Lord v Toll Transport Pty Ltd [2026] FedCFamC2G 348

1. The Court accepts the submission made on behalf of Lord that Toll could not unilaterally seek to amend the terms of Clause 7(a) of the written contract between it and Lord so as to provide for the giving of a 3-month period of notice prior to termination. So much is trite.
2. In circumstances where no written notice period was specified in the employment contract governing Lord's termination, the Court will imply a term into the contract that a reasonable notice period was required to be given. The Court respectfully adopts what McHugh JA held at pp. 443 B - 445 F and at 448 E - F in Crawford Fitting Co & Ors v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 439 which was as follows:

443B The principles applicable:

When the question arises whether a commercial agreement for an indefinite period may be terminated, the answer depends upon whether the agreement contains an implied term to that effect: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd [1948] AC 173 at 205; Martin- Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd [1955] 2 QB 556 at 581; Australian Blue Metal Ltd v Hughes [1962] UKPC 23; [1963] AC 74 at 97; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 371, 376; [1971] 2 All ER 216 at 224, 229 and Barro Group Pty Ltd v Fraser [1985] VicRp 59; [1985] VR 577 at 583-584, 585. The existence of the term is a matter of construction. But the question of construction does not depend only upon a textual examination of the words or writings of the parties. It also involves consideration of the subject matter of the agreement, the circumstances in which it was made, and the provisions to which the parties have or have not agreed: Re Spenborough Urban District Council's Agreement [1968] Ch 139 at 147.

In Llanelly Railway and Dock Co v London and North Western Railway Co (1875) LR 7 HL 550, Lord Selborne declared (at 567) that:

"an agreement de futuro, extending over a tract of time which, on the face of the instrument, is indefinite and unlimited, must (in general) throw upon anyone alleging that it is not perpetual, the burden of proving that allegation, either from the nature of the subject, or from some rule of law applicable thereto."

In Llanelly the House of Lords held that an agreement by which a railway company was given running powers over another company's lines was a permanent and not a terminable agreement. However, with the exception of Lord Selborne, the judgments of the other members of the House were based on the terms of the agreement and not upon any general principle of construction: see Lord Cairns (at 560), Lord Chelmsford (at 561), and Lord Hatherley (at 565).

Although even in the second half of this century the law has been stated to be in accordance with the speech of Lord Selborne in Llanelly (see Halsbury, 3rd ed, Vol 8, par 267 at 156), the weight of twentieth century authority makes it difficult to hold that there is any presumption of perpetuity in the case of commercial agreements: Crediton Gas Co v Crediton Urban Council [1928] Ch 447; Winter Garden Theatre (London) Ltd v Millenium Productions Ltd; Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd; Re Spenborough Urban District Council's Agreement; Australian Blue Metal Ltd v Hughes and Decro-Wall International SA v Practitioners in Marketing Ltd.

In Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd, McNair J said (at 577) that there is no presumption of permanency in the case of an indefinite commercial agreement but that if there is it is in favour of termination and not perpetuity. Buckley J has also expressed the view that there is no presumption either way: Re Spenborough Urban District Council's Agreement (at 150). To the same effect is the judgment of Lockhart J in State Bank of New South Wales v Commonwealth Savings Bank of Australia (1985) 6 FCR 524 at 554; 60 ALR 73 at 101. However, it is not easy to reconcile these statements with the principle that there is a general presumption against adding to a contract a term which the parties have not expressed: Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 at 137 per Lord Wright. In principle, the better view would seem to be that, although there is presumption against implying a term that an agreement is terminable, ordinarily the nature of a commercial agreement will lead to the conclusion that the parties must have intended it to be terminable on notice. This was the effect of the approach of the courts in Winter Garden; Martin-Baker; Spenborough and Decro-Wall.

Whether a contract is terminable on reasonable notice instead of at will also depends upon the existence of an implied term: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 206); Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd (at 581); Australian Blue Metal Ltd v Hughes (at 99). That question is determined by the circumstances existing at the date of the contract: Australian Blue Metal Ltd v Hughes (at 99). However, the reasonableness of the period of notice depends upon the circumstances existing when the notice is given: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 199-200); Australian Blue Metal Ltd v Hughes (at 99); W K Witt (WA) Pty Ltd v Metters Ltd and General Industries Ltd [1967] WAR 15 at 23-24; Decro-Wall International SA v Practitioners in Marketing Ltd (at 370; 224; 376-377; 229; 381; 234).

