conclusion
127 The applicant's claim is essentially in three parts. These are:
· a claim for nine months' remuneration, based on an alleged representation said to have been made "in trade or commerce", and also said to have been misleading or deceptive in breach of s 52 of the Act. The same claim was based, in the alternative, on an alleged collateral contract;
· a claim for damages for breach of contract, namely wrongful dismissal in lieu of reasonable notice, which the applicant submitted was twelve to eighteen months; and
· a claim for a further bonus of $34,250.00, that being the difference between the $27,400.00 actually paid, and the $61,650.00 calculated by Mr Grafton.
128 I propose to deal with these claims in the order set out above.
129 The question whether the alleged representation was made is entirely one of fact. It requires me to determine whether the evidence of the applicant, and that of Mr Grafton, should be preferred to the evidence of Mr McLaughlin, and that of Ms Gibson.
130 The applicant has the onus of proof on this issue. He must satisfy the Court, on the balance of probabilities, that Mr McLaughlin told him that he would be paid nine months' salary in the event that no employment could be found for him at the end of the three month extension. In my view, the applicant has not discharged that onus.
131 I accept Mr Staindl's submission that the applicant gave his evidence in an honest and forthright manner. To a considerable though lesser extent, the same can be said of Mr Grafton. However, the same can also be said of Mr McLaughlin and Ms Gibson. They testified that the entire discussion on 23 May 2002 concerned the reduction of the provisions in the Executive Service Agreement applicable to retrenchment, or significant diminution of responsibility, from an entitlement of twenty-one months' pay to six months' pay (together with, in the latter case, the requirement of three months' notice to be given by the employee). The matters discussed involved sufficient complexity to allow for the possibility of misunderstanding on the part of the applicant, and Mr Grafton. In other words, it is perfectly possible that all parties to the conversation have given a truthful account of what they believe took place.
132 There is one factor that seems to me to tell strongly against the applicant's version. Mr McLaughlin was an experienced Managing Director. He struck me as a cautious man, who would be unlikely to go out on a limb on behalf of an employee who was not, in any event, a friend or even close associate. He was well aware of the limits of his authority. They did not extend to offering the applicant a payment of nine months' salary in circumstances where no further employment could be found for him. Mr McLaughlin knew that the applicant had no legal entitlement to any such payment. Given that the Board had just arranged for he and Ms Gibson to carry out a review of executive agreements, some of which seemed unduly generous, and given that the applicant's contract was about to expire within two days of the meeting of 23 May 2002, it is unlikely that he would have flouted the Board's plain intentions, and offered the applicant such a generous payment, based solely upon considerations of fairness. In my opinion, he would not have done so without express authorisation from the Board. Had any such offer been made, he would certainly have ensured that it was properly documented. It would not have been done on a handshake basis.
133 I accept Mr Rinaldi's submission that had such a representation been made, it would have been referred to in terms in subsequent correspondence between the parties. References to a "negotiated exit" are inconsistent with the prior agreement alleged. Had there been an agreement of the type claimed, there would have been no question of any "negotiation". Had Mr Grafton understood Mr McLaughlin to have entered such an agreement, and then reneged upon it, he would in all likelihood have taken the matter up with him, or with the company's Board or Risk Committee. He would also have been conscious of the need to inform its insurer and its solicitors.
134 It seems to me to be likely that both the applicant and Mr Grafton have misconstrued some of the terms of a conversation, the details of which they do not recall with precision. The inherent probabilities favour the account given by Mr McLaughlin, a cautious manager, who could not have had any sensible reason to offer the applicant a nine-month payout in circumstances where he knew that such an offer would directly contravene company policy, and get him into serious trouble.
135 I consider that there may have been an element of reconstruction in the evidence of Mr Grafton. The evidence of Ms MacDonald is particularly significant. Her notes, taken during the course of a lengthy meeting with Mr Grafton on 26 March 2003, omit any reference to a representation on the part of Mr McLaughlin regarding a nine-month payout. Had Mr Grafton even hinted that such a representation had in fact been made, I have no doubt that Ms MacDonald would have noted that fact, and recorded it in her ten-page handwritten document.
