Noonan v Victorian Railways Commissioners [1907] HCA 48

Any default or failure on the part of an employé which at common | would disentitle him to claim to be retained in the service of the Rail

Geen Commissioners is such a fault as to disentitle him to compensation, Tsaaes and Higgins J. Held, therefore, (Higgins J. dissenting) that, under secs. 70 and 93 of

Railways Act 1890, the Railways Commissioners may dispense with U

services of an employé who was appointed before the passing of the Vi Railways Commissioners Act 1883, and who is no longer ready and willing t discharge, or who becomes permanently incapable of performing, his dutie without being liable to pay compensation to such employé.

Per Higgins J.: - I. The letter of 31st December 1904, as to which all the special case is stated by agreement, shows that the Commissioners did n remove the plaintiff for any fault or incapacity, but because they had longer use for his services." II, The same letter shows that he was rem under the statutory absolute power contained in sec. 70; and the Con sioners could not now rely on any other power, if they had any other.

fitial for breach of regulations &c, under secs. 86-88 ; (2) by removal on irrespective of conduct, but at the will of the Commissioners under

Victorian Raitioays Commissioners v. Brown, 3 C.L.R., 316, explained and followed.

Judgment of Supreme Court (Noonan v. Victorian Railways Commissioners,

preAL from the Supreme Court of Victoria. an action in the County Court of Victoria, brought by am Francis Noonan against the Victorian Railways Commis- s, a special case was stated for the opinion of the Supreme which set out the following facts : - plaintiff by his plaint summons claimed, inter alia, a ation that he was entitled to a retiring allowance to be uputed under the provisions of Act No. 160. The plaintiff was in May 1883 employed as an engine cleaner Department of Railways, that Department having in the ar 1862 been declared to be a temporary Department by the vernor in Council under the provisions of the Act No. 160.

the plaintiff continued to be employed as such cleaner, and i ds in the year 1889 passed his examination as engine- er and was appointed as engine-driver in January 1890. plaintiff continued to perform the duties of his office as gine-driver from 1889 until March 1903 at a salary or wages beginning at 11s. per day,and which from October 1899 onwards vas 14s. per day. The plaintiff was not called on to effect, and did not effect, m insurance on his life as provided by sec. 82 of the Railway

e plaintiff in the month of March 1903, having received a al certificate as to his physical condition, applied to the endants for leave of absence on the ground of ill-health, and 26th March 1903 received leave of absence for six months that date, during which period he was absent on leave.

plaintiff on the 22nd September 1903, having received a medical certificate as to his physical condition, made a er application for leave of absence, but the railway medical

'are only two modes of discharging an employé in the railways : - (1) by H. C. of A. 1907.

H. ©. oF A. officer having reported that in his opinion, though the plain 1907. was suffering from neurasthenia and that his heart was n Nooxax absolutely sound, he was able to resume duty, the plaintiff Victarsax 02 the 11th November 1903 directed to resume duty. In rep Ralnway: C STONERS.

After some further correspondence, in the course of which plaintiff was directed to report himself for duty as a pumper Boort at 8/- per day, but declined to accept the position, a char of misconduct was made against the plaintiff for having disobe: orders in refusing to go to Boort. This charge was heard by a_ Board and was dismissed, but the plaintiff having appealed to

be given another chance and directing him to report himself fo duty as engine-driver at Benalla. But the plaintiff, owing to ill- health, did not report himself for duty until 20th May 1904, a then for one day only, and-on 28th June 1904, he wrote to the Chief Mechanical Engineer, applying for permission to retire on a superannuation allowance. This permission, however, wa refused by the Governor in Council on the 28th June 1904. Further correspondence then took place in the course of which the plaintiff was offered work as a skilled labourer at 6/- per day, and finally on 31st December 1904 the Secretary of Railways wrote to the plaintiff as follows : - "Tam directed by the Victorian Railways Commissioners to inform you that they have no longer use for your services, a that the Victorian Railways Commissioners have, under the pro- visions of the Railways Acts, determined your employment by them and removed you from their service from the date of this notification. It is intended to pay you any wages that may be due to you for the period up till and inclusive of the date of this notification, from which date your employment will absolutely terminate." 7 4 From the 20th May 1904 to the 17th November 1904 the plaintiff owing to ill-health did not present himself for duty, did no work, and did not receive any pay. On the 18th, 19th, 22nd, 23rd, 24th, 25th and 26th November 1904 the plaintiff was _

