Plaintiff v Defendant

2 The Herald Sun newspaper is published by the Herald and Weekly Times Pty Limited. That company is a subsidiary of the defendant, News Limited. During the period which is relevant to these proceedings, Mr John Hartigan was the chairman, and chief executive officer, of News Limited.

3 In late 2006, the then long standing managing director of the Herald and Weekly Times Limited, Mr Julian Clarke, informed Mr Hartigan that he intended, in the following year, to retire from his position as managing director. Mr Hartigan decided that Mr Clarke should be succeeded in his role by Mr Peter Blunden, who had been the editor-in-chief of the Herald and Weekly Times Pty Limited since May 2001, and the editor of the Herald Sun since 1996. Mr Blunden was to be appointed deputy managing director, with the intention that he would commence his duties as managing director upon the retirement of Mr Clarke in twelve months' time. Accordingly, it was necessary for Mr Hartigan to consider a replacement for Mr Blunden as the editor of the Herald Sun. After consulting with Mr Blunden and Mr Clarke, Mr Hartigan decided to appoint the plaintiff to the position of editor of the Herald Sun newspaper.

4 At that time, the plaintiff was the editor of the Weekend Australian magazine, and the editor-in-chief of Wish magazine. He had a long history of working in print media, commencing as a cadet journalist in 1972, and rising, through the ranks, to positions as the editor of a number of publications from the early 1990s.

5 The first offer of the position of editor to the plaintiff was made by Mr Hartigan in Mr Hartigan's office in Sydney. The plaintiff states that the meeting took place on about 24 November 2006. Mr Hartigan in his evidence thought that the meeting occurred in early December. At that time, the plaintiff was working in Sydney, where he was living with his wife and two school age children. The plaintiff told Mr Hartigan that the decision would be difficult, because of the circumstances of his family.

6 Subsequently, in early December, the plaintiff had a meeting with Mr Clarke, in which they discussed Clarke's views as to the direction, which the plaintiff should take in editing the Herald Sun, if he agreed to accept the position. On 13 December 2006, the defendant formalised its offer to the plaintiff by a letter of appointment, which commenced by offering to the plaintiff the position of "editor-in-chief of the Herald Sun". The parties then entered into a period of negotiation concerning the offer, which, it would appear, was interrupted, not only by the Christmas/New Year break, but also by a trip taken by the plaintiff and his family to Mexico. In any event, the plaintiff responded to that offer by a letter dated 7 January 2007 addressed to Mr Hartigan. In that letter, the plaintiff set out, in some detail, a number of matters relating to the terms of his proposed employment. Shortly after that date, and at least by 18 January (on which date the defendant announced the plaintiff's appointment as editor-in-chief of the Herald Sun), the plaintiff accepted the offer of the defendant. On 25 January 2007, the defendant sent to the plaintiff a "letter of appointment", which was subsequently signed by both parties on 10 March 2007. In the meantime, the plaintiff and his family moved to Melbourne in late January, and the plaintiff commenced his duties as editor-in-chief of the Herald Sun newspaper on 19 February 2007.

7 In March 2007, some differences occurred between the plaintiff and Mr Blunden concerning what the plaintiff perceived as undue interference by Mr Blunden with his duties as editor. Mr Clarke intervened and spoke to them about those issues. As a result, Mr Clarke instituted a series of regular meetings between the plaintiff, Blunden and himself, which commenced in mid 2007, in order to ensure that there was a proper line of communication between the plaintiff and Blunden.

8 In August 2007, Mr Hartigan met the plaintiff, by appointment, for lunch at the Pure South Restaurant at Southbank. In his evidence, Mr Hartigan stated that he arranged the meeting, because he had received a number of reports from Mr Clarke that the plaintiff and Mr Blunden had been unable to form an appropriate professional relationship between them. Mr Hartigan stated that he arranged the meeting for the sole purpose of addressing that issue. On the other hand, the plaintiff, in his evidence, stated that a number of issues were discussed at the meeting, one of which was his relationship with Blunden.

9 On 30 November 2007, Mr Clarke retired as the managing director of the Herald and Weekly Times, but he remained a member of the Board of the company, and he became chairman of it in May 2009. Mr Blunden therefore commenced his duties as managing director on 1 December 2007.

10 On 14 February 2008, an argument developed between the plaintiff and Mr Blunden arising out of the forthcoming trip by the Melbourne Storm rugby league football club to London. At that time, the plaintiff learnt that it was proposed that the Melbourne Storm club was to pay the expenses of a Herald Sun photographer, who was covering the trip to London. After learning of that proposal, a series of emails passed between the plaintiff and Mr Blunden, in the course of which the plaintiff expressed his concern that the proposal might be considered to compromise the perception of the independence of the newspaper. In response, Mr Blunden disagreed. Mr Guthrie sent a further email, stating that the proposal "... sounds like a newspaper equivalent of cash for comment". Mr Blunden replied, by referring to a trip to Dubai which had been taken by the plaintiff, and which had been funded by the National Australia Bank. On the next day, 15 February, Mr Blunden, in two further emails, rebuked the plaintiff for deceiving the readers of the Herald Sun in an article published on that day, which had incorrectly suggested that there had been an increase in its week day sales from Monday to Friday. In fact, the sales of the newspaper had declined by 5,000 copies per day during that period.

11 In August 2008, a further dispute arose between the plaintiff and Blunden, arising out of the announcement by the plaintiff, on 12 August 2008, of four senior appointments in the Herald Sun. One of those appointments was Mr Peter Flaherty as the executive director of the newspaper. At that time, Mr Blunden was in Beijing for the 2008 Olympic Games. A series of emails then passed between the two men, in which Mr Blunden expressed his displeasure to the plaintiff, and claimed that he had not been told about the new executive editor role in advance. The plaintiff then telephoned Mr Hartigan, to discuss the issue raised in the email. He also informed Mr Hartigan that he had been informed, recently, by a "prominent Melburnian" that Blunden had been criticising the plaintiff behind his back. Mr Hartigan advised the plaintiff that he should meet face to face with Mr Blunden upon the latter's return from Beijing. Accordingly, on 19 August 2008 the plaintiff met with Blunden. I shall return later to what occurred at that meeting. However, as a result of it, the plaintiff sent an email to Mr Hartigan, stating that the meeting between himself and Blunden had gone well, and there was no need for Mr Hartigan to become involved.

12 The next event of significance occurred in October 2008. At that time, it was proposed that the Herald Sun would, in a two week period commencing Monday 13 October, provide with each copy of the newspaper sold by it, a National Geographic DVD. The same promotion had been conducted by the Herald Sun in the previous year. At a weekly management meeting held on Thursday 9 October 2008, Mr Blunden criticised the plaintiff for his lack of advance promotion of the National Geographic DVD. There are competing versions as to what was said by the plaintiff in response to that criticism, and I shall return to this topic later. On the following day (Friday 10 October), the newspaper prominently featured a promotion of the National Geographic DVD on its front page. A smaller such promotion was repeated on the following day, Saturday 11 October. The issue, relating to the sufficiency of the advance promotion of the National Geographic DVD, is of some importance in this case, since it was described by Mr Hartigan, in his evidence, as the "tipping point" for the decision which he made, at that time, to terminate the plaintiff's appointment as editor-in-chief of the Herald Sun.

