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[2025] NSWCA 181
respondent. The summons filed 21 August 2024 seeking leave to appeal was dismissed. The applicant was ordered to pay the respondent's costs ([46] and the orders).
Paulson had been dismissed from his government-sector employment in 2014. After the Industrial Relations Commission found the dismissal harsh in 2017, but considered reinstatement or re-employment impracticable, he pursued a District Court claim seeking damages based on alleged implied terms in his employment contract and a later duty to re-employ him. The District Court gave him time to amend his pleading, but he missed the deadline. It later refused an extension, reasoning that the proposed claim remained legally unsustainable and was statute barred. The Court of Appeal held that leave was needed to appeal the summary dismissal. It found that Paulson had not shown the kind of principle, public importance, or more-than-merely-arguable injustice required for leave. It also agreed that any claim based on terms governing termination would accrue when the employment was terminated, and found no sensible basis for a separate duty to re-employ him after the Commission's decision. Leave was refused with costs.
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6 cited instruments linked from this judgment.
In Paulson v State of New South Wales [2025] NSWCA 181, Free JA and Griffiths AJA considered Craig Paulson’s application for leave to appeal from a District Court order summarily dismissing his claim against the State. The application was dealt with on the papers by consent ([1]-[3]). The immediate procedural issue was not a full appeal on the merits, but whether Paulson had shown a sufficient basis for permission to appeal.
Paulson had worked in the Department of Justice from around 2000 until his employment was terminated on 20 October 2014 for alleged misconduct ([4]). He challenged the termination through several avenues. In 2017, the Industrial Relations Commission found the dismissal “harsh”, but concluded reinstatement or re-employment was impracticable. It ordered compensation based on 13 weeks’ pay ([6]). The Commission’s decision did not itself reinstate Paulson or direct the State to re-employ him.
In December 2022, Paulson commenced District Court proceedings seeking damages for breach of contract. His pleaded case relied on terms said to be implied into his employment contract from s 47 of the Government Sector Employment Act 2013 (NSW) (GSE Act). In outline, he alleged that the State had to comply with the Act when terminating his employment and had to take reasonable steps to reinstate or re-employ him after the Commission’s 2017 decision ([7], [29]).
The State applied for summary dismissal under r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) ([8]). The District Court did not then dismiss the proceedings. Instead, in July 2023 it struck out the original statement of claim and gave Paulson 28 days to file an amended one. The primary judge considered that he had not adequately addressed the requirements for implying the proposed terms, but allowed an opportunity to replead ([9], [11]).
Paulson did not file an amended statement of claim within the ordered period. His solicitor’s explanation was that he had read the reasons but not the formal order specifying the 28-day limit. The solicitor later became aware of the limit, but the proposed extension application was not filed until 29 December 2023. The primary judge noted that the delay after the solicitor became aware of the deadline had not been explained ([14]-[15]).
In May 2024, the primary judge refused the extension and leave to file the proposed amended pleading. The reasons were that the delay weighed against allowing the amendment and, independently, that allowing it would be futile because the proposed claim disclosed no reasonable cause of action and was statute barred ([18]). The District Court dismissed the proceedings and ordered Paulson to pay costs ([19]). The Court of Appeal ultimately dismissed his summons for leave to appeal and ordered him to pay the State’s costs ([46]).
The Court first resolved whether leave was needed. Although the State’s submissions had noted some uncertainty about whether a summary dismissal was interlocutory, the Court treated the point as settled. Orders summarily dismissing proceedings are interlocutory and require leave under s 101(2)(e) of the Supreme Court Act 1970 (NSW) ([21]-[23]). The Court relied on Wickstead v Browne and McGinn v Cranbrook School, with McGinn referring to the earlier analysis in Macatangay v State of New South Wales (No 2) ([22]).
The next question was whether the proposed grounds met the leave threshold. The Court cited Cheng v Motor Yacht Sales Australia Pty Ltd t/as The Boutique Boat Company for the general approach: an applicant usually needs to identify an issue of principle, a question of public importance, or a clear injustice that is more than merely arguable ([24]). The Court found Paulson had not done so ([25]).
On the alleged implied contractual terms, the Court examined the pleadings and the way they had developed. The first statement of claim asserted that the State had to comply with the GSE Act in terminating Paulson’s employment and had to take steps towards reinstatement or re-employment after the Commission’s decision ([29]). When asked to clarify the terms, Paulson’s solicitor said they were implied both by fact and by law, including because they were said to be necessary to give effect to the Act’s objects ([30]-[31]).