s rate of 7/- per day. The plaintiff, since the 26th November owing to ill-health had not presented himself for duty, had ne no work, and had not received any pay. e defendants refused to pay the plaintiff any compensation ring allowance, or anything in lieu thereof. The plaintiff's were not dispensed with in consequence of any change Department or reduction of the number of officers, save d t as far as the mere fact that an employé's services ing dispensed with at the pleasure of the Commissioners may int to a change in the Department or a reduction in the ber of officers. The plaintiff was not charged under the provisions of any of 'sections of the Railways Acts with any offence, misconduct, each of the regulations of the Department. Among the questions submitted for the opinion of the Supreme was the following : - "(c) By the defendants determining the plaintiff's employment nd in the manner set out in the letter of the 31st December 04, is the plaintiff entitled to compensation or retiring allow- ce to be computed under the provisions of Act No. 160 or any amount in lieu thereof by way of damages for wrongful or otherwise ?" was agreed between the parties that, in considering the e question, the form of such question was not to preclude from having regard to the plaintiff's absence from duty id state of health as set out in the case and the correspondence ' ed thereto; that the Court should consider how far, if at I, the defendants were entitled to rely on the circumstances with the plaintiff's state of health and absence from , having regard to the terms of the letter of the 31st nber 1904; and that for the purpose of deciding that ques- the Court should be at liberty to draw any inference of fact the allegations in the case and correspondence. correspondence, so far as is material, is set out in the ents hereunder.

d as a skilled labourer, and was paid for such work at H- ©. or A

. question above set out was answered in the negative: Noo

v. The Victorian Railways Commissioners (1). The plaintiff now appealed to the High Court.

Dufiy K.C. and Starke (with them Moule), for the appel Although the Commissioners may have the power to dismi pleasure employés who were in the service before the p g the Victorian Railways Commissioners Act 1883, as was assum in Victorian Railways Commissioners v. Brown (2), an emp! so dismissed is entitled to compensation or retiring allo' under sec. 93 of the Railways Act 1890, unless he is for misconduct. The last mentioned Act, as altered by the R ways Act 1896, contains all the powers of the Commissioners to get rid of their employés, and the ordinary powers as betwi

new bargain between the Commissioners and those who y then in their service. For the future there was no way of pensing with the services of employés except by going thro the form of a trial by a Board, or by a conviction for felony, by a removal under sec. 70 of the Railways Act 1890. If tl power of removal under sec. 70 be exercised, compensation mu be paid: Gleeson v. Victorian Railways Commissioners (: Assuming the common law power to rescind contracts with thei employés was not abrogated by the Victorian Railways Con missioners Act 1883, there was no such breach of his contract the appellant as entitled the Commissioners to put an end to contract, and, if there was, the Commissioners did not evince intention to take advantage of that breach: Anson's Law of Contracts, 11th ed. p. 311. It is unimportant to determin whether the Commissioners might have dealt with the app in another way, because by the letter of 31st December 1904 they showed their intention to remove him under see. 70, The Commissioners had no right to order the appellant to work of

lower grade than engine-driver at a lower salary. If that be t it was the Commissioners who, by their breach, put an end to the contract and not the appellant. Assuming that there was power

1. (1907) V.L.R., 123; 28 A.L.T., (2) 3C.L.R., 316. oh ! ! (3) (1907) V.L.B., 129.