13 As a result of that decision, in the morning of 10 November 2008, the plaintiff was requested to attend Mr Hartigan, who was then present in Melbourne. In their evidence, the plaintiff and Mr Hartigan gave versions of the ensuing conversation which are, for relevant purposes, virtually the same. The meeting commenced with Mr Hartigan telling the plaintiff that they were about to have a conversation which neither of them would enjoy. Mr Hartigan stated that he had decided to terminate the plaintiff's appointment as editor of the Herald Sun. The plaintiff asked the reason for that decision. Mr Hartigan responded that he could not have a situation at the Herald Sun, one of the most important newspapers in the News Limited Group, where the editor-in-chief and the managing director were not getting on. The plaintiff responded that he thought that he and Blunden were getting on, to which Mr Hartigan replied "That's not what Peter Blunden has been telling me, he says he's had to pull you up most weeks about the paper". The plaintiff stated that that was not true, and that he and Blunden were getting on "quite fine". Mr Hartigan, however, stated that the decision had been made. He then proceeded to state that he did not want Mr Guthrie to leave the company, and that he felt that he could find Mr Guthrie work in a magazine division or in the Australian in Sydney. Mr Guthrie said that Sydney was not an acceptable proposition, because he had just purchased a house in Melbourne, he was selling his house in Sydney, and his eldest daughter was entering her final year of school. He told Hartigan that the decision could not have come at a worse time for him. To that Mr Hartigan responded, "I'm sorry, we've given you a real shit sandwich". Hartigan said that the defendant was prepared to be "generous" with the plaintiff, and advised him to speak to Mr Keith Brodie the group human resources director.

14 Subsequently, at 7.00 pm on the same evening, Mr Blunden telephoned the plaintiff, and they spoke about the reasons for his termination. There are competing versions of what was said by Mr Blunden in that conversation, and I shall return to that conversation later in these reasons. On the next day, the plaintiff completed his employment with the defendant. On his termination, he received a "termination package", which amounted to a payment of $844,523 gross. That payment included (inter alia) the plaintiff's remuneration to the date of expiry of his contract (18 February 2010), together with his outstanding leave, and the value of his other contractual entitlements to 18 February 2010.

15 The plaintiff claims that the termination by the defendant of his appointment as editor-in-chief of the Herald Sun was a breach by the defendant of its agreement to employ him in that capacity for three years. Alternatively, the plaintiff claims that in terminating his service, the defendant breached an implied term of trust and confidence between the parties, on the grounds that the termination of his employment by the defendant was capricious, unfair and unreasonable.

16 The plaintiff claims that as a result of either breach of the contract, he has suffered loss and damage, consisting of the value of the lost opportunity of renewing the contract of service which he had with the defendant for a further period of three years. In his statement of claim, the plaintiff valued that lost opportunity in the sum of $2,765,475. In final address, it was submitted that the value of the opportunity was $3,648,105. Alternatively, the plaintiff claims that if there was no chance of renewal of the contract or redeployment by the defendant, he was entitled to an appropriate termination payment by the defendant, consisting of payment in lieu of reasonable notice of twelve months, together with a four week severance termination payment, the sum total of which was claimed in the statement of claim to be $951,222. In final address, the amount claimed, in respect of the termination payment, was put at $1,176,295.

17 In response, the defendant denies that it breached the agreement between itself and the plaintiff, on the ground that, upon a proper construction of the contract of service, the defendant was entitled to terminate the contract before the end of the three year term, by paying the balance owing to the plaintiff under the contract. Secondly, the defendant denies that it breached any implied term of trust and confidence between itself and the plaintiff. In particular, it submits that, to the extent to which such a term may be implied into a contract of employment, the mode of termination of such a contract cannot, as a matter of law, constitute a breach of the implied term. In any event, it is submitted that the defendant did not act capriciously, arbitrarily or unreasonably in terminating the employment of the plaintiff. Finally, the defendant submits that, if it breached the contract between the plaintiff and itself, the plaintiff has not suffered any damage as a consequence. First, it submitted that, as a matter of law, a plaintiff may not, in a claim for wrongful dismissal, claim damages for loss of opportunity or for renewal of his contract of service. Secondly, in any event, it is submitted that, on the facts of the case, there was no prospect of the plaintiff's contract of service being renewed, if, hypothetically, he had remained in employment with the defendant until the expiry of his contract of service in February 2010. The defendant also denied liability for the alternative claim, based on the plaintiff's entitlement to a termination payment, and put in issue the plaintiff's estimate of the quantum of that entitlement.

(1) Did the contract of service between the plaintiff and the defendant entitle the defendant to terminate the plaintiff's employment in November 2008, before the expiration of the three year period of service set by the contract?

(2) If the contract of service did contain a provision entitling the defendant to terminate the plaintiff's contract of service in November 2008 -

(a) was there an implied term of the contract that the defendant would act in good faith in exercising that power under the contract;

(b) if so, did the defendant breach such obligation of good faith in terminating the plaintiff's employment with it?

(3) If the defendant breached the contract of service by terminating the plaintiff's employment in November 2008, is the plaintiff entitled to make a claim for damages, arising from such breach, comprising the loss of opportunity by him, in February 2010, to obtain a renewal of that contract of service?

(4) If the plaintiff is entitled to maintain such a claim for loss and damage, did the plaintiff lose such an opportunity of renewal of his contract of service, by reason of the termination of his employment in November 2008, and, if so, what is the value of that lost chance to the plaintiff?

(5) Alternatively, is the plaintiff entitled to claim the additional payment asserted by him as the alternative basis by which he claims loss and damage?

(6) If the plaintiff is entitled to claim the termination payment, what is the amount of that payment?

The right of the defendant to terminate the plaintiff's employment

19 The first question is whether, under the contract between the defendant and the plaintiff, the defendant had the right to terminate the appointment of the plaintiff unilaterally before the expiration of three years from the commencement of that contract. Mr W Houghton QC, who appeared on behalf of the defendant with Mr R Attiwill, contended that clause 22.2 of the agreement gave the defendant such a right, subject to it paying out to the plaintiff the value of his remuneration entitlements for the balance of the three year term. Thus Mr Houghton submitted that the defendant did not breach its contract of engagement of the plaintiff by unilaterally terminating his employment in November 2008, because it did pay to the plaintiff his remuneration and other entitlements for the balance of the contract term.

20 On the other hand, Mr N O'Bryan SC, who appeared with Mr J McDougall for the plaintiff, submitted that, on its proper construction, clause 22.2 did not entitle the defendant to terminate the plaintiff's employment unilaterally before the expiration of the three year term of the contract, unless the plaintiff had been guilty of serious misconduct, which, by the terms of the agreement, entitled the defendant to terminate the plaintiff's employment without further notice.

21 In light of those competing positions, it is necessary to examine the terms of the contract of employment of the plaintiff by the defendant. As I have already stated, it is common ground that the terms of that agreement are contained in the letter of appointment addressed by the defendant to the plaintiff dated 25 January 2007, which was signed by or on behalf of the parties on 10 March 2007. That letter commenced by offering the plaintiff employment as Editor-in-Chief of the Herald Sun. Clause 1 of the agreement provides that the plaintiff would be employed by News Limited, but if directed by the defendant, he would also perform duties for any of the company's related bodies corporate. It is common ground that throughout his employment by the defendant, the plaintiff performed his duties for the Herald and Weekly Times Pty Limited.

22 The relevant provisions relating to the term of the plaintiff's employment, and relating to the termination of it, are clauses 4 and 22 of the agreement. Clause 4 provided as follows:

The period of your employment in this role will commence on 19 February 2007 and terminate three years after. Continuity of employment in this role and under these terms and conditions will (sic) renegotiate it with you at the end of the 30 months."

23 Clause 22 of the agreement is entitled "Termination of Employment". Clause 22.1 provides that the defendant may terminate the plaintiff's employment at any time, without prior notice, if the plaintiff should commit "any act of serious misconduct". The clause provides seven specific examples of such misconduct. They include: any refusal to perform the plaintiff's duties in accordance with the managing director's reasonable direction; any act which in the reasonable opinion of the defendant is likely to cause significant damage to the company's reputation; any breach by the plaintiff of his obligation of good faith specified in clause 3 of the agreement; and any other act of serious or wilful misconduct. I interpolate that the defendant does not, in this case, seek to justify the summary determination by it of the plaintiff's employment in November 2008 on the basis of any "serious misconduct" under clause 22.1.

24 Clauses 22.2 to 22.4 are particularly relevant to this case, and provide as follows:

(a) Should the Company terminate your employment, the Company will pay to you the balance owing to you under this contract.

(b) If you do not complete the full term of your contract, the Company can require you to forfeit your remuneration for the unexpired period of the contract.

On termination of your employment for any reason whatsoever, you will be entitled to receive from the Company:

(a) The Remuneration payable up to and including the date of termination;

(b) Payment in lieu of any accrued annual leave to which you are entitled as at the date of termination;

(c) Payment in lieu of any long service leave to which you are entitled as at the date of termination; and

(d) Any other remuneration or payment expressly required under this agreement or by law.

To the extent permitted by law, the Company will be entitled to offset any amount owing and payable by you to the company at the date of termination against any amount then payable to you by the Company.

In the event that your contract is not renewed, the Company may redeploy you to any other comparable position which is available within the company or the group. However, if the Company is unable to obtain for you offer of a comparable position, the Company will terminate your employment.

In these circumstances, in addition to your entitlements under clause 22.3, you will receive a termination payment which is inclusive of notice and redundancy/severance pay. In determining an appropriate termination payment, the Company will take into account any applicable legislative requirements and your length of service with the Company.

If the Company obtains an offer of a comparable position for you and you do not accept the offer, you will only receive the payments due to you under clause 22.3."

25 Mr Houghton submitted that under clause 22.2(a) the defendant had the right to terminate the employment of the plaintiff, subject to the defendant paying to the plaintiff the balance of the amount he would have earned for the whole of the three year term of the contract. In other words, he submitted, clause 22.2(a) provided to the defendant the right to terminate the contract short of three years, but "at a price", namely, the payment to the plaintiff of the whole of his remuneration and entitlements for that period. Mr Houghton submitted that clause 22.2 operates independently of clause 22.1, and is not confined to operating only in the circumstances of a termination by the defendant of the plaintiff's employment under clause 22.1 for serious misconduct. He further submitted that clause 22.2(a) is the counterpart of clause 22.2(b) which provided a corresponding right to the plaintiff to unilaterally terminate the contract of employment. Mr Houghton submitted that, in that sense, the words "the balance owing to you under this contract" in clause 22.2(a) was not restricted to the payment by the defendant of the amounts owing to the plaintiff at the time of termination, but, rather, required the defendant to pay out the whole of the plaintiff's entitlements for the balance of the contract period.

26 In response, Mr O'Bryan submitted that clause 4 of the agreement, unequivocally, provided for the contract of employment to subsist for a period of three years from 19 February 2007. Clause 22.2 does not expressly contain any right for either party to terminate the contract before that date. He submitted that the implication of any such right, in clause 22.2, would be contrary to the express language of clause 4.

27 In my view, the meaning of clause 4 and clause 22.2 is clear and unambiguous. Clause 4 of the agreement provides, expressly, that the contract shall be for a period of three years. Indeed, the second sentence contained in clause 4 demonstrates that the parties, in an objective sense, contemplated the extension of the contract beyond that date. Clause 22.2 does not contain any express provision which derogates, in any relevant respect, from the fixed term set by clause 4 of the agreement. While it is premised on a termination by either party of the agreement, nevertheless it does not provide, of itself, for any such lawful termination of it, before the completion of the three year term. In that sense, in my view, and in its plain terms, clause 22.2 does not derogate from the plain provision of clause 4, which provides that the contract shall be for a period of three years. Rather, it makes express provision for the liabilities and rights of each party should the plaintiff's employment, for some reason, be terminated before the expiration of three years. The defendant's submission is based on the implication, in clause 22.2, of a right of either party to terminate the agreement during the three year period. Such an implied term would be directly inconsistent with clause 4. It is neither necessary, nor so obvious, as to justify the construction of clause 22.2 as containing it.[1] The construction of clause 22.2 in such a way is not justified, and is contrary to the plain terms of the agreement.

28 In support of his contentions, Mr Houghton relied, to some extent, on the negotiations which preceded the agreement to the terms contained in the letter of appointment. In particular, Mr Houghton relied on evidence of Mr Hartigan, which was to the effect that, in those negotiations, Mr Guthrie had expressed concerns about the willingness of his family to move from Sydney to Melbourne. He told Mr Hartigan that if the contract was expressed to be limited to a period of three years, then he could use such a contract as the means of persuading his wife to move, on the assurance that his term of employment in Melbourne would be of a limited term only.

29 The evidence relied upon by Mr Houghton, is of no assistance for three reasons. First, Mr Houghton seeks to rely upon the evidence of Mr Hartigan to demonstrate the actual intentions of Mr Guthrie, and Mr Hartigan, in inserting the three year term in the contract of appointment. It is clear from the authorities that that evidence is not admissible for that purpose, and may not be used in the manner contended for by Mr Houghton.

30 It is well established that, while the evidence of antecedent negotiations may, in the case of an ambiguous term, be relevant to establish the objective background facts known to both parties, it is not received as evidence of the actual intentions and expectations of the contracting parties. The reason for that principle was stated by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales[2]:

"The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, although admissible in an action for rectification."

31 Secondly, I do not accept the evidence given by Mr Hartigan in this respect. In my view, Mr Hartigan was an unreliable witness in respect of the negotiations which preceded the formation of the contract. For example, he professed to have a clear memory of long and protracted negotiations before the contract was executed. In cross-examination, after being shown contemporary documents, he accepted that agreement was reached between the parties as to the terms of the contract before 18 January, and probably by 11 January. The period of the negotiations, and indeed the nature of the negotiations revealed by the evidence, do not support Mr Hartigan's evidence at all in this regard.

32 In this respect, and, as I shall later demonstrate, in other respects, Mr Hartigan's evidence was very much affected by the events which ultimately transpired under the contract. While I do not consider that he made a conscious effort to mislead the Court, his recollection of a number of events, including the negotiations, was affected by the fact that the termination of the plaintiff's contract has given rise to what has been clearly a hard fought litigation between the parties.

33 Another instance of such a phenomenon in Mr Hartigan's evidence is constituted by his testimony, in evidence in chief, to the effect that Mr Guthrie insisted on being given the title of "editor-in-chief" of the Herald Sun, in circumstances in which that particular title did not exist hitherto. It was that circumstance which, he maintained, was the subject of the long and protracted negotiations between the parties. However, the objective facts, established by the documents, contradict that assertion by Mr Hartigan. As I have already stated, the first letter of offer made by the defendant to the plaintiff (on 13 December 2006) offered to the plaintiff the position of "editor-in-chief" of the Herald Sun newspaper. Mr Hartigan's evidence was that he first approached Mr Guthrie about the appointment in early to mid December. On no view could the formal title of the role, to be offered to Mr Guthrie, have been the subject of long and protracted negotiations. In this respect, I also note that the substance of Mr Hartigan's evidence on this aspect was not put in cross-examination to Mr Guthrie, notwithstanding that Mr Houghton was particularly conscientious, in cross-examination, to ensure that he complied with the rule in Browne v Dunn.[3]

34 Thirdly, and in any event, if I had accepted the evidence of Mr Hartigan on this aspect, and if it were admissible for the purposes of construing the contract, I do not consider that it has the effect contended for by Mr Houghton. If in fact Mr Guthrie had requested a three year term in order to placate his wife, that evidence would not, in any event, reveal any underlying intention by the parties that, notwithstanding the express provisions of clause 4 of the contract, either party could terminate the plaintiff's employment during that three year period. If I had accepted Mr Hartigan's evidence on this aspect, and if it were admissible for the purposes of construing the agreement, it would have demonstrated, at most, that Mr Guthrie wished to secure a finite period of employment for himself in Melbourne, as distinct from an indeterminate one. In that sense, the evidence of Mr Hartigan would, if anything, support the construction of the contract contended for by the plaintiff, and which I have accepted.