The primary judge had found that the pleaded material did not establish why the asserted terms met the requirements for implication, including the necessity criteria discussed by reference to BP Refinery (Westernport) Pty Ltd v Shire of Hastings ([9]). The proposed amended pleading later made only minor changes, and its particulars substantially repeated arguments already rejected ([32]-[34]). The Court of Appeal observed that Paulson’s submissions did not identify an error of principle in the primary judge’s analysis; they substantially repeated the earlier submissions ([35]). It discerned no error warranting leave ([36]).
The limitation issue depended on Paulson’s argument that his asserted right to re-employment, and the State’s alleged duty to re-employ him, only began when the Commission found his dismissal harsh in July 2017. The Court rejected that timing argument. It agreed with the primary judge that the Commission’s decision did not determine when any contractual right to sue for breach arose ([10], [37]). The Court’s own explanation was that the terms alleged by Paulson were terms “that conditioned the termination of the agreement”. If such terms existed and were breached, the cause of action accrued “at the time of the purported termination” ([38]). The Court also noted that the limitation ground depended on leave being granted on another ground, which had not occurred ([39]).
The third ground concerned an alleged independent implied legal duty to re-employ Paulson, separate from any contractual term ([40]). The Court made an important distinction. It considered that the primary judge may have treated this argument as depending on an implied term in the employment contract. If the claim was instead for a non-contractual duty, it did not logically depend on the contract still being in force in 2017 ([43]). However, that clarification did not make the claim viable. The Court concluded there was “no sensible legal basis” for imposing another form of implied duty to re-employ Paulson. The Commission had found re-employment impracticable and awarded compensation in lieu of that remedy ([44]). The Court was not persuaded this ground justified leave ([45]).
The judgment does not announce a broad change to the law of implied contractual terms or limitation periods. Its express procedural statement is that an order summarily dismissing proceedings under UCPR r 13.4 is interlocutory and requires leave to appeal under s 101(2)(e) of the Supreme Court Act 1970 (NSW) ([22]-[23]). The Court describes this as well established, relying on existing Court of Appeal authority rather than framing it as a new rule.
The leave threshold was also presented as an established approach. The Court cited Cheng for the usual requirement of an issue of principle, a question of public importance, or a clear injustice that is more than merely arguable ([24]). Its application of that threshold was specific to Paulson’s proposed grounds and the history of the pleadings.
On accrual, the judgment gives a focused proposition tied to the particular terms pleaded. The alleged terms were said to regulate the State’s conduct in terminating the employment. On that characterisation, a breach claim would accrue when the termination occurred, not when the Commission later assessed the dismissal or decided what remedy was practicable ([37]-[38]). The Court did not set out a general limitation rule for every claim involving employment or later administrative findings.
The judgment also distinguishes a contractual obligation from an asserted independent legal duty. At [43], the Court accepted that an independent-duty argument would not logically require a contract to remain on foot. At [44], it nevertheless found no sensible legal basis for the duty alleged on these facts, particularly in light of the Commission’s finding that reinstatement and re-employment were impracticable and its award of compensation in lieu. This is an application to the claim presented, not a general statement that independent employment-related duties can never arise.
The practical significance is therefore bounded. The decision applies existing procedural and leave principles and explains how the pleaded terms were characterised for accrual purposes. It does not purport to revise the established criteria for implying terms or to state a general limitation period for employment claims.
At [22], the Court stated that it was “well-established” that orders for summary dismissal are interlocutory and require leave to appeal. In plain English, the fact that the order ended the District Court case did not remove the need for permission to appeal. The classification of this kind of summary dismissal as interlocutory controlled the appeal route.
At [24], the Court said an applicant “usually needs to demonstrate” an issue of principle, a public-importance question, or a clear injustice that is more than merely arguable. “Usually” matters: the Court expressed a general threshold, not an exhaustive code. In this case, the proposed grounds did not satisfy it because the Court found no relevant error, principle issue, or viable claim requiring leave ([25], [35]-[45]).
At [38], the Court explained that the alleged contractual terms “conditioned the termination” and that any cause of action for their breach accrued “at the time of the purported termination”. In plain English, the later Commission decision did not postpone the date on which a claim based on those particular alleged terms arose. The Court treated the terms as governing the termination event, not as creating a new right to sue only after the Commission ruled.