When a contract is terminable on reasonable notice, the period of notice must be sufficiently long to enable the recipient to deploy his labour and equipment in alternative employment, to carry out his commitments, to bring current negotiations to fruition and to wind up the association in a businesslike manner: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 200-201); Australian Blue Metal Ltd v Hughes (at 99) and W K Witt (W A) Pty Ltd v Metters Ltd (at 24-25). But in the latter case Hale J denied (at 23) that it is relevant to the reasonableness of the period of notice that the recipient needs time to recoup any expenditure incurred.

The appellants asserted that the decision in W K Witt (W A) Pty Ltd v Metters Ltd and the decision of the Judicial Committee in Australian Blue Metal Ltd v Hughes supported their claim that the reasonableness of a notice period does not take account of the expenditure outlaid by the recipient of the notice or his efforts in creating the conditions which will enable profits to be earned in the future. The appellants contended that these matters are only relevant in determining whether the agreement has existed for a reasonable period.

In W K Witt (W A) Pty Ltd an agent expended time and money in developing overseas markets and securing orders. After the relationship of the parties had been in existence for almost two and a half years, the manufacturer gave less than four months notice of termination. The agent claimed that it should have twelve months notice because another year was needed to recoup its expenditure. Hale J said (at 23) that an implied term requiring reasonable notice of termination should be capable of implementation in a reasonably practicable manner and that the task would be difficult and virtually impossible if the manufacturer needed to form an opinion "based on the profit which the plaintiff might be expected to make in the future". He rejected the agent's contention.

In Australian Blue Metal Ltd v Hughes, the parties entered into a written agreement which gave the "right to mine for magnesite" in return for a royalty. The Judicial Committee held that the agreement was terminable at will with a period of grace to remove any mineral already mined. However, Lord Devlin, in tendering the advice of the Judicial Committee, said that it would not have made any difference to the result of the appeal if the agreement was terminable only on reasonable notice. He said (at 99):

"The implication of reasonable notice is intended to serve only the common purpose of the parties. Whether there need be any notice at all, and, if so, the common purpose for which it is required, are matters to be determined as at the date of the contract; the reasonable time for the fulfilment of the purpose is a matter to be determined as at the date of the notice. The common purpose is frequently derived from the desire that both parties may be expected to have to cushion themselves against sudden change, giving themselves time to make alternative arrangements of a sort similar to those which are being terminated."

Lord Devlin said that there was no evidence from which it could be inferred that a factor operating in the minds of the parties at the time when the contract was made was that it should not be terminated abruptly just "when their operations were moving out of an unprofitable phase into a profitable one". He also said that there was insufficient evidence of any heavy initial expenditure which could only be recouped in time. Accordingly, Lord Devlin said (at 99) that the Judicial Committee could not "infer as the common purpose of any requirement of reasonable notice anything more than the ordinary purpose - time on the one hand for the appellants to deploy their labour and equipment profitably elsewhere and, on the other hand, for the respondents to find another licensee".

Although the Judicial Committee's references to the common purpose being in existence at the time of the contract and to the lack of evidence of any heavy "initial" expenditure are consistent with the appellant's contentions in this case, they do not really assist it. The notice in Australian Blue Metal Ltd v Hughes was given within ten weeks of entering into the agreement. The reference to initial heavy expenditure, therefore, does not have the significance which in another context it might have had. Moreover, the common purposes, which give rise to a requirement of reasonable notice, are not necessarily the same for a distributorship agreement, for example, as they are for the type of agreement considered in Australian Blue Metal Ltd v Hughes.

...

448E The chief purpose of a notice for a reasonable period, therefore, is to enable the parties to bring to an end in an orderly way a relationship which, ex hypothesi, has existed for a reasonable period so that they will have a reasonable opportunity to enter into alternative arrangements and to wind up matters which arise out of their relationship. Matters to be wound up will include carrying out existing commitments, bringing current negotiations to fruition, and, where appropriate, obtaining the fruits of any extraordinary expenditure or effort carried out within the scope of the agreement. The line between ordinary recurrent expenditure and effort and extraordinary expenditure and effort will not always be easy to draw. But in general it will be determined by what the parties would reasonably have contemplated was extraordinary effort or expenditure.

