Michael Thomson & anor v Societe Generale Australia Limited & anor [2006] NSWIRComm 227 | Case summary

2 I made certain findings of unfairness and, consequent upon those findings, the first applicant's contract of employment with the first respondent was varied in the manner set out in the judgment. The proceedings were then stood over to allow the parties to consider the reasons for judgment "with respect to any order for the payment of monetary compensation." I did so because I was concerned "whether there is any or sufficient evidence to allow the Court to make any appropriate order so as to reflect a particular monetary amount…." as will be seen from paragraphs [128] to [130] of the judgment. The matters of concern were limited to the calculation of the profitability of certain transactions by reference to the usual accounting principles adopted by the first respondent "confined, however, to any allowances which were specific to the transaction." 3 The applicants exercised the liberty to apply given in the judgment to have this outstanding matter dealt with. A hearing date was fixed for this purpose. However, prior to the hearing of this outstanding issue, the applicants filed a notice of motion on 1 June 2006 seeking orders for the re-opening of evidence "as a consequence of the late production of a draft contract" that became exhibit 26 in the proceedings. The applicants sought leave to call for cross-examination in the proceedings as re-opened "a named person, any person involved in the chain of instruction in relation to documents as that chain becomes clear" upon the examination of that named person and to recall for further cross-examination four persons "and any other deponents in the proceedings in connection with matters connected howsoever with the late production of the draft contract or with the draft contract itself…." 4 The draft referred to was a draft of special conditions that were inserted in the first applicant's contract of employment with the first respondent. I dealt with the late production of the draft and its impact on the proceedings in paragraph [76] and [77] of the judgment, which I reproduce hereunder: [76] I should refer also to the fact that a draft of the special conditions was not discovered to be in existence and was not made available to the applicants' solicitors until very late in the proceedings. The draft consists of typed material which has been struck out using blue ball-point pen. There appears on the back of the previous page some handwritten material in pencil which is identical to the words used in the contract of employment as signed by the parties. The printed material in dealing with what became special condition (i) refers to: "…a performance benefit equal to 50% of net revenues which are both generated by you and earnt by SGAL Financial Markets from the specified clients…Net revenues are to be calculated in good faith by SG and will reflect deductions for SGAL's charges for credit and required return on equity usage". With respect to the material which became special condition (ii) there is a reference to "…net revenues generated by you from non-specified clients" and an entitlement "…to receive total benefits 'being total package costs plus performance benefit' equal to 15% of those net revenues less SGAL's charges for credit and required return on equity usage".