35 For those reasons, the evidence given by Mr Hartigan as to the reason why Mr Guthrie sought that the contract be expressed to be for a period of three years, does not affect the proper construction of clause 4 and clause 22. I do not accept his evidence on this point. Further, as I have stated, the evidence of Mr Hartigan is not admissible in any event to assist in the construction of the agreement.

36 In my view, the objective background circumstances, established by the evidence, lend support to the construction of the agreement contended for by Mr O'Bryan. When Mr Hartigan offered the position of editor-in-chief of the Herald Sun to the plaintiff, the latter was living in Sydney with his family. His daughter was about to enter the later years of her secondary education. The move by the plaintiff and his family to Melbourne was a significant step in their personal and professional lives. It is understandable, in those circumstances, that the inclusion of a provision, such as clause 4, in the agreement, would have been of some importance to Mr Guthrie. Further, as I stated, the second sentence of clause 4 provides some evidence of an expectation by the parties that the appointment of the plaintiff might extend beyond the period of three years set by the agreement. Mr Blunden and Mr Clarke both enthusiastically supported, to Mr Hartigan, the proposal that Mr Guthrie be appointed to the position of editor-in-chief. The provisions of the contract, particularly relating to reimbursement by the defendant of his expenses of moving from Sydney to Melbourne, were generous. All those circumstances support the proposition that clause 4 of the agreement was intended to provide some certainty of tenure to Mr Guthrie of the position of editor-in-chief of the Herald Sun newspaper.

37 For those reasons, I reject the first submission made on behalf of the defendant, namely, that clause 22.2 of the agreement provided to the defendant the right to unilaterally terminate the contract, subject to it paying to the plaintiff the balance of his entitlements for the contract period.

38 In those circumstances, it follows that the defendant breached the contract between the plaintiff and itself, by unilaterally terminating the plaintiff's appointment as editor-in-chief of the Herald Sun on 10 November 2008. That breach constituted a repudiation by the defendant of the agreement, which was accepted by the plaintiff by a letter from the plaintiff's solicitor to Mr Hartigan dated 3 December 2008.

Does clause 22.3 preclude the plaintiff's claim for damages?

39 The question which then arises is whether the provisions of the contract, and particularly clause 22.3, operate to exclude the claim by the plaintiff for the primary category of damage claimed by him, namely, a loss of an opportunity to be re-employed by the defendant on the conclusion of the three year contract term.

40 In this connection, Mr O'Bryan, in opening the case, submitted that the plaintiff's claim for those damages is encompassed within the expression "... or payment expressly required under this agreement or by law" in clause 22.3(d) of the contract of employment. In particular, he submitted that a claim for unliquidated damages, such as loss of opportunity, is embraced by the part of that phrase which relates to a "payment ... required ... by law". On the other hand, Mr Houghton submitted that those words do not include a claim for damages for wrongful dismissal. Mr Houghton submitted that if I were to conclude (as I have) that the defendant breached the terms of the agreement by terminating the contract on 10 November 2008, clause 22.2(a) and clause 22.3 exclusively provided for the entitlements to be paid by the defendant to the plaintiff in such an event. Thus, he submitted that the parties had agreed that, apart from the entitlements referred to in those clauses, the plaintiff would not be entitled to claim damages for wrongful dismissal. Mr Houghton supported his submissions by referring to the decision of Robson J in G T Corporation Pty Ltd v Amare Safety Pty Ltd.[4] In that case, Robson J held that a provision in a contract of employment, which is similar to clause 22.3, was intended to be exhaustive as to the damages which the employer defendant was obliged to pay to the employee if it terminated the agreement.

41 The construction of clause 22.2 and clause 22.3 is not without some difficulty in this respect. As I have already indicated, it is common ground between the parties that the phrase "the balance owing to you under this contract", in clause 22.2(a), required the defendant, on early termination, to pay to the plaintiff the balance of all the entitlements which he would have earned throughout the balance of the contract term. Pausing there, I have some reservations about that proposition, since it involves an unusual construction of the phrase "balance owing". However, accepting that the parties are at one about that construction of clause 22.2(a), two questions of construction arise in relation to clause 22.3, namely, whether that clause is the exclusive repository of the plaintiff's rights upon wrongful termination of the contract by the defendant, and, if so, whether clause 22.3(d) covers a claim for damages of the type made by the plaintiff in this case.

42 The starting point for both questions is that, in the absence of a contractual provision to the contrary, the plaintiff would, at common law, have a right to claim unliquidated damages for wrongful termination of his contract by the defendant before the expiry of his term on 19 February 2010. Clause 22.3 does not expressly purport to exclude the plaintiff's right to claim such damages. Nor was it expressed to be the sole and exclusive source of the rights of the plaintiff upon termination of his employment. The plaintiff's right to claim damages for wrongful termination of his employment, before the expiration of the three year period, was a valuable right. In my view, there is no basis for construing clause 22.3 as excluding his rights to claim damages for wrongful repudiation by the defendant of the contract of his employment. Ordinarily, it is presumed that, in the absence of clear language, a contracting party does not intend to abandon its remedies for breach of contract arising by operation of law.[5] Accordingly, I do not consider that, on its proper construction, clause 22.3 did exclude the plaintiff's rights to claim damages of the kind claimed by him in this case.

43 That conclusion is supported by the background circumstances to the contract, in which the plaintiff and his family were being required to move from their home in Sydney to Melbourne so the plaintiff could undertake his employment with the defendant. In those circumstances, it is unlikely that the parties, objectively, would have intended to have precluded the plaintiff from exercising his rights at common law to claim damages. For those reasons, the plaintiff is entitled to claim damages, of a kind sought by him in this case, for the wrongful breach by the defendant of his contract of employment on 10 November 2008.

44 Further, in my view, the decision of Robson J in GT Corporation Pty Ltd v Amare Safety Pty Ltd, to which Mr Houghton referred, may be distinguished. The relevant clause in that case was entitled to a "compensation for termination". It expressly prescribed what amount would be paid by the principal (the defendant) by way of "compensation" should it terminate the contract of engagement of the plaintiff. By contrast, clause 22.3 does not purport to describe what "compensation" shall be payable by the defendant to the plaintiff upon termination of the plaintiff's employment; rather, it prescribes the entitlements of the plaintiff in such a position. As I stated, it does not, expressly or by necessary implication, exclude any residual rights of the plaintiff to damages arising from wrongful termination by the defendant of the agreement.

45 The conclusions, which I have reached so far, do not require me to consider the alternative claim made by the plaintiff, namely, a claim by him for breach of an implied term of the utmost good faith and trust in the contract of employment. That alternative claim was the subject of competing submissions by the parties, and accordingly, in deference to those submissions, I shall return to it later. However, it is convenient to deal first with the plaintiff's claim for damages arising from the wrongful termination by the defendant of his employment on 10 November 2008.

