This passage has been frequently cited, including by the High Court: see, for example, Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241, at 256 [43], 259 [54], per Gummow, Hayne and Heydon JJ; Jones v Department of Energy and Minerals [1995] IRCA 292; 60 IR 304, at 308, per Ryan J.
69 The May 2000 Letter used the expression "in the event of a redundancy". The background to the insertion of this expression in the letter was the concern stated by the respondent to Mr Neilson arising out of the 35 redundancies that had taken place in May 2000. The respondent conveyed his concerns about his own position, particularly if the appellant intended to abolish further positions.
70 In these circumstances, I would not be inclined to give the expression a narrow meaning. I would not be disposed, for example, to confine an event of redundancy to the case where the respondent's employment was terminated because of a restructuring that affected a number of positions in the appellant's organisation. On this approach, there might well be an event of redundancy if the respondent's employment was terminated solely because the appellant (or EBUSA) wished to redefine the role and responsibilities of the Managing Director and the respondent was thought not to have the necessary qualifications or skills for the restructured position: cf Jones v Department of Energy, at 308.
71 On no view, however, is the expression, as used in the May 2000 Letter, broad enough to include termination for any reason other than misconduct (as the respondent argued). To terminate an employee's contract because of perceived poor performance does not imply that the employer has more staff than is necessary, nor that the organisational structure is to be rearranged. The position occupied by the employee remains, but the employer does not wish the incumbent to stay in the job.
72 Nor do I think that there was an "event of redundancy" simply because termination of the respondent's employment was followed by a reallocation of some of the responsibilities of the Managing Director. On the evidence, Ms Mansoor decided to terminate the respondent's employment solely because of dissatisfaction with his performance and not because of any intention to restructure management in Australia or to reallocate the duties of the Managing Director. It was in consequence of the termination decision that Ms Mansoor decided to assign Mr Feng to some of the duties previously performed by the respondent.
73 The redundancy provisions of the May 2000 Letter were intended to provide the respondent with enhanced entitlements if the appellant decided to terminate his services for a particular reason. The entitlements would arise if the decision was made, at least in part, not because of any perceived deficiency in the respondent's ability to perform his duties, but because the position he held was to be abolished or because the responsibilities attached to it were materially changed. If, for example, Ms Mansoor terminated the respondent's employment because she wished to restructure the Australian operations and to redefine the role of the Managing Director, it is likely that there would have been an event of redundancy.
74 The decision to terminate the respondent's services, however, was made solely because of the belief that he had not performed his duties in a satisfactory manner. Neither decision nor the termination itself constituted an "event of redundancy" for the purposes of the May 2000 Letter. The subsequent reallocation of responsibilities was a consequence of the termination and could not give the termination a characteristic that it lacked at the time.
75 It follows that the respondent's challenge to the second ground for the primary Judge's decision also succeeds. Accordingly, the appeal must be allowed.
RESTITUTION
76 The parties filed written submissions after the hearing as to the orders that should be made by way of restitution, consequential on the allowing of the appeal. There was no dispute that the respondent should be ordered to repay the sum of $150,650.18 paid by the appellant pursuant to the orders made by the primary Judge: Supreme Court Act 1970 (NSW), s 75A(10); UCPR, R 51.54; TCN Channel 9 v Antoniadis (No 2) [1999] NSWCA 104.
77 The parties did not agree, however, as to the interest, if any, that the respondent should be ordered to pay on that sum. The appellant claimed interest at the rate set out in Schedule 5 to the UCPR. The respondent submitted that either no interest should be payable or the rate should be equivalent to the Reserve Bank target cash rate for the period concerned. This submission was put on the basis that the Schedule 5 rates would constitute a penalty to the respondent, who had acted in good faith. Moreover, so it was said, the cash target rate represents a close estimate of the highest return available to a prudent investor.
78 The principles governing the rate of interest in a restitution case such as the present were stated in Heydon v NRMA (No 2) [2001] NSWCA 445; 53 NSWLR 600, at [30]-[32], per Mason P (with whom Beazley and Ipp JJA agreed). The general principle is that restitutionary interest is awarded at the rates payable on judgments unless special circumstances exist (at [32]). This approach is taken, in part, because:
"[t]here is no reason to assume that the [Schedule 5] rates are fixed in disregard of commercial reality or that they embody a deterrent or punitive intent" (at [31])."
79 The only evidence the respondent has sought to adduce in order to support his submission on interest is correspondence which is said to show that a proportion of the money paid to the respondent represents a superannuation contribution to which he was entitled. A letter of 21 August 2006 from the appellant indicated that the amount paid at that time to the respondent included a superannuation payment directly to the respondent's superannuation fund, equivalent to 12% of his salary for three months, no such payment was actually made. The correspondence relied on by the respondent suggests that, despite the terms of the letter of 21 August 2006, the appellant may not have paid any amount to the superannuation fund.
80 Had the respondent wished to raise the issue of non-payment of the superannuation contribution at trial, it would have been necessary to amend his pleadings. A letter of 27 March 2008 foreshadowed such an amendment, but an application to amend was never made. Consequently, her Honour was not asked to resolve the factual question of whether the superannuation contribution was or was not made.
81 The respondent has not established that this Court should depart from the usual practice relating to restitutionary interest. Nor is there any basis for offsetting against the amount of interest a sum equivalent to the superannuation contribution which the respondent now says was never paid. Accordingly, interest should be paid on the restitutionary amount at the rate specified in Schedule 5 to the UCPR.
82 As I have noted, the appellant did not include in its notice of appeal the restitutionary orders it sought. No injustice will be occasioned to the respondent if the notice of appeal is amended to include the claim foreshadowed by the appellant on the hearing of the appeal, since there is no dispute that the appellant paid the amount due under the orders made by the primary Judge: see UCPR, rr 51.52(3); 51.54.
83 The appellants have indicated that they wish to seek a special costs order if the appeal is allowed. Accordingly, the orders I propose include provision for submissions on costs.
84 The orders I propose are: