept Mr Purcell's repudiation and terminate, but it was not bound to do so. The direction that Mr Purcell not thereafter attend the office was not inconsistent with the contract remaining on foot; it was consistent with engagement of the "gardening leave" provision. Although much was made of the withdrawal of Mr Purcell's access card, that too was substantially consistent with the "gardening leave" provision. Even if, in effectively precluding him from access to a parking space as well as the office premises, it went beyond what the "gardening leave" provision authorised - which I do not accept, as use of a car parking space was an incident of attendance at work - it would not follow that it was repudiatory: not every breach is a repudiation, and repudiation is not lightly to be inferred [Azzi v Volvo Car Australia Pty Ltd [2007] NSWSC 319 at [74], and the cases there cited].
As I read clause 11(b), it created an obligation on Ms Hudson to return any of C&W's property that she still had at the date of termination. It was not inconsistent with C&W giving a lawful direction to Ms Hudson to hand over specified property of C&W during the course of the contract. By parity of reasoning with Tullett Prebon, the walk-out did not amount to acceptance of Ms Hudson's repudiation. The contract remained on foot.
That being the case, it was open to C&W to direct Ms Hudson to take garden leave, as it did by its letter dated 3 February. Contrary to the submissions of counsel for Ms Hudson, there was no relevant inconsistency created by C&W reminding Ms Hudson that she would be bound by the post-employment restraints in clause 12 of the contract upon termination. Nor, as with the return of company property during the walk-out, do I think that the further request to return company property generated inconsistency. Ms Hudson's duties were confined by the letter to making herself available to answer any queries C&W might have. She did not need any of the equipment previously supplied by C&W to do that.

Reasonableness of restraints

Having found that Ms Hudson is bound by the restraint and notice provisions in the 2022 contract, I consider C&W's claim for final injunctive relief to enforce restraints in those provisions.
Broadly speaking, C&W sought enforcement of non-solicitation, non-competition, non-poaching and non-interference restraints. C&W sought enforcement of each of these for nine months, or alternatively, six or three months.
Initially, C&W sought orders enforcing these restraints mirroring the terms of the relevant clause in the 2022 contract. That clause provided: 12. RESTRAINT ON THE EXECUTIVE'S CONDUCT 12.1 The Executive must not, without the prior written consent of the Company (on the Executive's own account or for and on behalf of any person or entity) for the Restraint Period: a. participate in, carry on, assist or otherwise be directly or indirectly concerned with, as a director, consultant, adviser, contractor, principal, agent, manager, employee or partner, any business or activity that directly competes in the Restraint Area with any part of the business of the Group with which the Executive was involved at any time during the Relevant Time; b. solicit or encourage any director, contractor or employee of the Group with whom the Executive has worked or had dealings at any time during the Relevant Time to leave their employment or engagement with the Group; c. solicit, canvass, approach or accept any approach from any person or entity who was at any time during the Relevant Time, a customer, supplier, distributor or licensee of or to the Group with whom the Executive has worked or had dealings with a view to establishing a relationship with or obtaining the custom of that person or entity in a business which is the same as or substantially similar to that part of the Group's business in which the Executive was involved at any time during the Relevant Time; d. interfere or seek to interfere, directly or indirectly, with the relationship between any member of the Group and its customers, suppliers, distributors, licensees, directors, employees, contractors or agents in the conduct of the Group's business; 12.2 Restraint Area means: a. Australia; b. New South Wales Restraint Period means: a. 12 months; b. 9 months; c. 6 months; d. 3 months. 12.3 Relevant Time means the period of 12 months prior to either: a. the date of termination of the Employment; or b. the date from which a direction under clause 10.2(b) applies, whichever is earlier. 12.4 Clauses 12.1(a), 12.1(b), 12.1(c) and 12.1(d) each have effect as if they consist of separate provisions, each resulting from combining each geographic area in the definition of Restraint Area with each time period in the definition of Restraint Period. If any of those separate provisions is invalid or otherwise unenforceable for any reason, the invalidity or unenforceability shall not affect the validity or enforceability of any of the other separate provisions or other combinations of those separate provisions of 12.1(a), 12.1(b), 12.1(c) and 12.1(d). 12.5 Each restriction in clause 12.1 is intended to be separate and severable. If any of these are found to be invalid but would be valid if some part was deleted then such parts shall apply with such modifications as maybe necessary to make them valid. 12.6 The Executive acknowledges that each restriction specified in clause 12.1 is in the circumstances reasonable and necessary to protect the Company and the Group's legitimate interests and that damages are not an adequate remedy for any breach of the restrictions by the Executive.
During the hearing, C&W narrowed the orders sought to the following: Garden Leave ... 2. A final injunction restraining the Defendant, until 3 May 2023, from: a. participating in, carrying on, assisting or otherwise being directly or indirectly concerned with, as a director, consultant, adviser, contractor, principal, agent, manager, employee or partner, any business or activity that provides commercial office leasing services, anywhere in New South Wales or Australia; and b. contacting any customers or clients of the Plaintiff or its related bodies corporate, as that term is defined in the Corporations Act 2001 (Cth). Post-employment Restraint 3. A final injunction restraining the Defendant for the Restraint Period from: a. participating in, carrying on, assisting or otherwise being directly or indirectly concerned with, as a director, consultant, adviser, contractor, principal, agent, manager, employee or partner, with Jones Lang LaSalle (NSW) Pty Limited or any of its related entities in the Restraint Area; b. soliciting or encouraging any director, contractor or employee of the Group with whom the Defendant has worked or had dealings at any time during the Relevant Time to leave their employment or engagement with the Group; c. soliciting, canvassing, approaching or accepting any approach from any person or entity who was at any time during the Relevant Time, a customer or supplier of or to the Group with whom the Defendant has worked or had dealings with a view to establishing a relationship with or obtaining the custom of that person or entity in a business in any way relating to the provision of commercial office leasing services; and/or d. interfering or seeking to interfere, directly or indirectly, with the relationship between any member of the Group and its customers, suppliers, directors, employees, or contractors in the conduct of the Group's provision of commercial office leasing services with whom the Defendant has worked or had dealings at any time during the Relevant Time, where the capitalised words in this order are defined as follows: e. Restraint Area means Australia and New South Wales; f. Restraint Period means 9, 6, and 3 months from the Termination Date; g. Relevant Time means the period from 6 February 2022 to 6 February 2023; h. Termination Date means 3 May 2023; and i. Group means the Plaintiff and its related bodies corporate, as that term is defined in the Corporations Act 2001 (Cth).
I can immediately put aside the claims for injunctions against soliciting C&W's employees and interfering with its business. There is insufficient evidence of a threat that these restraints will be breached to justify the grant of injunctive relief. Their reasonableness therefore does not need to be considered for the purposes of this judgment.
This leaves the restraints against solicitation of customers and against being engaged in a competing business. I did not understand the relevant principles to be in dispute. They are summarised in Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343 at [58]-[68]. Counsel referred to other authorities, but I did not understand them to be inconsistent with the summary in Isaac. In particular, reasonableness is to be assessed as at the time the restraint was created.