5 A number of reasons were advanced on behalf of the applicants in support of the orders sought in the notice of motion. These included the following: (1) The judgment of 24 March 2006 was not a final judgment. In order to deal fairly with the applicants' claims it would be necessary to consider the circumstances in which the draft contract was produced to the Court at the end of the hearing and to allow this matter to be pursued by way of evidence. (2) The applicants wish to pursue a line of reasoning to the effect that the draft provisions had been changed deliberately so as to preclude the applicants from becoming entitled to those benefits that had been the subject of agreement in the discussions leading up to the making of the contract of employment. (3) The existence of the draft contract conflicts with evidence given by some witnesses from which it may be inferred that a key witness, Mr Thurgaland, "knew that Mr Thomson was being sold a pup, that Mr Thomson was being deceived. Mr Thurgaland knew, because he said about the French masters, that the changes were made to accommodate the wishes of the French masters….". (The reference to the "French masters" is a reference to the second respondent of which the first respondent is a subsidiary.) (4) The result of all of the evidence is that there has been deceit on the part of the respondents and that the judgment was given without regard to that deceit. Furthermore, it may be assumed from the evidence that the respondents' attitude to Mr Thomson during the course of his employment was coloured by their desire to deceive him. As Mr Williamson, the applicants' solicitor said during submissions "They were setting up a situation in which Mr Thomson would be the subject of vilification, the greedy person….". (5) The matter was not raised earlier by the applicants either at the end of the hearing, prior to or at the time of the submissions or before the delivery of judgment because the applicants assumed that the late disclosure of the draft provision of the contract of employment would have obviously resulted in the Court taking that matter into account in favour of the applicants and, in some way (which has not been appropriately explained), would have impacted upon the outcome of the proceedings. (6) The findings in the judgment would "change greatly when cross-examination takes place on the strength of" the draft contract. "In all of the circumstances, it was a reasonable position for the applicants to take to believe that the findings would be made between the differences in the documents. If the applicants were wrong on that, they shouldn't be punished, because we're not dealing with final judgments, we're not dealing with the principles in Autodesk or any of those cases, we're dealing with a case which is still open where justice still has to be done….it cannot be done until the full information is there….". (7) "The only way that the draft contract can now be properly looked at is by Your Honour re-opening the evidence….There are matters involved in this draft contract which are directly connected with those matters which remain open in the judgment….we should not be punished because of the failure to produce pursuant to a summons with a penal notice attached and there has been no explanation why there was a breach of that order….". 6 The respondents opposed the re-opening of the proceedings. There are a number of factual matters that need to be referred to before considering the relevant principles. The respondents pointed to the following: (1) The applicants had the opportunity of cross-examining Ms Gee, a significant witness with respect to the preparation of the contract of employment, after the production of the draft contract and did so. (2) The applicants had an opportunity of cross-examining another significant witness, Mr Dhost about the same issue, again after the production of the draft contract, but chose not to do so. (3) The applicants had an opportunity to apply for leave to further cross-examine two other witnesses, Messrs Thurgarland and Harvey either on 10 June 2005, because the hearing did not run until 4pm that day, or at any time prior to the commencement of closing submissions on 24 October 2005 and chose not to do so. (4) The applicants had expressed their concern to the respondents with respect to the late production of the draft contract in correspondence from the applicants' solicitors dated 1 July 2005 and 9 September 2005 and yet made no application to the Court to further examine any witness prior to the filing of the notice of motion. (5) The applicants made an attempt to introduce further evidence on 24 October 2005 relating to a particular matter, which was rejected, but nevertheless at that time did not apply for leave to further cross-examine any witness with respect to the late production of the draft contract. (6) In the course of closing submissions, on 24 October 2005, in the course of an exchange between Mr Hodgkinson and me, there was reference to exhibit 26, being the draft referred to. I said to Mr Hodgkinson "I must say, for my part, I think to rely on anything in exhibit 26 is unsafe, because there's just not sufficient evidentiary material about the document and about the author and about the circumstances in which the change was made to make it safe to rely on in any way." The respondents proceeded, thereafter, on the basis that that document would not be considered by me in the course of my judgment. The applicants' counsel did not make any comment with respect to this approach. (7) At all relevant times since the disclosure of the draft on 10 June 2005 and up until delivery of judgment, the applicants had an opportunity of making application for witnesses to be recalled and for further evidence to be adduced with respect to the non-production of the draft contract provision. (8) Nevertheless, the applicants' submissions dealt with the failure to produce the draft and the inferences that might be drawn from this, including the credibility of Messrs Thurgarland and Harvey. (9) The credibility findings which the applicants seek to have made concerning the late production of the draft provision would have no impact upon findings that the contract did not reflect the negotiations conducted by representatives of the respondent with the first applicant and the decision to terminate the employment of the first applicant. Nor would these matters arguably impact upon any other relevant matter contained within the judgment and, especially, the one remaining issue identified in the judgment. (10) Many of the persons from whom it is sought to adduce evidence or with respect to whom leave to cross-examine was sought were neither called as witnesses nor, in some cases, swore affidavits for the purpose of the proceedings. Relevant Principles 7 As will be seen, there are different principles applying to applications to re-open proceedings after judgment. A distinction is made between a final judgment or order that has been perfected or entered in the records of the Court and a final judgment or order not so perfected. There are observations of a Full Bench of this Court in Ove Arup Pty Ltd v Workcover Authority (NSW) (2005) 145 IR 78 to the effect that having regard to the practice in relation to judgments and orders made by this Court, where a written judgment is prepared but also contains any orders to be made, the pronouncement of orders on the day of judgment and the immediate provision to the parties of a written copy of the judgment and orders may be said to effect, simultaneously, pronouncement and entry. This would therefore have the effect of creating a final judgment or order perfected or entered in the records of the Court. 