At [43], the Court respectfully disagreed with a possible aspect of the primary judge’s reasoning. It said that, if Paulson was advancing a genuinely independent duty rather than a contractual term, the argument did not logically depend on the contract still being in force in 2017. The Court’s clarification separated two questions: whether a non-contractual duty could conceptually operate after termination, and whether there was any legal basis for the duty alleged. It answered the latter question against Paulson at [44].
At [44], the Court relied on the Commission’s actual disposition. The Commission had found re-employment and reinstatement impracticable and awarded compensation “in lieu of those remedies”. In plain English, the Court did not read that decision as imposing an additional obligation on the State to re-employ Paulson. It considered the Commission’s finding and remedy inconsistent with the asserted basis for such a duty.
The procedural aspect is relevant where a party seeks to appeal an order summarily dismissing proceedings under UCPR r 13.4 in New South Wales. The judgment confirms that leave is required because such an order is interlocutory ([22]-[23]). The leave threshold is relevant where the proposed appeal must identify a qualifying issue or injustice, rather than simply repeat rejected arguments ([24]-[25]).
The accrual discussion may be relevant where a pleaded contractual term is said to regulate the employer’s conduct at termination, while the claimant argues that a later decision by another body triggered the cause of action. The Court treated the particular terms pleaded by Paulson as conditions on termination and therefore placed accrual at the purported termination date ([37]-[38]). The judgment does not establish that every later finding is irrelevant to limitation; its reasoning depends on the nature of these alleged terms and the way the claim was framed.
The discussion of an independent duty may be relevant where a claimant distinguishes an alleged non-contractual obligation from a term implied into an employment contract. The Court accepted that the non-contractual formulation need not depend logically on the contract remaining on foot ([43]). But the case also shows that re-labelling a contractual argument as an independent duty does not itself provide a legal foundation. Here, the Commission’s finding of impracticability and compensation in lieu meant the Court found no sensible basis for the asserted duty to re-employ ([44]).
The judgment also concerns a late attempt to amend pleadings after a court-ordered deadline. The primary judge considered both the explanation for delay and whether the proposed pleading had a viable cause of action, finding that an extension would be futile ([14]-[18]). The Court of Appeal focused on whether leave to appeal that decision was justified, not on creating a general test for extensions of time.
The supplied judgment is dated 8 August 2025 and contains no account of subsequent decisions applying or distinguishing Paulson. It would therefore be unsupported to claim that later courts have adopted, limited, or rejected its reasoning.
Within this judgment, the Court relies on earlier authorities for two established propositions. It cites Wickstead and McGinn, and refers through McGinn to Macatangay, for the interlocutory character of summary dismissal orders ([22]). It relies on Cheng for the general leave threshold ([24]). These are the authorities the Court uses as the basis for its procedural analysis.
The judgment also refers to earlier stages of Paulson’s own dispute. The 2017 Commission decision and the refusal of leave to appeal within the Commission are described as background ([6]). The earlier District Court decision, Paulson (No 1), is discussed as the decision that struck out the original pleading and identified deficiencies in the proposed implied terms ([9], [32]). Paulson (No 2) concerned costs following that application ([12]). The May 2024 District Court decision, Paulson (No 3), was the decision from which leave was sought ([14], [18]-[19]). These references explain the procedural history; they are not evidence of how later courts have treated the 2025 Court of Appeal decision.
The judgment leaves open the boundaries of any independent legal duty to re-employ in circumstances different from Paulson’s. The Court decided that no sensible legal basis supported the duty alleged in this case, given the Commission’s finding of impracticability and award of compensation in lieu ([44]). It did not formulate a general test for when a statute, administrative decision, or other source might create an independent post-termination duty.
The judgment also does not comprehensively analyse the statutory interpretation of ss 47 and 69 of the GSE Act. It sets out the relevant provisions and assesses the pleaded case, but the appeal failed at the leave stage and the Court found no basis for the asserted terms or duty on the material before it ([27]-[36], [44]). The decision should not be treated as a detailed construction of every possible operation of those provisions.
Nor does the judgment address the full range of questions that might arise when a statutory employment framework interacts with contractual terms. Its conclusion on accrual concerns terms said to condition termination, and rests on the characterisation of the specific terms pleaded ([38]). Different wording, a distinct contractual promise, or a different statutory remedy could present questions not resolved here.