Protectable interest

A preliminary issue in considering the reasonableness of the restraints is whether C&W had a legitimate protectable interest (see Tullett Prebon at [47], quoted in Isaac at [64]). C&W contended that it had two legitimate protectable interests: customer connection and confidential information.
Counsel for Ms Hudson appeared to concede that C&W had a legitimate interest in customer connection. I think that concession was correct.
Customer relationships were key to Ms Hudson's role, and they were developed at C&W's expense. This included building and maintaining relationships with the landlords of buildings on which C&W was appointed. It also included building and maintaining relationships with landlords and tenants, more broadly. It can be inferred that these relationships with landlords were important in increasing the likelihood of obtaining future appointments, while relationships with tenants (and in particular, the agencies representing them) assisted with filling vacancies, that generated revenue, and in turn strengthened the prospect of maintaining current appointments and obtaining new ones.
There was some evidence of Ms Hudson continuing to deal with people with whom she had dealt before starting at C&W. But there do not seem to have been many of them, and, in any event, the maintenance and development of those relationships was at C&W's expense (compare Koops Martin Financial Services Pty Limited v Reeves [2006] NSWSC 449 at [48] and Dundoen at [64]-[65]). Given the centrality of customer relationships to Ms Hudson's role, C&W was entitled to protection against Ms Hudson's use of "personal knowledge and influence" over existing or potential customers (see Jardin v Metcash Ltd [2011] NSWCA 409 at [97], and the authorities there cited).
Counsel for Ms Hudson submitted that such interest as C&W had in protecting its confidential information was at best a limited one and did not justify the restraints sought. In my view, it is not necessary to consider that question. There was no evidence that Ms Hudson had retained any specific confidential information which would be of use to her in soliciting customers or being engaged in a competing business. In the circumstances of the case, I do not think that any interest C&W had in protecting its confidential information went beyond its interest in protecting customer connections.

