The evolution of the implied term of trust and confidence is a fact. It has not yet been endorsed by your Lordships' House. It has proved a workable principle in practice. It has not been the subject of adverse criticism in any decided cases and it has been welcomed in academic writings. I regard the emergence of the implied obligation of mutual trust and confidence as a sound development.
28 The first observation to be made in respect of that case is that the conduct which constituted the breach of the implied term of mutual trust and confidence was conduct which occurred during the course of the employment relationship. However, Marks J in Bowker and Anor v Prophecy Technologies Pty Ltd, Unreported 26 May 1999 - IRC99/291, a considered judgment on interlocutory matters including injunctive relief pending trial, considered the decision in Malik in conjunction with the decision of the House of Lords in Spring v Guardian Assurance (ibid) and adopted the view that the respondent had prima facie breached its obligations to the applicant by publishing views which would unreasonably injure the applicant with respect to future employment prospects; this conduct had occurred subsequent to the termination of employment. His Honour found this conduct to justify an interlocutory injunction or order, otherwise held to be within power having regard to the facts of the matter, to restrain the respondents from repeating that conduct pending the trial.
29 In Spring v Guardian Assurance (ibid) a former employee of the respondent had been the subject of an unfavourable reference supplied to a prospective employer after the termination of employment with the respondent. The House of Lords held, by majority, that there was an implied term in contracts of employment that an employer would ensure, in preparing and supplying a reference for employment, that reasonable care would be employed. Lord Goff, who was in the majority, said (at p.320):
Where the relationship between the parties is that of employer and employee, the duty of care could be expressed as arising from an implied term of the contract of employment, i.e. that, if a reference is supplied by the employer for the employee, due care and skill will be exercised by him in its preparation. Such a term may be implied despite the absence of any legal obligation on the employer to provide a reference (as I understand to have been accepted by the parties in the present case), and may be expressed to apply even after the employee has left his employment with the employer. But in the present case this adds nothing to the duty of care which arises under the Hedley Byrne principle, and so may be applicable as a tortious duty, either where there is no contract between the parties, or concurrently with a contractual duty to the same effect.
30 It is noteworthy that the speeches in the House of Lords considered but did not decide the debate about whether the appellant was engaged under a contract of service or a contract for services, taking the view that the implied duty should be inferred regardless.
31 I refer also to the judgment of Harper J in Wade v State of Victoria and Anor [1999] 1 VR 121. In that matter Harper J was required to consider an action in which a former member of the Victorian Police Force sought to recover economic loss said to result from the provision of information by the Victoria Police to the Queensland Criminal Justice Commission which was false and misleading and caused him to lose employment with a manufacturer of gaming machines. His Honour considered whether a cause of action in negligence was maintainable in respect of the same conduct which would give rise to an arguable action in defamation. After considering the decisions of the House of Lords in Malik and in Spring v Guardian Assurance (together with a number of other relevant authorities) his Honour said at p.143:
In summary, it seems to me that an employee or former employee about whom incorrect information is carelessly disseminated by his or her employer or former employer has a cause of action against that employer if the employee suffers financial loss thereby. Restricting the employee's rights to those available under the law of defamation may produce real injustice. It will also create anomalies in situations where what is carelessly said about the employee is damaging, perhaps highly so, but not defamatory.
32 Mr Trew's submissions included the proposition that s.106 does not evince a legislative intention that the section was intended to embrace a claim in defamation, in which matters of liability ordinarily would be determined by a jury. However, the fact that a breach of such an implied duty, if that duty arose as it would appear inevitably to have done in this case, might give rise to an alternative action at law for the recovery of damages is no knock-out point here. So much is made clear by the judgment of the majority in Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69 at 78 (pars. 20, 21) and in the cases there cited.