'ion, then the repudiation must be either an absolute or such conduct as showed an absolute refusal, to do the and the repudiation must go to the root of the contract. 'it must be shown that the Commissioners within a reason- e time accepted that repudiation as terminating the contract : ey Railway Oo. v. Brecon and Merthyr Tydfil Railway (1); Leake on Contracts, 4th ed., p. 617 ; Frost v. Knight (2). is not in a statutory contract of this kind a warranty of y to perform the work at all times.

't is not the fault of the plaintiff, within the meaning of that ion in Victorian Railways Commissioners v. Brown (3), he was unable to perform his work. Incapacity for which a itract may be terminated must either be permanent or must go root of the contract.

itehell. K.C. (with him Pigott), for the respondents. The inter- ion put upon sec. 93 of the Railways Act 1890 in Victorian wilways Commissioners y. Brown (7), viz., that compensation s indemnity for an act which but for the Statute would be unlaw- is correct. The section was not intended to give an employé a it to compensation in a case where by virtue of the relationship master and servant the Commissioners would have a right to

ense with the services of the employé without being liable in action for wrongful dismissal. The power of removal given in 70 of the Railways Act 1890 was intended to be exercisable Incases which must arise, ¢.g., of employés becoming incompetent, 'orbeing of such a character or nature that it was necessary in the interest to get rid of them, and as to which, apart from the er of removal, there was no power to get rid of the men. If power of removal is exercised, it depends on the facts whether ie employé is entitled to compensation. If the facts would not

ify removal as between master and servant where the power

(1) 831.7, 1, ab p. 117. (5) 1 BL. & E., 248; 28 L.J.Q.B., 25. LR. 7 Ex, 11, at p. 112. (6) I. Sm. L.C., lth ed., 51. SC.LR. 325. (7) 3C.L.R., 316.

Commissioners to determine this contract if there was H. ©. or A.

if the facts would j able. As engine-driver the appellant was removed when { Commissioners accepted his statement that he was incapable doing the work. The letter of 31st December 1904 was a remo of the appellant as a skilled labourer, if he was ever appointed a: such. If a servant is incapable of performing his work, master may terminate the contract: Poussord v. Spiers (1).

[Hicerss J. - Even in the case of permanent illness, contract is not terminated until the master shows an intention to terminate the contract: K- v. Raschen (2).] +

Although the master may not be justified on the reasons given for dismissal of his servant, if there are reasons which justify the dismissal, the master will not be liable for wrongful dismissal Boston Deep Sea Fishing and Ice Co. vy. Ansell (3).]

Defective eyesight is in the case of an engine-driver a thing going to the root of the contract. a ,

Starke in reply referred to Anson on Contracts, 11th ed., p. 350; Leake on Contracts, 3rd ed., p. 607; Bentsen v. Taylor, Sons & Co. (6); Barnard v. Faber (7).

GrirritH C.J. This is an appeal from a judgment of the. Supreme Court of Victoria upon a special case stated in an action : by the appellant against the respondents claiming compensation : under the Railways Act 1890. Sec. 98 of that Act provides that: :

• Every officer and employé holding office in the Railway - Department at the time of the passing of ' The Victorian Rail- 'i ways Commissioners Act 1883' shall be entitled to compensation Act No. 160 and have his rights privileges and immunities saved :

or retiring allowance to be computed under the provisions of the - to him as if such first-mentioned Act had not been passed, but |

() 1 Q.B.D., 410, at p. 414. (5) 88 L.T., 288. (2) 38.L (6) (1893) 2Q.B., 274, at p. 280, (3) 39 Ch. D., 330, (7) (1893) 1 Q.B., 340, at p. 343.

| for the purposes of this Act be deemed to have been H.C. or A. inted by the Commissioners without any other or further =

=~ pointment." By sec. 70 of the same Act it is provided that: - - Nooxan e Commissioners shall . . . . from time to time viennaeie

appoint or employ such engineers . . . and other and employés to assist in the execution of this Act as the ioners think necessary or proper, and such persons shall gis cy. office during pleasure only." 'The plaintiff was appointed e the day mentioned in sec. 93, and in 1903 he had for some been, and then was, an engine-driver at a salary which then 14s, a day. In March 1903 he obtained six months leave of ence on the ground of ill-health. On 22nd September 1903 e made an application for extended leave of absence on the same nds, On 11th November 1903 he was directed to resume

in 27th November 1903 he renewed his application for six months ; xtended leave of absence on the ground of ill-health. That

pplication was not granted, and on 19th January 1904 he wrote the Commissioners : - *" After due consideration I find that your request to me to resume duty at once leaves me but one native, namely, to tender my resignation as an employé of Railway Service." In the same letter he said that his con- ition unfitted him to perform his duties as engine-driver, adding: am therefore obtaining a form of light employment which wolves no mental strain or severe physical exertion and I beg of u to accept my resignation with an acknowledgment of com- nsation rights." On 23rd January 1904 the Commissioners ed the plaintiff that, until he was again fit to take up his ld position as driver, light work would be provided for him, nd directed him to report himself on Ist February at Bendigo for duty as a pumper at a salary of 8s.a day. On 26th January

}04 the plaintiff replied: - "I . . . respectfully beg to ne the position offered, but am willing to withdraw resigna-

y 1904 he was informed by the Commissioners that were not prepared to sanction his retirement on superan- tion allowance, nor to authorize leave of absence for twelve

months, and that, unless he at once resumed duty, there woul be no alternative but to dispense with his services. He y therefore, again directed to report himself at Bendigo for du as pumper. On Ist March the plaintiff wrote to the Commi: sioners : - "I claim it as a right consistent with discipline subordination to refuse the position offered, and, as you re the leave of absence applied for, I beg to tender my resign

as an employé of the Department, and give notice that I int to prosecute my claim for superannuation allowance."

7th March he was accused of misconduct, and a board wa:

appointed to investigate the charge. The charge having been investigated and the plaintiff's dismissal having been recom- - mended, he was informed on 7th May that the Commissione would give him another chance, provided that he should fort with return to his former duties as engine-driver, " Otherwise, you fail to at once do so, they uphold the decision of the board, and confirm your dismissal." In reply to that the plaintiff wrote on

23rd May saying: - "My nervous system is such that I shrink - from the responsibilities of the position, and coupled with a most defective memory I feel that my employment in the capacity of engine-driver would be a serious menace to the Department, the public and myself," and he applied for permission to retire from the Department on superannuation allowance. On 18th July he was informed that his application for permission to retire had been definitely refused, and was required to report himself at North Melbourne on 26th May for duty as a skilled labourer at 7s. per day. He was also informed that, if he failed, or neglected, or refused to resume duty as a skilled labourer at the - rate of pay fixed, he would render himself liable to punishment for disobedience. On 27th July the plaintiff acknowledged that communication and wrote: - "I . . . . desire to say that the - reduction of wage is such that I am not inclined to accept the : position offered." On 13th August he received peremptory - instructions to resume duty asa skilled labourer, " otherwise you - will render yourself liable to be dealt with for a breach of the regulations." On 26th August he wrote: - "I . . . respect fully decline to accept the position offered, and beg to ask that 4 arrangements may be made to test the matter before the Appeal -

¢ was written for the Commissioners to the plaintiff : - * Tam ed to notify you that in view of the condition of your eye- the Commissioners are no longer prepared to employ you engine-driver, but they are willing to utilize your services capacity of a skilled labourer at 7/-aday. I therefore you to report yourself to Rolling Stock Inspector, Mel- at 7.30 a.m, on 18th instant for duty as a skilled labourer, | hereby notify you that if you fail or neglect or refuse to so yourself and undertake the duties of a skilled labourer your es will be forthwith dispensed with." On 17th November intiff wrote : - " I beg to acknowledge receipt of a memo. 2nd November 1904, from the Chief Mechanical Engineer, ne, from which I learn that you have retired me from ny office of engine-driver on account of defective eyesight." He stated that he enclosed an application for leave to retire,