Finally, the Court’s consideration of the independent-duty ground was shaped by how sparsely it had been articulated. The Court noted that the claim appeared as an addendum to the proposed amendment and had not featured in the original statement of claim ([41]). The judgment consequently does not decide how a fully developed independent-duty pleading, supported by a distinct legal source and different remedial context, would be assessed.
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Paulson v State of New South Wales [2025] NSWCA 181
Hearing dates: On the papers
Date of orders: 08 August 2025
Decision date: 08 August 2025
Before: Free JA; Griffiths AJA
Decision: (1) The summons filed 21 August 2024 seeking leave to appeal is dismissed.
(2) The applicant to pay the respondent’s costs.
Catchwords: APPEALS – appeal from summary dismissal – leave to appeal required under s 101(2)(e) of Supreme Court Act 1970 (NSW) where decision is interlocutory – no question of principle, no clear injustice which is more than merely arguable, leave to appeal be refused, with costs
Legislation Cited: Government Sector Employment Act 2013 (NSW), ss 47, 69
Supreme Court Act 1970 (NSW), s 101
Uniform Civil Procedure Rules 2005 (NSW), r 13.4
Cases Cited: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Cheng v Motor Yacht Sales Australia Pty Ltd t/as The Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118
Macatangay v State of New South Wales (No 2) [2009] NSWCA 272
McGinn v Cranbrook School [2016] NSWCA 226
Paulson v Industrial Relations Secretary (Department of Justice) [2017] NSWIRComm 1037
Paulson v Industrial Relations Secretary (Department of Justice) [2018] NSWIRComm 1004
Paulson v State of New South Wales [2023] NSWDC 251
Paulson v State of New South Wales (No 2) [2023] NSWDC 413
Paulson v State of NSW (District Court (NSW), Ainslie-Wallace ADCJ, 21 May 2024, unrep)
Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272
Category: Principal judgment
Parties: Craig Paulson (Applicant)
State of New South Wales (Respondent)
Representation: Counsel:
J Capsanis, solicitor (Applicant)
M Whitbread (Respondent)
Solicitors:
JP Capsanis & Co Lawyers (Applicant)
Karen Smith, Crown Solicitor (Respondent)
File Number(s): 2024/00224623
Publication restriction: Nil
THE COURT: The applicant (Craig Paulson) seeks leave to appeal from a decision dated 21 May 2024 by the primary judge (Ainslie-Wallace ADCJ). Her Honour summarily dismissed proceedings brought by the applicant in the District Court claiming damages for breach of a contract of employment against the respondent (the State of New South Wales). The summary dismissal followed the applicant’s failure to file an amended statement of claim within 28 days as previously ordered. The applicant subsequently filed a notice of motion seeking an extension of time to file a proposed amended statement of claim. The primary judge did not grant the extension of time and leave to file the proposed amended statement of claim was refused.
The parties consented to the application for leave to appeal being dealt with on the papers.
For the following reasons, leave to appeal will be refused, with costs.
The applicant commenced employment with the respondent in or around 2000 and held various positions in the Department of Justice until his employment was terminated on 20 October 2014 for alleged misconduct following an internal investigation.
The applicant pursued several avenues of redress, including commencing proceedings in the Industrial Relations Commission (the Commission) to challenge the termination of his employment. The hearing of his application to the Commission was delayed as he agitated his claims in other forums, before finally being heard by the Commissioner in March and May of 2017.
On 7 July 2017, Commissioner Murphy found the applicant’s dismissal was “harsh”, noting that some of the allegations of misconduct on the part of the applicant were substantiated and others were not (see Paulson v Industrial Relations Secretary (Department of Justice) [2017] NSWIRComm 1037 at [258]-[259]). The Commissioner found that reinstatement or re‐employment was not practicable and ordered that the applicant be awarded compensation based on 13 weeks’ pay: [276]-[280]. The applicant sought leave to appeal from this decision, which was refused by the Full Bench of the Commission on 25 January 2018 (see Paulson v Industrial Relations Secretary (Department of Justice) [2018] NSWIRComm 1004).
On 22 December 2022, the applicant filed a statement of claim in the District Court seeking damages for breach of contract. The basis for that claim rested on two terms sought to be implied in the contract of employment that were said to arise from s 47 of the Government Sector Employment Act 2013 (NSW). This pleading was not served upon the respondent until 3 January 2023.