46 The primary category of damages claimed by the plaintiff consists of damages for loss of opportunity to obtain a renewal of his contract with the defendant upon its expiration on 18 February 2010. As I have already stated, the defendant has resisted that claim on two bases. First, Mr Houghton submitted that, as a matter of law, damages for loss of opportunity to renew a contract of employment are not recoverable in an action by an employee for the wrongful termination by the employer of the contract. Secondly, and in any event, Mr Houghton submitted that, on the evidence in this case, the plaintiff had failed to establish that he had any chance of obtaining a renewal of his contract of employment upon its expiration in February 2010.

47 The first issue raised by Mr Houghton concerns the question whether an employee may, in an action for wrongful dismissal, claim damages consisting of loss of opportunity to renew the contract of employment upon its expiration. That question has been the subject of conflicting decisions. On the one hand, decisions of the Federal Court support the proposition that such damages may be recovered by an employee in an action for wrongful dismissal. On the other hand, there are two decisions of the Court of Appeal of New South Wales which support the contrary proposition.

48 The first decision was that of the New South Wales Court of Appeal in New South Wales Cancer Council v Sarfaty[6]. In that case, the plaintiff succeeded, at first instance, in a claim for damages for wrongful dismissal. However, the trial judge did not uphold his claim for lost opportunity to renew the contract of employment upon its expiration. The Court of Appeal, by a majority, dismissed the defendant's appeal on the question of liability, and allowed the defendant's appeal, in part, on the question of damages. It also dismissed the plaintiff's cross-appeal, one component of which concerned the rejection by the trial judge of his claim for loss of opportunity to renew his contract. The joint judgment of Gleeson CJ and Handley JA is principally concerned with the issues raised by the defendant's appeal on the question of liability. Their Honours dealt with the cross-appeal, in relation to the claim by the plaintiff for damages for loss of opportunity, in two short paragraphs at the conclusion of their judgment. In that passage, Gleeson CJ and Handley JA observed that, by the terms of his contract, the plaintiff did not have any right of further appointment after the expiration of the term prescribed in the contract. They stated that the "relevant principle" was that referred to by Mason CJ and Dawson J, in their joint judgment in The Commonwealth v Amann Aviation Pty Ltd[7], namely:

"Where there are two or more ways in which a defendant might perform the contract, the Court, in assessing damages, adopts the mode of performance which is most beneficial to the defendant. That rule, which is a manifestation of the principle that damages will not be awarded for not doing that which there is no legal obligation to do, is well supported by authority."

49 With respect, the principle, so stated by Mason CJ and Dawson J, did not preclude their Honours, in Amann Aviation, from upholding the claim of Amann, a necessary part of which was a claim for loss of opportunity to renew its contract with the Commonwealth. Their Honours recited the principle, which I have quoted above, but distinguished it, on the basis that, in a claim for loss of opportunity, the court is engaged in a hypothetical exercise, in determining how the contract would have turned out, if it had not been brought to an end by the Commonwealth's wrongful repudiation of it.[8] Thus, the passage from their Honour's judgment, relied upon by Gleeson CJ and Handley JA in Sarfaty, did not support the conclusion that an employee may not make a claim for damages for loss of opportunity.

50 The analysis of Sarfaty, to which I have just referred, was adopted by Heerey J in Martin v Tasmanian Development & Resources[9]. For that reason, his Honour did not follow the decision of the Court of Appeal in Sarfaty. On the facts of the case before him, Heerey J held that the plaintiff, whose employment had been wrongfully terminated by the defendant, would have had a "real prospect" of obtaining a renewed contract of employment, if his contract had not been wrongly terminated by the defendant. Accordingly Heerey J awarded the plaintiff damages for his lost opportunity to obtain the renewal of his contract.[10] On appeal, the Full Court of the Federal Court upheld the decision of Heerey J in Tasmanian Development & Resources v Martin[11]. There, Kiefel J (with whom Lee and Cooper JJ agreed) stated:

"In Amann, as his Honour the primary Judge pointed out, Mason CJ and Dawson J (90-92) observed that the rule that a defendant is not liable in damages for not doing that which was not promised, is itself subject to the rule in Hadley v Baxendale [1854] EngR 296; (1854) 9 Exch 341, that a party is entitled to such damages as arise naturally from the breach or as may be supposed to have been in the contemplation of the parties, at the time they made their contract, as the probable result of the breach. If it was shown to have been in their contemplation, the plaintiff would be entitled to compensation. In that case, the prospect of renewal would arise by Amann's performance of the contract. It was a distinct benefit which accrued by reason of its performance. The corollary was that the parties must necessarily have contemplated the loss of that prospect as the probable result of a repudiation or fundamental breach on the part of the Commonwealth."[12]

51 The issue as to the recoverability of damages for loss of opportunity to renew a contract of employment again came before the New South Wales Court of Appeal in Murray Irrigation Limited v Balsdon[13]. In that case, Bryson JA (with whom Handley JA and Ipp JA each agreed) referred to the decisions of Heerey J, and the Full Court of the Federal Court, in Tasmanian Development & Resources v Martin. His Honour concluded:

"In my respectful opinion, the law was correctly stated in New South Wales Cancer Council v Sarfaty, and unless it is shown by evidence that there was some relevant contemplation of the parties relating to renewal of the contracts of employment and to loss of renewal as the probable result of a breach, consideration of prospects of renewal cannot be embarked on in a case of wrongful dismissal; certainly it cannot be taken that renewal was in contemplation in the absence of any demonstration by evidence that in fact it was."[14]

52 A number of observations may be made concerning the foregoing passage from the judgment of Bryson JA. First, the conclusion so expressed by his Honour is based on the decision in Sarfaty which, as I have pointed out, itself is founded on an incorrect construction of the decision of the High Court in Amann. Secondly, Bryson JA did not, it would seem, hold that a claim for lost opportunity to renew a contract of employment is, as a matter of law, not open to an employee who has been wrongfully dismissed. In the passage, which I have quoted, his Honour referred to the need for the plaintiff to establish, "by evidence", that the loss of renewal would be the "probable result" of the breach. That proposition is drawn from the well known passage from the judgment of Alderson B in Hadley v Baxendale[15]. I note that the statement by his Lordship of that rule does not require actual proof of what was in the subjective contemplation of the parties at the time of the contract. Rather, it is necessary to demonstrate that the loss "may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it". Secondly, and importantly, the loss which is claimed in this case is not a loss of a right to renew the contract, or a loss of renewal of the contract; rather, what is claimed is a loss of an opportunity to renew the contract of employment. Thus, on the reasoning applied by Bryson JA in Murray Irrigation, it would be sufficient for the plaintiff to demonstrate circumstances from which it may be reasonably supposed that the parties had in contemplation, at the time they made the contract, a loss by the plaintiff of the opportunity to obtain a renewal of his contract, as a probable result of the breach of it.

53 The modern basis for a claim for damages for loss of opportunity is to be found in the judgment of the High Court in Commonwealth v Amann Aviation Pty Ltd[16]. In that case, Amann entered into a contract with the Commonwealth to conduct aerial coastal surveillance for three years. The Commonwealth served a notice on Amann purporting to terminate the contract. In fact the notice was invalid. Amann treated the notice as a repudiation by the Commonwealth of the contract, and terminated it. After, and as a result of, entering into the contract, Amann had spent $5.2 million in acquiring and fitting out surveillance aeroplanes with which to perform the contract. It also incurred operational expenses totalling $854,000. It was common ground that the resale value of the aeroplanes was only $917,000, because the aircraft had been adapted to a special use for which there was only very limited demand. It was also clear, on the findings of the trial judge, that the prospects of Amann making a profit from the contract depended on it obtaining a renewal of the contract upon the expiration of the initial three year term. Amann claimed damages consisting of the wasted expenditure incurred by it in acquiring and fitting out the aircraft and preparing to perform the contract. That claim was rejected at first instance. On appeal the High Court (McHugh J dissenting) held that Amann was entitled to those damages.