ity of discharging the duties of my office as an engine- ." It appears, therefore, that at that time his employ- as engine-driver had come to an end. He adds that he uld nevertheless report himself for employment as a skilled , but that his attendance to do work as a skilled would be under protest. In that letter was enclosed a st to the Governor in Council that he should be permitted upon a superannuation allowance on the ground that he incapable through bodily infirmity of discharging the duties of his office. 'The plaintiff did as a matter of fact attend in pur- suance of his letter on seven days during the month of November, that was the only work that he did during the year 1904, i that on one day in May he drove an engine and found incapable of doing such work. On 14th December he was ned that the Governor in Council "has refused your applica- n for permission to retire from the service on superannuation vance, and this intimation must, as far as the Department is erned, be accepted as final, and I have to direct you to resume it once, otherwise you will be treated as being absent from without leave." The plaintiff paid no attention to that com-

" On 2nd November, more than two months later, this H.C. or A. 1907.

munication, and on 31st December he received this letter the Commissioners : - "I am directed by the Victorian Rail Commissioners to inform you that they have no longer use your services, and that the Victorian Railways Commissione have, under the provisions of the Railways Acts, determined y

These are the facts set out in the special case, and upon four questions were submitted for the consideration of the Supre Court, of which the first three were : - " (a) Were the defendant entitled to reduce the wages of the plaintiff while he was in their service except with his consent or for misconduct ? (b) Were the defendants entitled to reduce the plaintiff in rank, grade or position while he was in their service except with his consent or for misconduet ? (c) By the defendants determining the plain employment as and in the manner set out in the letter of 3lst December 1904 is the plaintiff entitled to compensation or reti allowance to be computed under the provisions of Act No. 160 o1 any other amount in lieu thereof by way of damages for wrong a dismissal or otherwise?" The Court was to be at liberty to draw inferences of fact so far as might be relevant for the purpose of - answering the third question. The case came before the Fi Court and its judgment was delivered by Hodges J. (1). The" i learned Judge quoted a passage from my judgment in this Court - in Victorian Railways Commissioners v. Brown (2), as follow:

• First, as to the meaning of 'compensation' in sec. 72 of Act No. - 767: It is clear that that word is used to signify an indemnity given to an officer who loses his appointment not by reason of any fault of his own. It is, to apply the analogy of compensation for injuries caused by the exercise of statutory powers, compensation - given for an act which causes damage, and would be unlawful but for its having been legalized by Statute. That is the meaning - of 'compensation.'" Applying that rule, the Court held that the - appellant was not entitled to any compensation, using this language (3): - ' The plaintiff himself refused to discharge the

(1) (1907) V.L.R., 123; 28 A.L.T., (3) (1907) V.L.R., 123, at p. 128; 129, 28 A.L.T., 129, at p. 131. : (2) 3C.L.R., 316, at p. 825.

of his office, on the ground that he was mentally and cally unfit. Thereupon the Commissioners offered him work at reduced pay. This he declined, and then the \issioners determined his employment, though, speaking accurately, he determined it himself. This determination, whomsoever effected, was not, apart from the Statute, a ong. The employé was no longer able to perform his duties, | was therefore no longer entitled to continue to hold the-office duties of which he was unable to discharge. He himself determined his employment by alleging his inability to and refusing to serve. We are consequently of opinion that the plaintiff is not entitled to compensation." 'The inference of fact to be drawn, if it is necessary to draw any, that the plaintiff was both unwilling to discharge and perman- ently incapable of discharging his duties as engine-driver, and mwilling, in the sense that he practically refused, to discharge y other duties. Nevertheless he claims compensation. The gument is putin this way, that the Railways Act 1890 contains plete code as to the relations between the Commissioners their employés, and that the ordinary law of master and int - and indeed the ordinary law of contract - is excluded, in short, everything is to be found within the four corners of the Statute. In my judgment the relation between the Railways Commis- 7 sand their employés is that of master and servant, and 'ir respective rights are governed by the ordinary law relating contracts of service except so far as that law is altered by the ute. Under the ordinary law, a master who discharges his servant contrary to the terms of the contract of service is liable to make ompensation by way of damages, but, if the discharge is in ccordance with those terms, he is not liable. If the service is 'inable at the will of the master, he is, of course, not liable. e Railways Act 1890 (No. 1135) as interpreted in Victorian ways Commissioners v. Brown (1) alters this law by pro- that an employé, although the service is terminable at is entitled to compensation if he loses his appointment not