136 In effect, Mr Rinaldi's submission was that Mr Grafton's evidence on this point, supporting that of the applicant, should be rejected, having come as "a bolt from the blue". He submitted that Mr Grafton was either lying or, more likely, mistaken about the events of 23 May 2002. Mr Grafton was, after all, responsible for the applicant's decision to come to Australia, and no doubt felt that the company had treated him somewhat shabbily.
137 I have some difficulty with one aspect, in particular, of Mr Grafton's evidence. His explanation for not having raised with Mr McLaughlin the failure to include any reference to the nine month remuneration payment in the note that was signed, namely that he thought Mr McLaughlin would resile from what he had only just agreed upon, struck me as contrived and disingenuous.
138 It is unnecessary for me to make any final determination regarding Mr Grafton's credibility, or indeed that of the applicant. There is simply no basis upon which I can be satisfied that their version of the events of that day should be preferred to that of Mr McLaughlin, supported as it was by Ms Gibson. Whatever inconsistencies there may have been in Mr McLaughlin's evidence, they were not of such a character as to cause me to doubt his truthfulness. The same may be said of Ms Gibson. The scenario that was implied, namely that Mr McLaughlin made the offer in question and then, regretting having done so, lied about it, is one that I reject. Accordingly, the claim based upon misleading or deceptive conduct must fail.
139 Having concluded that the applicant has failed to establish that Mr McLaughlin made the representation regarding a nine-month remuneration payment, it is unnecessary to consider whether that representation, if made, was made "in trade or commerce". I note, however, that this expression, in s 52, has been the subject of recent consideration in Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169, and Village Building Company Limited v Canberra International Airport Pty Limited [2004] FCAFC 240.
140 It is also unnecessary to determine whether that representation, had it been made, would have constituted a collateral contract. I note, however, that there would be difficulties with that claim, in any event, having regard to the parol evidence rule: Hoyt's v Spencer. The applicant's contract of employment was at all times, and was at all times intended to be, in writing.
141 The applicant's claim for damages for wrongful dismissal is based upon the premise that he entered into a new contract, separate and distinct from the Executive Service Agreement, from the time of the merger, if not earlier. As previously noted, it was common ground that the applicant was initially employed by Equigen. On 25 May 2000, he was appointed Chief Executive Officer of that company, which by then was called Decision Advantage. His Executive Service Agreement was said to derive from that appointment. On 14 June 2001, he was appointed "Managing Director International" with "Data Advantage Ltd". On one version of his case, this was a new position with a new employer, encompassing new responsibilities. Alternatively, the new position was that taken up shortly thereafter with Baycorp Advantage.
142 Mr Staindl submitted that the most telling evidence in support of this contention was the 12 October 2001 letter which offered the applicant "the position of Director International in Baycorp Advantage", setting out his remuneration, referring to the prospects for the "new company", and giving a commencement date. That letter did not refer to his existing terms and conditions of employment. It did not refer to the Executive Service Agreement. In particular, it did not refer to the expiry date of that agreement, namely 25 May 2002.
143 On the other hand, Mr Rinaldi submitted that the applicant's employer was, at all times, Baycorp Advantage Decision Solutions, the third respondent, and its predecessors. He submitted that the applicant's employer never changed. The Executive Service Agreement always governed the terms of his employment, except as expressly altered, until 24 August 2002. He noted that the applicant was, at all times, paid his salary, by Baycorp Advantage Decision Solutions, and its predecessors, and not by Baycorp Advantage.
144 According to Mr Rinaldi, the applicant's employment ended by simple effluxion of time: see [125]. Irrespective of whether his contract was for a "fixed term", in the sense in which that term is understood by industrial lawyers, it came to an end once the period of employment specified had passed. That did not constitute a termination by the respondents. The fact that the original contract contained notice terms, redundancy terms, and other provisions of that kind, was of no consequence. There was no redundancy or diminution of role during the term of the contract, or indeed during the three-month extension. The applicant was not dismissed, and remained employed until the end of the contract.