Duration and scope of restraints

I turn to consider the second aspect of the inquiry as identified by Brereton J in Tullett Prebon (at [47]) - whether the restraints were no more than reasonable to protect the legitimate interests of C&W. The main question debated by counsel was the duration of the restraints sought. But in framing the orders I also had to consider their scope.
Counsel for C&W submitted that in assessing the reasonableness of the duration of each restraint, regard should be had to the method of Angel J in Extraman (NT) Pty Ltd v Blenkinship (2008) 23 NTLR 77 at [69]-[81]. Counsel emphasised the observation (at [81]) that assessing reasonableness is a judgment which does not call for reasons that need to be greatly elaborated. Counsel submitted that similar notions were expressed by Allsop P in Hanna v OAMPS Insurance Brokers Ltd (2010) 202 IR 420 at [43]-[45].
Counsel emphasised a further feature of the Court of Appeal's judgment in Hanna. This was the rejection of an argument by the appellant in that case (at [43]), that the primary judge had erred by failing to adopt a particular test - "the time taken to sever the covenantor's connection with the customers or clients in question rather than the time for the covenantee to build up (or rebuild) a connection" - which had been applied in other decisions. Counsel quoted Allsop P, who stated: There is no legally required test in these circumstances. The use of one test or another depends on the facts and the evaluation of the approach that is reasonable.
Counsel also noted a particular finding at first instance in Hanna (OAMPS Insurance Brokers v Hanna [2010] NSWSC 781) which the Court of Appeal found "difficult to criticise" (at [46]). This was Hammerschlag J's finding (at [93]) that: At a minimum therefore, protection for 12 months is reasonable. This is the minimum necessary to give OAMPS one opportunity to cement its connection or for the defendant's connection to be severed across the portfolio.
I extract, for reference, the comments of the Court of Appeal (Allsop P, with whom Hodgson JA and Handley AJA agreed) at [46]: Once one accepts, as on the evidence the primary judge was entitled to do, that renewal was a critical time for each client, the use of the 12 months is difficult to criticise.
Counsel also referred to the decision of Sackar J in Dundoen. Counsel submitted that it was factually similar to the present case. The issue referred to by counsel was whether a restraint period of eighteen months was reasonable for a real estate agent responsible for the plaintiff's rent-roll. Counsel quoted [154] of Sackar J's judgment, where his Honour stated: In my view the non-solicitation, no-dealing, non-competition and non-encouragement restraints are justified on the basis that the strength of the connections between the defendant and the landlord clients are such that some clients may follow her even without her solicitation or encouragement. This was obviously contemplated by the parties at the time the new agreement was brought into effect, the concern being that "owners may follow her". Further, the non-compete restraint has been limited to prevent the defendant being employed at Wills Property or its related entities or by the defendant's relatives only. The landlords' potential attraction to the "Wills" brand increases the risk for the plaintiff and is something Wills Property could be encouraged to exploit. In my view the four restraints support the effectiveness of one another and "remove the difficulty of proof of actual solicitation" (Koops Martin v Reeves at [83]; see also Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267 at [34]). I also take into account that a management agreement routinely can be terminated on 30 days' notice.
Garden leave period: In Tullett Prebon, Brereton J, following a review of authority, concluded that a restraint operating during a period of garden leave was capable of amounting to an invalid restraint of trade (see at [65]). This conclusion was accepted by C&W and was thus common ground in the present case. Through her counsel, Ms Hudson conceded that, if she was bound by a three-month notice provision (as I have found), then a restraint of up to ten weeks was reasonable. Only the final three weeks of her garden leave were therefore in issue.
The Court of Appeal recently considered the reasonableness of a garden leave provision in McMurchy v Employsure Pty Ltd [2022] NSWCA 201. The relevant employee held a senior sales management position in a business which provided "human resources and workplace health and safety consultancy services throughout Australia and New Zealand" (at [6], [11]-[12]). The relevant garden leave provision was three months. The Court of Appeal made the following observations (at [45]) in upholding the reasonableness of the provision (albeit based on confidential information): It is not to the point, as the appellants submit, that the 2018 contract did not oblige Employsure to provide any work to Mr McMurchy during the three-month period of notice. Mr McMurchy could not properly perform his duties to Employsure, including as directed under cl 19.3, if he took up work with ELMO while on "gardening leave" since he was required by the 2018 contract to be available to respond to queries or problems and perform duties as requested by Employsure, whilst being paid his salary by Employsure. The pretermination restraints in cll 5.1 and 18.2 read with cl 19.3, were not directed to a sterilisation of Mr McMurchy's capacity. As Employsure correctly submitted, the restraints were directed at the absorption of Mr McMurchy's capacity by securing the proper performance of his duties, including in respect of use of confidential information.
That passage indicates that garden leave is capable of being characterised as ensuring the absorption of capacity. Further, it shows that it is not to the point that C&W does not appear to have in fact provided any work to Ms Hudson over that period.
I asked counsel whether Ms Hudson had continued to be paid. I was informed that this was the case, and that since Richmond J's judgment this was occurring pursuant to an undertaking offered by counsel for C&W in the interlocutory application. That undertaking was that C&W would: continue to pay the Defendant her salary and commission entitlements under her contract of employment during her period of gardening leave, free from deduction or withholding on account of any monies said to be owing by the Defendant to the Plaintiff in respect of the retention payment claw back referred to in the Plaintiff's letter dated 3 February 2023, or otherwise.
I asked counsel for Ms Hudson whether her client would voluntarily repay the amounts received if her application was unsuccessful. The following exchange occurred: HIS HONOUR: If the application fails, is she claiming the money back again - sorry is she volunteering to return the money? NOLAN: If the application fails, is she volunteering to return the money that she was paid? HIS HONOUR: No, that she's being paid now for - let's suppose you're successful in saying that - as I understand this to be your formal position, your formal position is that only two and a half months of garden leave was reasonable. NOLAN: As I apprehend your Honour's question, there are several strands to how it could be approached. If your Honour were to find that she was - the one argument I make is that there was an election to terminate, therefore there's only one month. If your Honour was to find that on the basis of the 2021 terms, then yes, she must necessarily pay that money back, because it's money that she has been paid by reason of the status quo, and she's not entitled to it otherwise. It would definitely feature as part of her damages claim though, because then it would be [incumbent on] me to demonstrate that despite that money, she has lost opportunities elsewhere and it may be that that money is sufficient. So at the moment, she doesn't lay claim to that money in its form, but it would still be a necessary incident of any assessment of damages.
Later in oral argument, counsel for Ms Hudson addressed the matter further: Likewise, she goes on to say in a subsequent email in no uncertain terms, Court book 3, page 190, to clarify further to my 7 February email which I extract at page 8 of my submissions, "I did not agree to a notice period of three months, and I'm not bound by it. Accordingly, I will not be on garden leave for an additional two months, and I'm not expecting to be paid for that period". That answers your Honour's question with respect to will the money be paid back, yes. But the reason why I made the point that I made this morning is the undertaking is to damages if that gives my client a different right. There's a different right that subsists in that undertaking and we can make a forensic choice as to whether or not we will sue on that undertaking.
The email referred to is that of 20 February (see above). I extract, for convenience, the relevant part: To clarify, and further to my email of 7 February 2023 below, I did not agree to a notice period of three months and am not bound by it. Accordingly, I will not be on garden leave for an additional two months, and I am not expecting to be paid for that period. I will be repaying the claw-back as per my contract.
In my view, in determining the reasonableness of a garden leave provision, a significant consideration is that an employee could decide to decline their salary and work somewhere else (beyond the confines of the restraint). It does not, however, appear to me that Ms Hudson has done so here. In her 20 February email, she communicated that she did not expect to be paid for more than one month after her resignation. But that was based on her understanding that she had a notice period of one month and not three months (as C&W contended). To the extent that counsel for Ms Hudson indicated that Ms Hudson would repay the money paid to her during her garden leave, I think that too was bound up with a conclusion that Ms Hudson was only subject to a one-month notice period. In fact, it seems that Ms Hudson accepted the payment of her salary from C&W right up until the date of the trial.
One of the points made by Brereton J in Tullett Prebon, and which informed his Honour's conclusion that the restraint of trade doctrine could apply during a period of garden leave, was that there is a distinction between the termination of the employment relationship and the formal termination of the contract of employment. If an employee wrongfully resigns and ceases to work, the employment relationship comes to an end even if the employer does not accept the repudiation, and the contract of employment remains on foot (at [24]). Furthermore, an employer cannot usually obtain an injunction by offering to pay the employee's wages or salary for the period of the injunction if the employment relationship has in fact ended. This is I think bound up with the idea that wages or salary are payable for services actually rendered by the employee (see at [30]).
As already mentioned, Brereton J's conclusion was not questioned. But there may be room to argue about the termination of the employment relationship in the present case. Where an employer wrongfully repudiates the contract, the relationship ends, and the employee cannot sue for wages or salary on the ground that he or she is ready, willing and able to do the work. By parity of reasoning, if an employee wrongfully repudiates and takes on another job, the employment relationship has ended even if the employer would be willing to pay the employee's wages or salary. But I am not sure that the employment relationship is terminated when an employee placed on garden leave stays at home and continues to accept payment.