On 10 March 2023, the respondent filed a notice of motion seeking summary dismissal of proceedings pursuant to r 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
On 10 July 2023, Ainslie-Wallace ADCJ delivered her first judgment in this matter: Paulson v State of New South Wales [2023] NSWDC 251 (Paulson (No 1)). Her Honour found that the applicant had failed adequately to address, in both his written and oral submissions, the necessary criteria for implying the terms he sought in the employment contract either as a matter of law, or as a matter of fact. After referring to various authorities concerning implied terms (by fact or law), her Honour noted at [27] that the plaintiff had failed to identify the “necessity” for implying the asserted terms as a matter of law, nor had he demonstrated why the asserted terms satisfied the criteria for implying a term as a matter of fact, with particular reference to the criteria identified in BP Refinery (Westernport) Pty Ltd v Shire of Hasting**s (1977) 180 CLR 266 at [18], namely that the implied term must be necessary to give business efficacy to the contract (which will not be satisfied if the contract is effective without it).
Her Honour added that, in any case, the applicant’s claim must be rejected because “even if the asserted terms were implied in (sic) plaintiff’s contract, any action for breach of the contract of employment based on those terms is statute barred” (at [33]). Her Honour rejected the applicant’s contention that the implied terms survived the termination of his contract of employment and that his cause of action accrued not when his employment was terminated on 20 October 2014 but rather when Commissioner Murphy determined on 7 July 2017 that his dismissal had been "harsh". Her Honour explained at [32] why she rejected this contention:
This submission must be rejected. Nothing in the determination of the Commissioner bore on when the plaintiff’s right (if any) to sue for breach of the contract of employment arose. The Commissioner’s decision concerned the consequences of the defendant’s actions in terminating the plaintiff’s employment. The determination of the Commissioner was predicated on the fact that the plaintiff had been dismissed. That the Commissioner considered that termination of the plaintiff’s employment was “harsh” based on the misconduct found by him, but his decision does not speak to the lawfulness of the defendant’s action. The terms of s47 are that the defendant “may” terminate for misconduct, which it did.
Turning to the orders sought in the respondent’s notice of motion filed 10 March 2023, the primary judge observed that the power summarily to dismiss proceedings should be used “sparingly” and is “reserved for cases where the cause of action is such that it ‘cannot possibly succeed’”. Her Honour said at [36] that there was “considerable force” in the respondent’s submission that the statement of claim revealed no arguable cause of action based on the response from the applicant’s solicitor to the respondent’s requests for clarification of the claims asserted in that pleading, but she was not prepared summarily to dismiss the proceedings. Rather, her Honour ordered that the statement of claim filed 22 December 2022 be struck out and the applicant was given leave to file an amended statement of claim within 28 days.
On 6 October 2023, the primary judge delivered her second judgment in this matter, which dealt with the costs of the respondent’s notice of motion filed 10 March 2023: Paulson v State of New South Wales (No 2) [2023] NSWDC 413. Her Honour ordered that the applicant pay the respondent’s costs on an indemnity basis. Her Honour noted that the applicant had persisted with his claim “in circumstances where there was scant, if any, support in law or fact to support it and in circumstances where, on any view, the claim was statute barred” (at [18]).
The applicant did not file an amended statement of claim within the stipulated time.
On 21 May 2024, the primary judge delivered her third judgment: Paulson v State of NSW (District Court (NSW), Ainslie-Wallace ADCJ, 21 May 2024, unrep) (Paulson (No 3)). The judgment arose from the applicant’s notice of motion filed 29 December 2023 seeking an extension of time to file and serve an amended statement of claim. In the affidavit in support of that notice of motion, and by way of seeking to explain the delay in the filing of the notice of motion, the applicant’s solicitor, Mr Capsanis, deposed that when he received Paulson (No 1) (delivered on 10 July 2023) he read the paragraph in the body of the reasons which foreshadowed her Honour’s orders, but not the formal order set out on the cover sheet which stipulated a 28 day period for filing an amended pleading.
Mr Capsanis further deposed that it was only on 22 August 2023 that he first became aware of the 28 day time limit. Yet, despite this, it was not until 5 October 2023 that he sent a draft amended statement of claim to the respondent. And the proposed notice of motion, seeking an extension of time, and supporting affidavit were only sent to the respondent on 24 October 2023 and only filed in the District Court on 29 December 2023. The primary judge noted that the applicant’s solicitor offered no explanation for the delay between the date on which he became aware of the 28 day time limit and the filing of the notice of motion. At the hearing before the primary judge Mr Capsanis acknowledged that it would be highly unusual for a court to make an order of this kind without any time limit.