1. In the present case, Lord was a veteran in the Toll Group of companies, his employment with them having spanned 34 years before it was terminated. There was no evidence that during such period of employment Lord had committed any act which constituted misconduct, gross negligence or insubordination. He had a clean employment record and was well liked and loyal. He had been the recipient of bonuses and STI payments for achieving key performance indicators (KPIs) up until the 2019 financial year. The matters listed above were all factors which supported Lord's claim that a reasonable notice period was 12 months. Further, for such a long-standing employee, the notion of respect ought also to have been one of the factors to be considered when fixing the termination notice period in respect of Lord's employment. Lord's loyalty and historical knowledge was a valuable asset to Toll across the board and had been for a long period of time.
2. What is found to be a reasonable period of notice which ought to have been given to Lord must be judged objectively as at the time of the giving of the notice of termination. As earlier referred to in these reasons, Pollington was offered a 6-month notice period after 20 years of service with the Toll Group of companies. Lord's period of employment was substantially longer.
3. At the time of termination, Lord was aged 59 years. At that age, Lord's prospects of transitioning to a position of equal pay and equal seniority were limited. That also ought to have been an important consideration when fixing the termination notice period for such a long-serving employee.
4. As it happened, Lord did obtain employment with a transport company called Followmont Transport some 4.5 months after his termination on 9 March 2021, but such employment was in the substantially less senior role of Regional Manager for South Queensland and Central Queensland, rather than his prior role as General Manager Queensland for Toll. Further, Lord's annual salary with Toll was $235,000.00 whereas his starting annual salary with Followmont was substantially less, being $139,726.00. [24] That salary increased marginally over time to $150,000.00 per annum.
5. Lord has claimed the difference between what he was paid over a 3 month notice period, and what he would have been paid had he been given 12 months' notice of termination. The Court finds that Toll breached an implied term of the contract of employment between it and Lord by failing to give reasonable notice of the termination of Lord's employment - namely a 12-month period notice.
6. Lord has succeeded in his claim for breach of contract, and it is accordingly ordered that Toll pay to Lord the sum of $176,250.00 plus interest at the statutory rate to be agreed between the parties.
7. Otherwise, Lord's claims are dismissed.
8. And it is so ordered.

I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan.

[1] Annexure RPL - 1 to the Lord affidavit filed on 11 April 2025 at pp. 161 - 168 of Exhibit 1A - Court

[2] See Annexure RPL - 14 to the Lord affidavit filed on 11 April 2025 at p. 259 of Exhibit 1A - (CB).

[4] [45] of Lord Affidavit filed 11 April 2025

[5] See [108] - [146] of the 6th Amended Statement of Claim filed on 20 November 2025 (the SOC).

[6] See Day 1 Transcript - p. 11.34 - 12.11.

[8] See Day 1 Transcript - p. 88.23 - .45.

[9] [25] of the Pollington affidavit filed on 15 April 2025.

[10] See Day 1 Transcript - pp. 27.3 - 28.14.

[11] See Day 1 Transcript - pp. 55.32 - 57.15.

[12] See Day 2 Transcript - pp. 124.6 - 125.42.

[14] See Day 2 Transcript - pp. 130.21 - 132.5.

[15] See Day 2 Transcript - pp. 151.33 - 153.18.

[16] See Day 2 Transcript - pp. 163.32 - 164.38.

[17] [19] - [50] of the de Lange Savage affidavit filed on 8 May 2025.

[18] See email from Rugendyke to Lord on 9 February 2021 at pp. 730 - 732 of Exhibit 1C.

[19] See email from Rugendyke to managers and employees of 4 March 2021 - pp. 734 - 735 of Exhibit 1C.

[20] See Day 2 Transcript pp. 112.13 - 113.31.

[21] [10] - [18] of the de Lange Savage affidavit.

[22] [211] and [225](e) of the Lord affidavit.

[23] Annexure RPL - 1 to the Lord affidavit.

[24] See Table 2 - Followmont Transport Earnings from 26 July 2021 - 30 June 2022 - Tab 55 at p. 1170 of