It is, however, unnecessary to consider that point further in this judgment. As I explain below, I concluded that the extension of restraints on solicitation of customers and on involvement in a competing business into the post-termination period (limited in scope, as I explain below) were justified. The same reasoning applies a fortiori to the disputed final three weeks of the garden leave period.
Post-termination period: Counsel for C&W summarised their submissions on reasonableness as comprising three key points.
First, counsel relied on evidence of the difficulty of finding an adequate replacement, and having that replacement develop a relationship with the clients formerly represented by Ms Hudson of comparable depth. This relied on the evidence of Mr Molchanoff, that this could take up to twelve months, or even longer.
Second, counsel relied on the prejudice which C&W would incur if Ms Hudson utilised her built up customer connection or C&W's confidential information. Counsel submitted that there would be particular prejudice to any open or ongoing tenders by C&W, and that Ms Hudson would otherwise be allowed to leverage connections to take business away from C&W to benefit JLL.
Third, counsel relied on the restraint provisions forming part of a contract concluded after an arms' length commercial negotiation, citing Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at 316-317 and Idameneo (No 123) Pty Ltd v Angel-Honnibal [2002] NSWSC 1214 at [51].
I have mentioned that counsel for Ms Hudson only conceded the reasonableness of a ten-week restraint period. Counsel justified this as a pro-rata increase in Ms Hudson's prior one-month restraint, referable to the additional time she would be spending establishing or maintaining customer connections upon her return to full-time work. Counsel submitted that a restraint beyond that time went beyond what was reasonable for the following reasons.
First, the absence of evidence of customers following Ms Foweraker or Mr King to JLL. Counsel submitted that they would have had stronger customer connections, such that customers may have followed them unsolicited, and referred to the fact that Ms Foweraker had no post-employment restraint, and Mr King's was for one month. Counsel noted that 11 weeks had passed since Ms Foweraker joined JLL, and 7 weeks had passed since Mr King had joined. Further, counsel referred to evidence of co-appointment in representation and cross-pollination in that representation having always been a feature of the industry.
Second, counsel submitted that Ms Hudson's customer connection was affected by her status as a more junior employee, and the interruptions caused by substantial periods of maternity leave, COVID lockdowns and part-time work.
Third, counsel referred to Ms Hudson's position under the 2021 contract, and the circumstances in which she negotiated the 2022 contract, to demonstrate that the increased restraint went beyond what was reasonable. Counsel emphasised that there was no change to Ms Hudson's position, that she remained subject to the retention payment terms, that she was under the same supervisors, that the increase in her base salary was explained by the cost of childcare, and the transition was simply from part-time to full-time work.
Both parties paid lip service to the principle that reasonableness is to be determined as at the date the relevant contract is made, and accordingly evidence of subsequent events is irrelevant to reasonableness, although it may be relevant to the discretionary refusal of relief. But the witness evidence and submissions presented tended to blur this distinction. Of course, less than a year elapsed between the making of the 2022 contract and the date of the hearing, and it seems that there was no relevant change in market conditions, or the nature of C&W's business, over that period. Whatever the explanation for the parties' approach may have been, I have proceeded on that general assumption.
I begin with the non-solicitation restraint. The evidence showed (and I do not think it was really disputed) that customer connections were central to Ms Hudson's role. This was so, notwithstanding the fact that Ms Hudson often did not have the sole connection with customers. The non-solicitation restraint directly protected C&W's interest in those connections. It was also directed to the relationships that would have been at their strongest when Ms Hudson was to leave - those with customers of C&W with whom Ms Hudson had worked or had dealings in the prior twelve months.
A substantial amount of the evidence on customer connection was concerned with Ms Hudson's appointments immediately prior to her resignation, which she also held at the time she entered the 2022 contract. There was evidence that other C&W employees had been involved on those appointments, including during Ms Hudson's periods of parental leave. I accept that this would make it easier for C&W to re-build relationships.
As appears from the summary above, there was not a great deal of objective evidence as to how long it would take C&W to hire a replacement for Ms Hudson and introduce that replacement to the customers with whom Ms Hudson had had contact. But I do not think that this is the only question. C&W's protectable interest, in the case of a customer-facing role, also extends to severing the personal connection built up by the employee, at C&W's expense, with customers or potential customers. Of its nature, this is unlikely to be capable of being precisely quantified by evidence. It must involve a substantial degree of common sense and judgment (a point made by the authorities referred to earlier).