The failure of the plaintiff to file an Amended Statement of Claim within the time ordered while explained as an oversight by his solicitor was attended with significant delay in bringing the motion for an extension of time. The delay of itself speaks strongly against leave being granted.
However, to grant leave would be futile because the Amended Statement of Claim even if it contained the proposed further claims discloses no reasonable cause of action and is otherwise statute barred.
1 The primary judge erred in holding that two terms sought to be implied into the contract of employment between the plaintiff (appellant) and the defendant (respondent) said to arise out of s 47 of the Government Sector Employment Act 2013 which came into force in February 2014 did not give rise to the purported implied terms
2 The primary judge erred in holding that in any event the plaintiff’s (appellant’s) claim is statute barred.
3 The primary judge erred in not holding that the defendant (respondent) was also subject to an implied legal duty independently of any implied or express contractual term to employ the plaintiff (appellant) following upon the decision of Commissioner Murphy delivered on 7 July 2017
There seems to be some confusion whether or not leave to appeal is required in this instance. In the respondent’s submissions filed 26 June 2025, the respondent submitted at [35] that it is not clear whether a decision concerning summary dismissal of a proceeding is “an ‘interlocutory’ judgment as it finally dealt with and determined the Applicant’s claim”. Notwithstanding this, the respondent adopted the position at [36] of its written submissions that if leave is required, it should be denied.
It is well-established that orders for summary dismissal are interlocutory and require leave to appeal: see Wickstead v Browne (1992) 30 NSWLR 1 at 11; [1992] NSWCA 272 and McGinn v Cranbrook School [2016] NSWCA 226 at [9] and [20]. In the latter case, Gleeson JA (with whom Beazley P and Simpson JA agreed) referred at [9] to the analysis of the Court in Macatangay v State of New South Wales (No 2) [2009] NSWCA 272 at [11]-[12] explaining why an order summarily dismissing proceedings pursuant to UCPR, r 13.4 is interlocutory.
Accordingly, leave to appeal is clearly required: s 101(2)(e) of the Supreme Court Act 1970 (NSW).
As the Court has repeatedly stated, to obtain leave to appeal, an applicant for leave to appeal usually needs to demonstrate that there is an issue of principle, a question of public importance or a clear injustice which is more than merely arguable (see Cheng v Motor Yacht Sales Australia Pty Ltd t*/*as The Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118 at [15] per Bell CJ with whom Ward P and Basten AJA agreed, and the authorities referred to therein).
For the following reasons, we consider that the applicant has failed to meet these standards.
There is some infelicity in the drafting of the first draft ground, but in substance it challenges the primary judge’s rejection (on a summary dismissal standard) of the applicant’s contention that implied terms should be read into his contract of employment arising from s 47 of the Government Sector Employment Act 2013 (NSW) (GSE Act).
Relevantly, s 47 of the GSE Act provides as follows:
47 Termination of employment
(1) The head of a Public Service agency may, by instrument in writing, terminate the employment of a Public Service non-executive employee of the agency on any of the following grounds if the employment is ongoing employment—
…
(h) a finding of misconduct has been made against the employee under section 69,
…
misconduct extends to the following—
(a) a contravention of this Act or an instrument made under this Act,
(b) taking action that constitutes a detrimental action offence,
(c) taking detrimental action against another person in circumstances where—
(i) the person taking the detrimental action suspects, believes or is aware, when taking the action, that any person has made, may have made, may make or proposes to make a disclosure about alleged misconduct by an employee of a government sector agency, and
(ii) the suspicion, belief or awareness, whether correct or incorrect, is a contributing factor to the taking of the detrimental action,
(d) a conviction or finding of guilt for a serious offence.
…
4. Under the Act, the head of the Public Service Agency may terminate the employment of a Public Service non-executive employee on any of the grounds set out in Section 47(1) of the Act if the employment is ongoing.
5. At all material times, it was an implied term of the contract of employment between the plaintiff and the defendant that the defendant will comply with the Act regarding any termination of the plaintiff’s employment. It was a further implied term that the defendant would not cause or permit the plaintiff to be exposed to a termination of employment if it knew or ought to have known such exposure was not in conformity with section 47 of the Act (the “implied terms of the contract of employment”)
….