33 It would seem that, should the applicant succeed on this aspect of her claim, it would be necessary for the contract or arrangement with the respondent to be held to be unfair in that it failed to make provision of a kind which accords with principles inherent in the applicant's claim for what I might call an ethical approach. Presumably, it would be for want of that provision in her contract that the applicant might be held to be entitled to monetary compensation for such damage or loss as may have resulted from the absence of it. This would seem to me to distinguish this case from defamation proceedings simpliciter. As in Wade v State of Victoria, where the right of action in negligence was held to exist concurrently with any right under the law of defamation, here, whether there be a right of action in defamation or not, the right to proceed under s.106 arises from the terms and scope of the statute. The development of the law under s.106 and, importantly, the legislative intention with respect thereto, has led to the position where contracts, apparently fair during their operation, but found unfair as the result of their termination are now routinely the subject, perhaps now the staple diet, of s.106 proceedings. The Court has become, it appears, the first port of call for many higher-income executives whose employment has been terminated. Why, then, should not the section be able to extend to a case which affects a working journalist who seeks to rely on an alleged breach by the employer of an obligation which the common law now recognises as applicable? I cannot, for myself, see any basis upon which such a proposition could be distinguished as a matter of jurisdiction from that routine position which now arises with respect to unfairness found on the issue of notice of termination of a contract in respect of which the common law would infer an entitlement to reasonable notice.
34 There does not appear to be any reason why the fact that, as alleged here, the conduct complained of occurred after the contract had ended, should alter that position. Just as the termination of a contract can cause it to be found unfair because of its deficiencies, so here the post-employment conduct, arguably amounting to a breach of the trust and confidence implication in the contract itself, may make the contract unfair in the statutory sense. The conduct arises out of and is directly referable to the contract itself.
35 The submission against jurisdiction also includes the proposition that the proceedings are "colourable" in the sense of being commenced simply in order to attract the jurisdiction of the court. A number of federal court authorities were referred to including Lynch v Sisters of Charity of Australia (1997) 76 IR 239 (the Full Bench of the Federal Court) in which this was said (at p. 240):
Ms Lynch contended that the Court could determine other issues which arise out of the same substratum of facts as her application under s170EA and therefore arise in the associated and/or accrued jurisdiction of the Court. However as the Full Court of IRCA held in Gunnedah Shire Council v Grout (1995) 62 IR 150 there is no jurisdiction to hear an associated or accrued claim where the primary claim is colourable or made for an improper purpose of fabricating jurisdiction. See also Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219.
36 In Beahan v Bush Boake Allen (ibid at p.42.5) the Full Bench said:
In short, our view is that s109A operates to exclude a contract of employment from the operation of s106 only where the unfair contract claim is an unfair dismissal claim in disguise and where essentially it is of the nature of an unfair dismissal Where a claim challenges the terms or operation of a contract of employment by genuine, not superficial or coloured, reasons related to the contract itself then, in our view, it is a claim properly within ss106 and 109A has no operation in relation to it. A review of the allegations made in the present case, we are satisfied, discloses allegations directed to the contract of employment and not to the applicant's dismissal. It is properly within s106. Accordingly, the grounds supporting the motion have not been made out.
37 It may be readily conceded that the claim here is unusual, perhaps novel. The submission that the claim is colourable arises from the obvious qualities which justify that description and ultimately may not be able to support a remedy. But this aspect of the claim, even if suffering these doubts, does not seem to me to be so "obviously groundless" as to be necessarily without jurisdiction. I consider the applicant is entitled to have her claim in relation to her contract litigated, on the basis that it does not meet the tests, referred to earlier, in General Steel Industries Inc. v. Commissioner for Railways (NSW) - see par. 11 hereof, but rather does admit of argument.
38 It seems to me this is particularly so when it is recalled that there are aspects of the claim which relate to the relationship during the actual engagement. Those claims concern alleged unfair treatment and the imposition of unreasonable deadlines for story preparation. Although those issues would seem to present only a small aspect of the whole summons, those matters, in conjunction with the arguably sound basis for the other claims, cause me to reject this part of the motion.
39 I would therefore grant the motion to the extent it seeks to limit the application in its reliance on claimed collateral arrangements, which involves the s.107 claim. I would reject the motion with respect to the applicant's claims in respect of her former contract or arrangement with the respondent.
40 I direct the respondent to file and serve within 14 days a draft order to give effect to this judgment.