I also think that caution must be applied in referring to the restraint periods in Ms Foweraker's and Mr King's employment contracts. It needs to be borne in mind that when the 2022 contract was made, the parties did not know that Ms Foweraker and Mr King would leave for JLL at the same time as Ms Hudson. Furthermore, there might be many reasons, including mistake or inadvertence, for those periods. The Court should not allow an issue as to the reasonableness of the restraints in Ms Hudson's employment contract, entered into on a specific date, to turn into a general inquiry into the terms on which, at other times, other employees' employment contracts were entered into, and why. That is not to deny that evidence of an "industry standard" may be relevant in determining the reasonableness of restraint terms (see, for example, Koops Martin at [56]). But there was no evidence of that kind in the present case.
The 2022 contract did contain a formal acknowledgement that the restraint periods in that contract were reasonable, but counsel submitted that Ms Hudson was unaware of those restraint periods at the time. However, there can be no doubt that Ms Hudson freely and knowingly agreed to a six-month post-termination non-solicitation restraint in her contract with JLL (see also Tullett Prebon at [53]).
Strictly speaking, this was evidence post-dating the 2022 contract. But this point was not taken by counsel for Ms Hudson. Perhaps this was because negotiations with JLL had already commenced by the time the 2022 contract was entered into. On any view, it tends to call into question the claim that Ms Hudson would not have agreed to the restraint periods in the 2022 contract if she had been conscious of them, and that as a result the acknowledgement in that contract is to be discounted.
Ms Hudson was, on her own account, writing more than $800,000 per year in business, including having written $2.4 million in 2021. She was earning (when commission was taken into account) hundreds of thousands of dollars a year. I do not think it is realistic to characterise her as a junior employee, if that is meant to suggest that her customer connections were of little value to C&W.
In the circumstances of the case, I concluded that a post-termination non-solicitation period was reasonable, but not for the whole period sought by C&W. In the exercise of my judgment, I fixed the period at six months. Furthermore, C&W sought a restraint which would extend to suppliers, in accordance with the terms of the restraint. But there was no evidence that Ms Hudson had any role in dealing with suppliers of goods and services to C&W's business, let alone that she could have been expected to develop some sort of supplier connection. I therefore limited the injunction to solicitation of C&W customers (see below).
I now turn to the competition restraint. Again, this had to be justified in terms of protecting C&W's interests in its customer connections. The case for a non-competition restraint was weaker, particularly where non-solicitation restraints would also be in force. Nevertheless, it is accepted that a general competition restraint may be justified, especially for a customer-facing employee. The comments by Brereton J in Koops Martin (at [44]) are in point (my emphasis, citations omitted): A more robust view is taken where the employee's role includes obtaining and extending custom for the employer's business. When an employee's duty includes to build up the employer's clientele as well as to deal with existing clients, a wide restraint is more likely to be upheld, because in such circumstances the employer is entitled to protection against the employee taking advantage of the period of service to prepare for later competition. In such a case, the establishment of a customer connection is not merely incidental to the employment, but its purpose. In that context, a covenant is considered reasonable, first, to remove the temptation that by cultivation of the target market during employment, the employee may prepare the ground for its exploitation by himself after the employment ends, rather than for his employer during the employment; and, secondly, to prevent exploitation after termination of the employment by the employee of a connection with the customer which the employer has paid the employee to establish for the employer's benefit.
It must again be emphasised that the question is not whether Ms Hudson in fact engaged in unfair competition of the type mentioned by his Honour, but whether it was reasonable for C&W to take a non-competition covenant to protect itself against the risk of her doing so. I considered that, in the circumstances of the case, a post-termination restraint was reasonable, but for a lesser period than the non-solicitation restraint. In the exercise of my judgment, I fixed the period at three months.
Again, I also limited the scope of the injunction. C&W had sought an injunction applying to any involvement with JLL. I limited the injunction to performing leasing agency services work relating to commercial property in the Sydney CBD. This was designed to enable Ms Hudson to work with JLL (or any other commercial leasing agency service firm) in other markets, or on tasks which did not involve the provision of commercial leasing agency services (for example, a purely administrative role).
The scope of the garden leave injunctions was similarly limited, except that they applied to leasing services relating to commercial property in New South Wales rather than commercial property in the Sydney CBD. I considered that a more extensive restriction was justified in the garden leave period.