• by reason of any fault of his own, The word "fault," in

sense in which it was used in that case, is not limited to acts commission. It includes any default or failure on the part the employé which disentitles him to be retained in the sery The effect is that the Commissioners are under a statutory ag ment with the employé that they will either retain him in employment or, if they refuse to do so, pay him compensation a seale fixed by the Act. They may also dismiss for mi or breach of regulations, but the fact of misconduct or bi must be proved in the prescribed manner before dismissal that cause. In all other respects the ordinary law of master servant applies. ;

Now, it is an implied condition of all contracts that a part demanding performance of the contract shall be ready and wi to perform it on his own part. Readiness and willingness incl ability, and this applies as well to a contract of service as to other contract: Harmer v. Cornelius (1). When, therefore, servant is no longer ready and willing to discharge his duties, 0 becomes permanently incapable of performing them, he relieve his master of any further obligation under the contract. He, effect, discharges himself.

The present action, then, is founded upon a statutory ment by the defendants that they would either retain the pl in their service so long as he should be ready and willing | perform his duties, or else pay him compensation at the prescribed by the Statute. It was at the defendants' option take either course, and the plaintiff's claim is for what entitled to under the agreement when they have exercised option by refusing to retain him in their service. It is clearly good defence to such an action to say that the plaintiff was n ready and willing to perform the agreement on his part. indeed, follows from the word "compensation" itself, means a pecuniary equivalent given to a person in place of right of which he has been deprived. When a servant is p manently unable to perform his duties the employer does n by refusing to continue to employ him deprive him of any ri

« under such circumstances he no longer has any, and there ea: no question of compensation. hhis is in substance the defence raised upon the special case, ni in my opinion, it is proved by the facts set out. me argument was founded upon the terms of the letter of December 1904, but in my judgment the form of that letter 'material. The plaintiff having no right to be retained in employment, its termination cannot give him any right to plain, in whatever form that termination is announced to

or these reasons I think that the appeal should be dismissed.

Barron J. read the following judgment. he plaintiff was employé holding office in the Railway Department at the of the passing of " Act No. 767, the Victorian Railways nmissioners Act 1883, and was therefore entitled, within meaning of sec. 72 of that Act (now sec. 93 of the Railways ct 1890) to compensation or retiring allowance to be computed the provisions of the Act No, 160 (the Civil Service Act ). In Lhe Victorian Railways Commissioners v. Brown this Court, affirming the judgment of the Supreme Court Victoria, held that a railway employé who, when similarly slding office, had been removed from the service by the Com- ers without any fault of his own, was entitled to com- tion under the Act No. 767, sec. 72. It is claimed by present plaintiff that he was similarly entitled. Brown's ser- had been determined in invitum. Not only was he not d with misconduct, but there was no suggestion that he either unwilling or incapable to continue in the fulfilment of »service. Here, it is quite clear from the special case and the spondence attached to it, that the plaintiff was either willing or unable so to continue. It has not even been seriously argued, so strong are the facts, that he was both ready nd capable. If we give full credence to his own assertions, he neither, and I see no reason to disbelieve him. That being e substantial difference in fact between the present case and s, it is argued for the appellant that there is no differ-

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALKS,

Action of deceit - Contract of sale induced by false representation - Fraudulent tention - Misdescription of property sold - Inspection by purchaser - Measi damages - Evidence - Contradicting statements of adverse witness.