145 Mr Rinaldi correctly submitted that if the applicant remained in continuous employment with Baycorp Advantage Decision Solutions, and its predecessors, there could be no new employer, and therefore no new contract. As previously indicated, he further submitted that if the employer changed at any time, this was with the applicant's consent, and on the same continuing terms, except as expressly varied.
146 With regard to the 12 October 2001 letter, Mr Rinaldi submitted that it did not have the effect for which the applicant contended. The fact that it did not repeat the words of the 7 August 2001 letter, to the effect that the terms of employment remained the same, did not alter the position. The October letter plainly related to the same position as the August letter, and had to be read together with it. The later letter simply confirmed that the merger was proceeding, and provided some additional detail in relation to remuneration. It did not derogate from the earlier letter.
147 In my view, the evidence supports Mr Rinaldi's contentions on this issue. There is nothing to suggest that the parties ever intended to create an entirely new employer-employee relationship once the applicant completed his earlier role, and assumed his new responsibilities. If he were to move from a fixed term contract to permanent employment, it would be expected that that fact would be reflected in the written documentation. The applicant himself believed throughout, as he acknowledged in his evidence, that he was on a contract that expired on 25 May 2002, and that is a matter of some significance. I gained the sense that the "new contract" theory was the product of his legal advisers' ruminations, perhaps as a reconstruction of events, and not a contemporaneous belief on his part. It follows that the applicant has not persuaded me that he entered into a new contract of employment with a new employer on new terms. Accordingly, his claim for damages for wrongful dismissal must fail.
148 That takes me to the last of the applicant's claims. It will be recalled that Mr Grafton set his bonus payment at ninety per cent of $68,500.00. Mr Grafton had almost daily contact with the applicant, and was in a far better position to assess his performance than was Mr McLaughlin.
149 Mr Rinaldi relied heavily upon what the respondents described as a "grandfathering policy". When asked to produce a written version of that policy, all that could be done was to produce a "Human Resources Charter", attached to certain Minutes of the Board. There is a real question as to whether this Charter was applicable to the applicant, and it is clear that he had no knowledge of it. Indeed, he was not even cross-examined about it.
150 Mr Rinaldi submitted that Mr McLaughlin had exercised his discretion in relation to the applicant's bonus "in good faith", and that this Court should not conclude otherwise. The KPIs that had been applied were those that were appropriate to the position, and Mr McLaughlin gave proper consideration to each of them in accordance with the corporate respondents' grandfathering policy. Mr Rinaldi submitted that unlike Mr Grafton, whose draft assessment was purely qualitative, Mr McLaughlin's quantification was supported by careful reasoning, and by rational weightings, and scores. He submitted that the applicant had no entitlement to either the maximum bonus, or ninety per cent thereof. Baycorp Advantage Decision Solutions was merely required to consider whether a bonus was warranted, and exercise its discretion in an honest and fair manner. This, it had done, and its judgment should not be "second-guessed".
151 Mr Rinaldi's submissions on this point cannot be accepted. In this proceeding, the Court is not engaged in the task of judicial review. There is no "deference" owed to any honest belief on the part of Mr McLaughlin. The only question is whether the applicant has established, on the balance of probabilities, that he was entitled to the bonus assessed by Mr Grafton.
152 On this issue, I much prefer the evidence of Mr Grafton. He carried out his role in assessing the KPIs properly, and in a responsible manner. Unlike Mr McLaughlin, he took into account the changes in the applicant's responsibilities that required some adjustment to be made in those KPIs. I had the distinct sense that Mr McLaughlin had become somewhat peeved with the applicant by the time he came to review the KPIs. That was long after Mr Grafton had undertaken the task. It is significant that Mr McLaughlin did not consult Mr Grafton when conducting his review. I consider that the applicant earned his bonus as assessed by Mr Grafton, and that it was unfair and unjust to reduce the figure from $61,650.00 to $27,400.00. The applicant has established his claim for breach of contract with regard to the unpaid portion of the bonus, and is entitled to damages together with interest in relation to that sum.
153 I propose to invite the parties to file and serve draft orders that reflect the findings set out above. Both the applicant and the respondents have had a measure of success in this proceeding. I will consider the question of costs after hearing further submissions on the matter.
I certify that the preceding one hundred and fifty-three (153) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.