Refusal of injunctive relief

Counsel for Ms Hudson also contended that there were several discretionary reasons why the Court should not exercise its discretion to enforce any restraints beyond the conceded ten-week period. Counsel for C&W took the preliminary point that no discretionary matters had been pleaded. Counsel agitated this issue on the first day of the hearing, when counsel for Ms Hudson indicated that discretionary matters were relied on. Counsel maintained this position in closing submissions, noting that no amendment had been made to the pleadings, despite the issue being raised at the start of the hearing. Counsel for Ms Hudson responded that it was not necessary to plead such matters reasons, as they are submissions to be advanced in the context of the Court tailoring its relief.
Before dealing with the specific points made by the parties, it is necessary to say something about the grounds upon which injunctive relief may be refused in restraint of trade cases. There are differences, or potential differences, of doctrine between the grounds, including as to the party which bears the onus.
The starting point is that we are talking about refusal of equitable relief. If a restraint is unreasonable, then it is void and unenforceable at law. Equity follows the law and hence such a restraint cannot be enforced in equity. The present discussion concerns cases where the restraint is valid at law, but equitable relief may be refused, leaving plaintiffs entitled to pursue their rights at law, including damages. I think such cases fall into at least three different classes.
The first class covers cases where the plaintiff fails to establish the elements which apply to the grant of injunctive relief generally. Because this is part of the plaintiff's case, the onus lies on the plaintiff. An example is the requirement that the plaintiff establish that there is a real risk of conduct by the defendant which would breach the restraint. My refusal of C&W's claim for injunctions against interfering with its business or soliciting its staff in the present case is an instance. Another example is the requirement that damages be an inadequate remedy, discussed below.
The second class covers recognised equitable defences, such as unclean hands, hardship and laches. These are defences which are generally available wherever equitable relief is sought (although their application may differ between different types of case). As with all affirmative defences, the onus of establishing them lies on the defendant.
The third class of case is different again. It has frequently been said that while the reasonableness of a restraint depends on the circumstances at the time it was granted, the court may look to the circumstances as at the date of the trial in deciding whether to refuse relief: Isaac at [63]. The assumption is that the court has a discretion to refuse injunctive relief where events which have occurred since the restraint was granted would make its enforcement unreasonable.
A clear case calling for the application of this principle is where a plaintiff who at the time of obtaining a restraint had a legitimate interest in enforcing that restraint has lost that interest (for instance, in the case of a vendor restraint accompanying the purchase of the business, where the purchaser has sold the business by the time enforcement was sought). But the boundaries of the principle have not been mapped out. Clearly it is distinct from hardship. It only seems to have been recognised in restraint of trade cases. Presumably, it applies only to injunctive relief, meaning that the restraint, which ex hypothesi satisfies the common law test of validity, can still be enforced by way of action for damages.
It is unnecessary to explore these potential issues further in the present case. The principle has been recognised at Court of Appeal level. Neither party challenged its existence nor debated its scope beyond appeals to "reasonableness". I will proceed in the same way.
Counsel for Ms Hudson, in written submissions, identified nine separate discretionary reasons for refusing relief. There was some overlap, and I thought some of the grounds were not relevant or were really matters going to reasonableness. I have distilled the remaining points as best I can and deal with them under the classes I have just identified.
First Class: Counsel for Ms Hudson put in issue whether damages were an adequate remedy. Usually, it is necessary before equitable relief can be granted that relief at law (damages) would not be an adequate remedy. There is however a debate about whether, as a matter of principle, this requirement applies when the plaintiff seeks an injunction to restrain the breach of a negative covenant: see Meagher, Gummow & Lehane's Equity Doctrines & Remedies Heydon JD, Leeming MJ and Turner PG, (5th ed, 2015, LexisNexis Butterworths) at [21-195].
It is unnecessary to consider the question in any detail for the purposes of this judgment. It was discussed by Brereton J in Otis Elevator Company Pty Ltd v Nolan [2007] NSWSC 593, which counsel for Ms Hudson referred to. It seems then that the relevant principles are not in dispute. Otis was a restraint of trade case. At [17] Brereton J observed: The remaining and crucial question, therefore, pertains to the Court's discretion to grant or withhold injunctive relief. All equitable relief is discretionary. That is so even of an injunction to restrain a breach of a negative contractual stipulation, although discretion to decline relief is rarely exercised in that context. Nonetheless … that discretion exists, and the grant of an injunction on a final basis, even in such a case, remains ultimately discretionary.
Orally, counsel for Ms Hudson advanced this matter by reference to the $175,000 retention payment, which Ms Hudson was willing to repay, and sought to characterise it as a form of liquidated damages. I agree that the retention payment offered a degree of protection against the prospect of Ms Hudson leaving, at least during the time where she would need to make a re-payment.
I do not think that means that damages are an appropriate remedy in this case. I think that the reasons of Brereton J in Tullett Prebon at [98]-[103] are consistent with this. His Honour considered that even a liquidated damages clause in a contract, although it would arguably mitigate the difficulty of calculating damages, did "not make it any more just … to escape from … contractual obligations at the price of paying damages". This was because "[e]quity holds parties to their agreements, rather than allowing them to escape from them at the price of damages" (at [102]). That reasoning is all the more apposite in the present case where the contract contained an express acknowledgement that "damages are not an adequate remedy for any breach of the restrictions".
Second Class: Counsel for Ms Hudson advanced three recognisable equitable defences: delay (laches), unclean hands and hardship. As I have explained, the onus of establishing such defences rests with the defendant. In my view, that means the defendant must plead them. Insisting on that avoids prejudice to the plaintiff, in circumstances where the pleading may point to some fact that does not necessary arise out of the plaintiff's case in chief.
In circumstances where none of these defences were pleaded, and the plaintiff objected to this course, I do not propose to entertain these defences. But I was not persuaded by any of these defences on their merits either.
On delay, counsel for Ms Hudson submitted that C&W was slow to approach the Court for interlocutory relief, having done so on 7 March. In the circumstances, however, that delay was not disqualifying. Ms Hudson remained in correspondence with C&W HR until 22 February. In evidence was correspondence from C&W's solicitors to Ms Hudson dated 27 February. I do not think it was unreasonable to delay the commencement of litigation until after the negotiations ran out. The proceedings were commenced less than two weeks later. Richmond J thought that there was not "any material delay" (J1 at [38]), and I see no reason to take a different view, especially at this stage of the proceedings.
Counsel for Ms Hudson's submissions based on unclean hands relied on non-compliance with the award or the Fair Work Act. As I have found that there was no such non-compliance, the argument fails.
Counsel's submissions based on hardship do not alter the position either. First, there was no evidence in the present case that JLL was in fact going to withdraw Ms Hudson's offer of employment, including requiring re-payment of the $1.3 million lump-sum. Such evidence ought to have been adduced, given that Ms Hudson bore the onus of proving hardship. Second, I took care in formulating the injunctions to allow Ms Hudson to work for JLL in the post-employment period, so long as she did not do so in a way involving solicitation or direct competition by her in the market, as specified. Third, I agree with counsel for C&W that any hardship was self-inflicted, as Ms Hudson voluntarily accepted the offer from JLL and persisted, despite being aware that C&W was contending that the August 2022 contract, with its extended restraint periods, applied.
Third Class: Counsel for Ms Hudson also raised matters invoking circumstances as at the date of hearing, and appeared to suggest that these would render enforcement of the restraints unreasonable. Counsel emphasised the absence of evidence of hardship having flowed to C&W from the departure of Ms Foweraker and Mr King - more senior employees who left at the same time to JLL - despite the proceedings having been commenced five weeks after their departure. Counsel submitted that there was economic downturn, that Mr Molchanoff had referred to that, and submitted that C&W did not expect to be writing the same business.
My inclination is that matters of this kind should be pleaded as well. Nonetheless, I was not persuaded by them on the merits.
In my view, it is not to the point that there may, at the moment, be a lack of evidence of hardship or damage to C&W. The purpose of injunctive relief is to protect against the risk of harm. C&W's interest in protecting its customer connections remained as valid at the date of the hearing as it was when the 2022 contract was entered into. I also think that the terms of Ms Hudson's agreement with JLL may legitimately be taken into account on this point.