54 There were a number of steps involved in the reasoning of the members of the Court in their separate judgments. For the purposes of the question, with which this case is concerned, those steps can be summarised shortly. The starting point for the majority judgments was the well known principle stated in Robinson v Harman[17], that where a party sustains a loss by reason of a breach of contract, that party is entitled to damages which would place it in the same situation as if the contract had been performed. Based on that principle, it was recognised that, ordinarily, expenditure incurred by a party in preparing to perform a contract, which is wasted by reason of the wrongful repudiation by the other party of that contract, would not be recoverable by the innocent party, unless those expenses would have been recouped by it, if the contract had not been breached.[18] Thus, ordinarily, a plaintiff would need to demonstrate that, if the contract had not been breached, the plaintiff would have derived earnings from the performance by it of the contract, which would have enabled it to recoup the expenses incurred by it in preparing to perform the contract. However, the court also recognised that where, by reason of the wrongful breach of a contract, a plaintiff is unable to prove the amount of damages which it would have earned had the contract not been breached, the plaintiff is, prima facie, entitled to claim the damages for the wasted expenditure incurred by it. With the exception of Toohey J[19], the majority members of the court based that principle on the prima facie assumption that, ordinarily, a party does not incur expenses in preparing for a contract unless it has a legitimate expectation that its earnings from the performance of the contract will enable it to recover those expenses.[20]

55 In that light, it was essential for the plaintiff, in Amann, to establish that it had lost a valuable opportunity to obtain a renewal of the contract, upon its expiration in 1990, because of the wrongful repudiation of it by the Commonwealth. The majority of the High Court held that, as a result of entering into the contract, Amann had obtained a distinct commercial benefit, which it had lost by reason of the wrongful repudiation of the contract by the Commonwealth.[21]

56 It might be argued that, in Amann, the court was not, strictly speaking, determining whether the plaintiff was entitled to make a claim for damages for loss of opportunity to renew the surveillance contract. Rather, it may be contended that the court was concerned to determine whether the plaintiff did have an opportunity to obtain a renewal in 1990, which was of value to it, and which might be brought into the equation in determining whether the defendant could demonstrate that if, it had not breached the contract, the plaintiff would not have recouped the amount expended by it in performing the contract. However, it is clear that, in the passages of the judgment of the High Court, to which I have referred above, the members of the majority concluded that, as a result of the wrongful repudiation of the contract by the Commonwealth, Amann had lost a valuable opportunity to obtain the renewal of the contract in 1990, and that the loss of that opportunity was part of the compensable damages which could be claimed by the plaintiff. In any event, that construction of the reasons of the majority in Amann was confirmed in the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ in Sellars v Adelaide Petroleum NL & Ors[22], where their Honours stated:

"... in the Commonwealth v Amann Aviation, Mason CJ and Dawson J, Brennan J and Deane J concluded that a lost commercial advantage or opportunity was a compensable loss, even though there was a less than fifty percent likelihood that the commercial advantage would be realised. Damages for breach of contract were assessed by reference to the probabilities or possibilities of what would have happened."

57 For those reasons, in my view, the authorities, to which I have referred, support the proposition that an employee may claim damages for loss of opportunity to renew a contract of employment which has been wrongfully terminated by the employer.[23]

58 In light of the foregoing analysis, the right of the plaintiff to succeed in his claim for loss of an opportunity to renew his contract on its expiration in February 2010 depends on two questions, namely:

(1) Whether at the time at which the parties entered into the contract, it may be reasonably supposed to have been in their contemplation that, as the probable result of a breach of that contract by the defendant before its expiration, the plaintiff might suffer a loss of a valuable opportunity to renew or extend his contract with the defendant.

(2) If so, whether the plaintiff, as a result of the breach by the defendant of the contract in November 2008, did in fact lose a valuable opportunity to renew or extend his contract with the defendant.

59 The first issue, to which I have just referred, involves the application of the principle stated by Alderson B in Hadley v Baxendale[24]. It is now accepted that the principles, stated in that celebrated decision, are applied by reference to the information available to the defendant at the time at which the contract was made. In C Czarnikow Ltd v Koufos,[25] Lord Reid stated:

"The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or the loss of that kind should have been within his contemplation."

60 Thus, as I have stated above, the relevant test is applied by determining the information available to the defendant at the time of the making of the contract, and postulating whether the defendant, in light of that knowledge, would have realised that a loss of opportunity to the plaintiff to renew his contract was a likely result of a wrongful termination by it of the contract during its three year term.[26]

61 In my view, it is clear, both from the express terms of the contract dated 25 January 2007, and from the background circumstances, that, at the time at which the parties entered into the contract, the defendant knew that if it wrongfully terminated the plaintiff's appointment before the expiration of the three year term provided in the contract, it would probably thereby deprive the plaintiff of the opportunity to obtain a renewal of the contract upon its expiration.

62 The express terms of the letter of appointment dated 25 January 2007 make it clear that the parties contemplated that there would be negotiations, at the expiration of the three year term, relating to the continuation by the plaintiff in his employment with the defendant as the editor-in-chief of the Herald Sun, or in a comparable capacity. The second sentence of clause 4 specifically provided for renegotiation of the "continuity of the employment" of the plaintiff in his role of editor-in-chief of the Herald Sun six months before the expiration of the three year period of his appointment. It is not necessary for me to determine whether that provision, in the contract, constituted a binding agreement between the parties to enter into such negotiations.[27] The point remains that, by including the second sentence in clause 4 of the contract, the defendant knew and was aware that, at the outset of the term, it was contemplated by the parties that they would enter into genuine negotiation, after 30 months, concerning the continuity of the plaintiff's employment as editor-in- chief of the Herald Sun.

63 Clause 22.4 was included in the contract to make specific provision, should those negotiations not succeed. It provided that if the contract was not renewed, the defendant might redeploy the plaintiff to another comparable position, which is available within the defendant or the News Group. It further provided that if the defendant was unable to obtain an offer of a comparable position, the defendant would terminate the plaintiff's employment. Again, it is not necessary for me to determine whether that part of clause 22.4 obliged the defendant to redeploy the plaintiff in a suitable position if it were available, should the defendant not re-engage the plaintiff as the editor-in-chief of the Herald Sun at the conclusion of three years. The salient point is that, at the outset of the contract, the defendant recognised in the contract that there was a realistic expectation that the plaintiff would remain in his employment, at the expiration of the three year period, either as the editor-in-chief of the Herald Sun, or in a comparable position. In that sense, the provision in clause 4 for negotiations in respect of the renewal of the contract, and the provision in clause 22.4 for the possible redeployment of the plaintiff in a comparable position, recognised that, at the conclusion of the three year period, the plaintiff might have an opportunity for re-employment by the defendant in the same role, or in a comparable role.

64 It is clear from the evidence that the position of the editor-in-chief of the Herald Sun, to which the plaintiff was appointed, was considered by the defendant to be an important position within its organisation. According to the evidence, at that time the Herald Sun had the largest daily circulation of any newspaper in Australia. The defendant was keen to appoint the plaintiff to that position. His appointment was enthusiastically supported to Mr Hartigan by both Mr Blunden and Mr Clarke. The plaintiff, at that time, had an impressive curriculum vitae, and, as I have already noted, his career path had taken him through the ranks of journalism, rising to the level of editor of significant publications from the early 1990s. The generous relocation package provided for in the agreement of January 2007 indicates the high value which the defendant then placed on acquiring the services of the plaintiff as the editor-in-chief of the Herald Sun. The previous incumbent, Mr Blunden, had occupied that role for more than a decade. The defendant was also aware that, by moving his family and home to Melbourne, the plaintiff was requiring his family to undergo significant dislocation of their lives.