10. In the circumstance, as a result of the Commissioner’s decision:-
(a) The defendant now knew or ought to have known that the defendant had not acted in conformity with the Act in respect of the defendant’s termination of the plaintiff’s employment and that the defendant had breached the implied terms of the contract of employment; and
(b) The defendant, in breach of the implied terms of the contract of employment, has failed to take any or all reasonable steps and measure to ensure the reinstatement and re-employment of the plaintiff as a Sheriff’s Officer.
i. With reference to the specific implied terms relied upon, the material times commenced from the effective (commencement) date of the Government Sector Employment Act 2013 (the “Act”) on 25 June 2013, and continued until the plaintiff’s application for leave to appeal against Commissioner Murphy’s decision was refused by the Full Bench of the Industrial Relations Commission on 25 January 2018.
ii. They were implied into the contract by fact as they were terms necessary and appropriate for matters sought to be effected in the Government Sector as set out in Clause 4 Objects of the Act and would be understood by the parties as applicable. They were implied by law by reason of statute, namely the Act, which inter alia prescribed legal obligations upon or affected the parties.
… Compliance with the Act meant that Section 47 of the Act necessitated the employer to reinstate or reemploy the plaintiff effective on the decision of Commissioner Murphy as the termination, in effect, wasn’t in accordance with Section 47 of the Act. The jurisdiction of the Industrial Commission did not extend to an order for reemployment or reinstatement if it was impracticable. The Industrial Commission had no power to order reinstatement or reemployment based on a breach of section 47 of the Act.
That was the state of the applicant’s claims in respect of implied terms at the time of Paulson (No 1), when the primary judge found at [27] that there was “no basis in conformity with authority which would cause the terms to be implied into the [applicant’s] contract of employment with the [respondent]”, struck out the statement of claim and gave leave to the applicant to replead his cause of action.
When the applicant eventually advanced his proposed amended statement of claim, as considered in Paulson (No 3), he had amended his claims in respect of implied terms only in minor and inconsequential ways. Paragraph 5 was in the same terms as it had been in the statement of claim of 22 December 2022, and was supported by particulars which merely repeated the submissions that had been made and rejected by the primary judge in Paulson (No 1). Paragraph 10 of the proposed amended statement of claim read (with amendments underlined):
10. In the circumstance, upon and as a result of the Commissioner’s decision:-
(a) The defendant now knew or ought to have known that the defendant had not acted in conformity with the Act in respect of the defendant’s termination of the plaintiff’s employment and that the defendant was now in breach of the implied terms of the contract of employment; and
(b) The defendant, in breach of the implied terms of the contract of employment, has failed to take any or all reasonable steps and measure to ensure the reinstatement and re-employment of the plaintiff as a Sheriff’s Officer or other relevant capacity following upon the decision of Commissioner Murphy referred to in paragraph 9 above.
In Paulson (No 3) the primary judge concluded that the claims embodied in paragraph 5 of the proposed amended statement of claim must be rejected for the same reasons as her Honour had given in Paulson (No 1). The slight variation in paragraph 10 was also found to be insufficient to change the result in respect of the unsustainability of the implied terms alleged by the applicant.
In none of the multiple outlines of written submissions filed for the applicant (being those which were included in the White Book, as well as those filed 4 April 2025, his further submissions dated 21 May 2025 and his submissions in reply filed 22 July 2025) does the applicant identify any error of principle in the primary judge’s reasons for rejecting the asserted implied terms. Rather, those submissions substantially reiterate the scant submissions made below on the applicant’s behalf, which were properly rejected by her Honour, first in Paulson (No 1) and again in Paulson (No 3) when the applicant did little more than repeat the assertions that had already been rejected two years earlier.
Moreover, we discern no error of law or fact, let alone an error involving an issue of principle, which would warrant a grant of leave to appeal on this ground.
The draft second ground of appeal challenges the primary judge’s conclusion that the applicant’s claim is statute barred. The applicant contends that the alleged implied terms survived the termination of his contract of employment as well as the limitation period. In his written submissions dated 21 May 2025, the applicant contends that, notwithstanding that his employment was terminated on 20 October 2014, “the right of the Applicant to be re-employed and the duty of the Department to re-employ him only commenced to run upon a conclusion by the Industrial Relations Commission on 7 July 2017 that the Applicant had been unfairly dismissed”. This is the same argument which was rejected by the primary judge for reasons which are summarised at [10] above and with which we agree.