Conclusions and orders

I announced the following conclusions on 28 April 2023. 1. Three months' notice period and (and associated gardening leave provisions) and the twelve-month post-employment restraint period were validly incorporated into Ms Hudson's employment contract by September 2022 at the latest; 2. Ms Hudson's claim for rectification of the contract in that form fails; 3. So too does Ms Hudson's claim for relief under s 237 of the Australian Consumer Law; 4. So too does Ms Hudson's contention that the contract was terminated by C&W before the expiry of the gardening leave period; 5. The restraint imposed on Ms Hudson for the period of her gardening leave (that is, up until the expiry of the employment contract on 3 May 2023) are valid and enforceable to the extent that they prevent Ms Hudson from dealing with clients and customers of C&W [with whom she had contact] and being employed in any business competing with C&W within the Sydney CBD commercial leasing agency market, and the post-employment restraints are enforceable in the case of the non-solicitation restraint, for a period of six months from the termination of Ms Hudson's employment contract (i.e to 3 November 2023) and in the case of the competition restraint for a period of three months from the expiry of Ms Hudson's employment contract (i.e, 3 August 2023); 6. There is no sufficient reason to refuse injunctive relief to that extent.
The orders made on 28 April 2023 were: 1. Order that the Defendant be restrained, for the period until 3 May 2023, from: 1. having any dealings with any customers or clients of the Plaintiff or of any of its related bodies corporate, as that term is defined in the Corporations Act 2001 (Cth), concerning the leasing or proposed leasing of any commercial property in New South Wales; and 2. performing (whether as employee, agent, contractor, director or otherwise) any leasing agency services work relating to commercial property in New South Wales, otherwise than for the Plaintiff or any of its related bodies corporate. 1. Order that the Defendant be restrained, for the period from 3 May 2023 until 3 November 2023, from soliciting, canvassing, approaching or accepting any approach from any person or entity who was at any time during the period from 6 February 2022 to 6 February 2023, a customer of the Plaintiff or any of its related bodies corporate with whom the Defendant worked or had dealings, with a view to establishing a relationship with or obtaining the custom of that person or entity in a business in any way relating to the provision of commercial office leasing agency services. 2. Order that the Defendant be restrained, for the period from 3 May 2023 until 3 August 2023, from performing (whether as employee, agent, contractor, director or otherwise) any leasing agency services work relating to commercial property in the Sydney Central Business District, otherwise than for the Plaintiff or any of its related bodies corporate. 3. Otherwise discharge order 5 made by the Court on 7 March 2023. 4. Reserve costs. 5. Order the operation of Orders 1 to 5 be stayed until 6pm on Monday 1 May 2023. 6. Adjourn the proceedings for further directions to 4pm on Monday 1 May 2023.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 July 2023

Australian Consumer Law (Competition and Consumer Act 2010(Cth)

At a glance

Court

Decision date

Before

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Judgment (27 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (33)