65 Those background circumstances give force to the conclusion that the parts of clause 4 and clause 22.4 of the agreement, to which I have just referred, constituted a contractual recognition by the defendant that the plaintiff would have the opportunity to treat with the defendant, at the conclusion of the first three year term, for an extension of his term of office as editor-in-chief of the Herald Sun, or, at the least, for a comparable position of employment with the defendant. Given the nature of the role of editor-in-chief, and the long tenure of the previous occupant of that position, in my view the defendant would have been well aware, in January 2007, that, by securing his appointment as editor-in-chief of the Herald Sun in January 2007, the plaintiff, at the expiration of that time, would have been well placed, at the least, to be given favourable consideration for an extension of his term of office, or, otherwise, for re-employment in a comparable position by the defendant. In those circumstances, in my view, it is clear that the defendant was well aware that, by engaging the plaintiff as editor-in-chief of the Herald Sun, the defendant enabled the plaintiff to derive a significant commercial advantage constituted by the prospect of his re-appointment in that position, or a comparable position, at the expiration of the first three year term. It follows that it would have been in the reasonable contemplation of the defendant, at the time of the contract, that if it wrongfully terminated the plaintiff's appointment to that position during the three year period provided for in the contract, the plaintiff would be likely to suffer a loss of his opportunity to secure re-appointment to that position, at the end of the three year term.

Did the plaintiff lose an opportunity for re-employment?

66 That conclusion brings me to the next question, namely, whether, at the time at which the plaintiff's contract of employment with the defendant was terminated in November 2008, the plaintiff in fact did lose an opportunity, of some value, to obtain re-appointment as editor-in-chief of the Herald Sun in February 2010, or redeployment by the defendant in another comparable position. Mr Houghton submitted on behalf of the defendant that if the plaintiff's appointment had not been terminated in November 2008, there would have been no prospect of him gaining a renewal or extension of his contract in February 2010. Mr Houghton submitted that, as a result of the circumstances which had led to the termination of the plaintiff's appointment in November 2008, his prospects of renewal of the contract, in February 2010, would have been "zero", if, hypothetically, the defendant had not terminated his contract in November 2008. In support of that proposition, Mr Houghton relied on evidence given by Mr Hartigan to that effect, namely, that he would not have renewed the plaintiff's contract when it came up for renewal in February 2010. That evidence was supported by the testimony of Mr Clarke and Mr Blunden, each of whom stated that, if the plaintiff had remained as the editor-in-chief of the Herald Sun until February 2010, they would have strenuously advocated to Hartigan that he not renew the plaintiff's contract.

67 In response, Mr O'Bryan submitted that if the defendant had not terminated the plaintiff's appointment in November 2008, the plaintiff would have had a realistic prospect of obtaining a renewal of his contract on its expiration in February 2010. In particular, he submitted that if the plaintiff had remained as the editor-in-chief of the Herald Sun until February 2010, he would, at the least, have had a reasonable prospect of being redeployed in another capacity with the defendant, if, at that time, the defendant was of a mind not to reappoint him as editor-in-chief of the Herald Sun.

68 The different positions taken by the parties on this issue focused on the reason why Mr Hartigan decided, in November 2008 to terminate the plaintiff's employment as editor-in-chief of the Herald Sun. In effect, it was argued on behalf of the plaintiff that, when Mr Hartigan's evidence is properly analysed, it can be seen that the sole or predominant reason for the plaintiff's dismissal at that time was because he concluded that there had then been a breakdown in the relationship between the plaintiff as the editor-in-chief of the newspaper and Mr Blunden as the managing director of the Herald and Weekly Times. As a result of the perception by Hartigan that there had been such a breakdown in the relationship between the two men, he considered, then, that the only means of resolving the problem was to remove the plaintiff from his position as the editor-in-chief of the Herald Sun. However, it was submitted, the evidence discloses that Mr Hartigan was not averse to retaining the plaintiff in a comparable position as an employee of the defendant, and thus, at the least, the evidence reveals that, if the appointment had not been terminated in November 2008, there was a realistic opportunity that he might have been redeployed in a comparable position on the completion of the initial term of his contract with the defendant.

69 On the other hand, Mr Houghton submitted that, on the evidence, I should accept that Mr Hartigan's disaffection with the plaintiff was based on wider grounds, so that, if the plaintiff's appointment had not been terminated in November 2008, Mr Hartigan would definitely not have re-engaged him at all in February 2010. Further, Mr Houghton submitted that, if, in any event, Mr Hartigan had offered to the plaintiff an alternative position in February 2010, there is no evidence that the plaintiff would, or might, have accepted such a position.

70 The competing positions between the parties were the subject of most of the evidence which was adduced in the trial. The plaintiff was the sole witness called for his case. On behalf of the defendant, Mr Hartigan, Mr Clarke and Mr Blunden each gave evidence. There were a number of issues, on which the evidence of the plaintiff on the one hand, and the defendant's witnesses on the other, conflicted. In order to determine the central issue raised by the evidence, it will be necessary for me to resolve a number of those conflicts.

71 The evidence adduced by each side did, in part, deal with the question of how it was perceived that the plaintiff was performing his role as the editor-in-chief of the Herald Sun, and with the question as to how it was perceived the Herald Sun was faring under the editorship of the plaintiff. On the one hand, Mr Guthrie's evidence was that he was acquitting himself well as the editor-in-chief of the Herald Sun, and that the newspaper was doing very well. On the other hand, evidence was given by Mr Hartigan, Mr Clarke and Mr Blunden as to their perception of the performance of the plaintiff, and of the newspaper, during the period of the plaintiff's tenure of office as editor-in-chief. In determining the critical issue, which I have defined above, it is important to bear in mind that the evidence as to the perceived performance of both the plaintiff and the Herald Sun, during the relevant period, was not led in order to prove whether or not the plaintiff was a competent and successful editor, or to prove whether or not, during his term of office, the Herald Sun was succeeding or failing under the plaintiff's leadership of it. Neither of those questions were in issue in the case. The defendant did not seek to justify the dismissal of the plaintiff on the basis that he was deficient in his capabilities and performance, nor was it sought to justify his dismissal on the basis that, while he was the editor-in-chief, the Herald Sun was deteriorating in its quality and in its performance. The evidence relating to the various witnesses' perceptions as to those two matters was not led to enable me to make an assessment as to either of those issues, and it was not the subject of any submission by either party to that effect.

72 Rather, that evidence was adduced as being relevant to the state of mind of Mr Hartigan in particular, and also the state of mind of Mr Blunden and Mr Clarke, about the capabilities and performance of the plaintiff, and the performance of the Herald Sun, by November 2008. That is, that evidence was led solely to establish that, by that date, Messrs Hartigan, Clarke and Blunden had reached the state of mind that, to their perception, the performance of both the plaintiff and the Herald Sun, during the plaintiff's tenure of office, was such that it was untenable for him to continue as the editor-in-chief of the newspaper. Thus, the issue, which I must determine, concerns the actual perception by Mr Hartigan, and indeed also by Mr Blunden and Mr Clarke, of Mr Guthrie, during that time. In reaching any conclusions about that matter, I do not express any conclusion, or make any finding, about the capabilities or performance of Mr Guthrie during the time of his editorship of the Herald Sun, or about the performance or quality of the newspaper during that period.