We also agree with the submission of the respondent that there is no substance in the applicant’s argument that the implied terms that he alleges survive the termination of the contract in the sense that any cause of action for breach of those terms only arose at some later time. The implied terms alleged by the applicant are terms that conditioned the termination of the agreement. If these terms were implied, and were breached, the applicant’s cause of action accrued at the time of the purported termination.
The applicant has not attempted in his various submissions to identify any error of fact or law in the primary judge’s analysis and determination of this issue. Nor is there any issue of principle or question of general public importance which arises. Furthermore, the second draft ground of appeal only has utility if leave is granted in respect of either draft ground 1 or draft ground 3 and that requirement is not satisfied here.
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Paulson
State of New South Wales [2025] NSWCA 181
(1977) 180 CLR 266
(2022) 108 NSWLR 342
(1992) 30 NSWLR 1
The summons filed 21 August 2024 seeking leave to appeal was dismissed. The applicant was ordered to pay the respondent's costs ([46] and the orders).
A copy of the proposed amended statement of claim was annexed to Mr Capsanis’ affidavit below, which he claimed addressed the flaws identified by the respondent in Paulson (No 1). The amended statement of claim contained 11 particulars which the primary judge found merely repeated the applicant’s submissions and were rejected for the same reasons set out in Paulson (No 1).
The primary judge also observed that the proposed amended statement of claim was not the final iteration because the applicant proposed to add an additional pleading. He proposed to add words to the effect that the respondent was under “an implied legal duty” to employ him following the determination by the Commission in 2017. Her Honour said that, even if allowed, the further amendment could not provide a remedy in the proposed terms, as the contract had been terminated prior to the Commission’s decision and had “no work to do once the contract was at an end” (at [13]).
It is desirable to reproduce paragraphs [15] and [16] of the primary judge’s reasons dated 21 May 2024 which explain why an extension of time to file a proposed amended statement of claim was refused:
Draft ground 3 challenges the primary judge’s rejection of the applicant’s claim that he was owed an implied legal duty, independently of any implied contractual term, to employ the applicant following the decision of Commissioner Murphy of 7 July 2017.
This aspect of the applicant’s claim did not feature in the proposed amended statement of claim considered in Paulson (No 3)**. This was rather the product of what was effectively an addendum to that proposed amendment, which arose when the applicant recorded in his submissions to the primary judge that his proposed amended statement of claim should also be understood as including a pleading “to the effect that the respondent was also subject to an implied legal duty independently of any implied or express contractual term to employ the applicant following upon the decision of Commissioner Murphy delivered on 7 July 2017”. That was apparently the full extent of the articulation of this new claim, which had not featured in the statement of claim struck out in Paulson (No 1)**.
The primary judge reasoned in Paulson (No 3) that allowing an extension of time and a grant of leave to allow this claim to be advanced would be futile. Her Honour explained at [13] that the asserted implied duty “cannot provide a remedy to the Plaintiff because by the time the Commissioner delivered his decision the contract of employment between the Plaintiff and the Defendant had been terminated and any suggested imputation of a term, even if appropriate, would have no work to do once the contract was at an end”.
This passage suggests that her Honour may have been treating the applicant’s argument as depending upon a term being implied into his contract of employment. If so, we would respectfully disagree with her Honour’s approach. While the explanation of this obscure new part of the applicant’s claim before her Honour was sparse, as it is before us, it appears that the applicant was not making an argument that involved an implied contractual term. If that is right, then the argument need not logically depend upon a contract still having been on foot at the time of the decision of Commissioner Murphy.
But as a matter of substance her Honour was undoubtedly correct in concluding that there was no utility in granting leave for this claim to be advanced, and in summarily dismissing the applicant’s proceedings as a consequence. If, as we perceive it, the applicant was in this limb of his proposed amended statement of claim disavowing any case for an implied contractual term, there was no sensible legal basis for any other form of “implied legal duty” being imposed on the respondent to re-employ the applicant. It could not viably be argued that the GSE Act imposed such a legal duty, including through the effect of the decision of Commissioner Murphy. Commissioner Murphy expressly concluded that reinstatement and re-employment of the applicant were impracticable, and the appropriate outcome in lieu of those remedies was an award of compensation. Given that context nothing in the Commissioner’s orders could sensibly be understood as giving rise to a legal duty on the part of the respondent to re-employ the applicant.
We are therefore not persuaded that there is a sufficient basis to grant leave in respect of draft ground 3.