8 The situation is complicated in the circumstances of these proceedings because I specifically reserved in my judgment further submissions with respect to a discrete issue, as I have previously described. It is possible to suggest that, in these circumstances, no final judgment or order has yet been perfected because final orders have not yet been made. The alternative approach is to characterise those orders that have been made as representing a final and perfected judgment with respect to those orders with the remainder being reserved. 9 In my opinion, it is possible to resolve this interlocutory application without determining this issue, taking the less stringent approach by assuming that this is a judgment where orders have not yet been perfected. The principles that apply to a judgment not yet perfected were stated succinctly by Brennan, Dawson, Toohey and Gaudron JJ in the High Court of Australia in Smith v NSW Bar Association (1992) 176 CLR 256. At 265, their Honours said: "….it has long been the common law that a court may review, correct or alter its judgment at any time until its order has been perfected….the power is discretionary and, although it exists up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation. Thus, if reasons for judgment have been given, the power is only exercised if there is some matter calling for review. And there may be more or less reluctance to exercise the power depending on whether there is an avenue of appeal. It is important that it be understood that these considerations may tend against the re-opening of a case…." 10 These general principles are also referred to in the decision of the Full Bench of this Court in Ove Arup, previously referred to. 11 Some further general observations about the relevant principles were also made by the New South Wales Court of Appeal in Marinoff v Bailey (1970) 3 NSWR 15. At 21, Sugarman P, Mason and Moffitt JJA in a joint judgment said: "….the general principle which we have earlier referred to, while generally said to be founded on the policy of securing finality of litigation and in fact primarily so based, does not, we think, rest solely on that consideration. It rests also, at least incidentally, upon a further consideration of public interest, namely that the Court's records should be able to be relied upon as finally and conclusively establishing the result of litigation, so that no alteration thereof should be allowed once a decision has been put into formal shape and embodied in those records." 12 These matters were also dealt with by the High Court of Australia in State Rail Authority v Codelfa Constructions Pty Ltd (1982) 150 CLR 29. At 38, Mason and Wilson JJ said that "the circumstances that will justify a re-hearing must be quite exceptional." It was said to be a power to be exercised "with great caution". Finally, I refer to observations made in the High Court of Australia in Autodesk Inc v Dyason (No. 2) (1992-1993) 176 CLR 300. Admittedly, those proceedings concerned the power of the High Court as an appellate court to re-open proceedings. Nevertheless, it may be deduced from observations made in several of the judgments in that case that the principles therein discussed would apply to the circumstances of these proceedings. Specifically I refer to the comments made by Mason CJ who although in dissent at 303 said that the relevant consideration is the neglect or default of the party seeking the re-hearing, observations by Brennan J at 308 to an application made by a party who without fault on his or her part has not had an opportunity to be heard, and the comments of Dawson J who at 317 made reference to the fact that the discretion to re-open will not be exercised "unless the applicant can show that by accident without fault on his part, he has not been heard" (which was in fact a reference to observations of the High Court of Australia in Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684). 13 Having regard to these relevant principles, and having regard to the factual background to which I have referred, I conclude that the motion now brought by the applicants cannot succeed for the following reasons: (1) They had, prior to the completion of the hearing of the evidence, an opportunity to seek the orders that are now sought in this motion. That opportunity continued until October and November 2005 when submissions were made and at which stage the applicants should have, through their legal representatives, fully considered all of the ramifications with respect to the late production of the draft provision of the contract of employment. (2) The applicants further delayed bringing the application for re-opening until after the delivery of judgment on 24 March 2006. There was a further delay until the filing of the notice of motion on 1 June 2006. (3) The applicants made a deliberate and tactical decision with respect to the document and the consequences of it not being the subject of further evidence at the time of the hearing, which runs contrary to the motion for re-opening. (4) The motion seeks leave to cross-examine three persons who did not give evidence at the trial. One of those, Mr Delores, had sworn an affidavit that was not read at the trial and not tendered. The other two persons had not sworn affidavits for the purpose of the proceedings, nor had they given evidence. (5) The applicants had, in fact, cross-examined Ms Gee concerning the production of the draft contract, had an opportunity of cross-examining Mr Dhoste about that issue but did not and had an opportunity to seek leave to further cross-examine Messrs Thurgarland and Harvey on 10 June 2005 or at any time thereafter. (6) There can be no certainty that the re-opening, in the manner sought by the applicants, will have any impact on the ultimate findings made in my judgment. This is especially so having regard to my observation that I had determined to vary the contract of employment in a manner consistent with the contents of the draft. (7) The submission by the applicants that they were confident that the late production of the draft would have led to adverse findings against the respondents going to matters such as credibility, has no merit and, in any event, is a matter more properly to be addressed by way of an appeal process. In this regard, I observe that the applicants have already filed an appeal against my judgment. (8) Many of the assertions made by Mr Williamson concerning deceit and the like as set out in paragraph [5] of the reasons for judgment are far fetched and speculative and have no factual basis. 14 For all of these reasons, I conclude that it is not appropriate to exercise any discretion to allow the applicants to re-open in the manner sought by way of the notice of motion. This leaves only for consideration submissions by the parties with respect to the discrete matter identified in my judgment, namely any monetary orders that should be made having regard to those deductions, which I have found as a matter of fairness, should be made from revenue with respect to the transactions identified in my judgment. 15 There is no reason why the respondents should not have an order for costs in their favour with respect to the notice of motion and I will proceed accordingly.

Michael Thomson & anor v Societe Generale Australia Limited & anor

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Judgment (18 paragraphs)

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Cases Cited (5)

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