73 The evidence of each of the four witnesses was subjected to critical testing and cross-examination, and to detailed analysis in final address. Each party raised issues of credit and reliability as to the witnesses called by the other side. In particular, in final address, Mr Houghton attacked the credibility of Mr Guthrie, and, in turn, Mr O'Bryan strongly criticised the credibility, in particular, of Mr Blunden and Mr Hartigan.

74 I turn, then, to the evidence given by the witnesses on the issue in question.

75 As I have stated, the only witness to give evidence for the plaintiff was Mr Guthrie himself. He commenced by giving evidence as to his background, and as to the initial approach to him by Mr Hartigan on 24 November 2006, in which Hartigan offered to him the position of the editor-in-chief of the Herald Sun. Mr Hartigan told the plaintiff that he had discussed the matter with Mr Clarke and Mr Blunden, who had each advised that the plaintiff would be a first rate candidate for the job. The plaintiff stated that the main difficulty confronting him was his family position, and in particular the fact that his two children were in their secondary education levels at school. Two days later, the plaintiff met with Mr Julian Clarke, who was then the managing director of the Herald and Weekly Times Limited. Mr Clarke told the plaintiff that he considered that the plaintiff was an ideal candidate for the position, because of his background in newspapers and magazines. He told the plaintiff that he did not wish the newspaper to continue in the same direction as it had under Mr Blunden, but rather that it should become a "more intelligent" paper. In particular, Mr Clarke stated that he felt that the opinion pages were not "intelligent" enough. Mr Guthrie expressed the view that he felt that the most serious pages of the newspaper - the opinion pages - should not have followed immediately after the least serious pages (the confidential gossip column). Guthrie and Clarke both agreed that the principal "drivers" of the Herald Sun circulations had been news and sport.

76 Approximately two weeks later, Mr Guthrie came to Melbourne and spoke to Mr Blunden in his Melbourne office. Blunden told Guthrie that the nomination of Guthrie as editor-in-chief was his idea. Mr Blunden stated that he had been asked to prepare a list of names, and the list which he provided to Mr Hartigan had Mr Guthrie's name at the top of it.

77 The plaintiff stated that subsequently he wrote the letter dated 7 January 2007 to Mr Hartigan, setting out the terms on which he would accept the appointment of editor-in-chief. At that time, the plaintiff was on holidays in Mexico with his family. By the time he returned from holidays on 20 January, he had accepted the position of editor-in-chief, and it had been announced at a press conference. The defendant had published a press release to that effect on 18 January. On his return from holidays, the plaintiff had a further meeting with Mr Hartigan. In his evidence, the plaintiff stated that Hartigan said he thought that the newspaper had gone "too far down market", and he felt that the feature section of the paper needed work. Hartigan agreed with Clarke's assessment that the paper needed to be more intelligent. Mr Guthrie mentioned his suggestion that the gossip column be moved away from the opinion pages, and Hartigan encouraged him to work on that concept.

78 The plaintiff then gave evidence about the move of his family from Sydney to Melbourne, and the commencement by him in his role as editor-in-chief on 19 February 2007.

79 In cross-examination (but not in evidence in chief), the plaintiff agreed that, in March 2007, shortly after he had started, differences of opinion arose between himself and Mr Blunden about what the plaintiff perceived to be interference by Blunden with his editorial responsibility. The plaintiff telephoned Mr Clarke about it, and Mr Clarke in turn spoke to Blunden. However Mr Blunden continued to interfere. Accordingly, the plaintiff sought a meeting with Mr Clarke. During that meeting, differences were discussed. It was decided at that meeting that Clarke, Blunden and the plaintiff would have regular meetings together to resolve the problem.

80 The plaintiff then gave evidence as to the lunch meeting which he had with Mr Hartigan at Southbank in August 2007. The plaintiff stated that at that lunch they spoke about a number of issues. In the course of the lunch, Mr Hartigan said that Blunden had complained to him that the plaintiff was not talking to him enough. The plaintiff responded that he was bemused by what Blunden had told Hartigan, because Clarke, Blunden and he had been meeting every Wednesday. The plaintiff said that nevertheless he would bear Mr Hartigan's comment in mind, and that if there needed to be more communication between the two men, he was happy to do it. The plaintiff, in his evidence, then stated that Hartigan said to him: "Bruce, I give you one word of warning, never go up against Peter Blunden".

81 In the meantime, the plaintiff had been involved in altering the format of the Herald Sun, so as to include the non-news section of it into a "News Extra" section, which was to be placed separate to the opinion pages of the newspaper. The "News Extra" section was launched in June 2008. According to the plaintiff, Mr Hartigan telephoned him after that, and commended him on the launch of the new section of the newspaper.

82 In cross-examination (but again not in evidence in chief), the plaintiff gave evidence about the argument which developed between himself and Mr Blunden on 14 February 2008 concerning whether one of the Herald Sun photographers should travel to the United Kingdom, at the expense of the Melbourne Storm Football Club, in order to cover that club's trip to London. I have already referred to the nature of the emails, in which that disagreement developed[28]. The plaintiff stated that on the following Monday (18 February 2008) Mr Blunden apologised to him for the emails. Mr Guthrie stated that he considered that the argument constituted a debate between the managing director, who was upholding the corporate interests, and an editor upholding the principle of the editorial independence against corporate interests.

83 In his evidence in chief, the plaintiff then referred to the emails, which passed between himself and Mr Blunden when Mr Blunden was in Beijing in August 2008 for the Olympic Games. The plaintiff stated that at about that time he had had a conversation with a "prominent Melburnian" ( who was later identified as the radio commentator, Mr Neil Mitchell), who told the plaintiff that Mr Blunden had been critical to him about the newspaper. As a consequence of that conversation, Mr Guthrie telephoned the editorial director of News Limited, who advised the plaintiff to speak to Mr Hartigan about it. Accordingly, the plaintiff telephoned Mr Hartigan, who counselled the plaintiff to speak to Mr Blunden when he returned from China.

84 Accordingly, the plaintiff had a meeting with Mr Blunden on 19 August on the latter's return from Beijing. According to the plaintiff, Mr Blunden admitted that the tone of his emails was inappropriate. He also admitted that the "prominent Melburnian" was correct, and that he (Blunden) had said some things which were out of place. Blunden undertook not to repeat that conduct. Blunden and the plaintiff agreed that they would work more cohesively in the future. As a result, the plaintiff sent to Hartigan an email stating "The meeting with Peter went well, there was no need for you to get involved, it's onwards and upwards from here". I interpolate that a copy of the email could not be found. However, in his evidence, Mr Hartigan accepted that an email, to that effect, was sent to him at that time.

85 In late September 2008, the plaintiff and his wife purchased a home in Melbourne, and placed their Sydney home on the market. On 23 October 2008, the Herald Sun published a front page story with the headline "Beverley Hills Cop", which was critical of the trip made by the then Chief Commissioner of Police, Ms Nixon, to Los Angeles. The plaintiff stated that on that day Mr Blunden spoke to him, and told him that Mrs Janet Calvert-Jones (the chairperson of the Herald and Weekly Times Limited) was not happy with the story, and considered that the paper had been too hard on Ms Nixon. According to the plaintiff, Mr Blunden stated that "Janet Calvert-Jones and Christine Nixon are mates". The plaintiff further gave evidence that subsequently, after he and Blunden flew to Sydney, Blunden, at Sydney Airport, said to him "I'm not sure we got it right on Christine Nixon".

86 In cross-examination, Mr Guthrie was questioned about some promotions, which featured in the Herald Sun in the latter part of 2008. He agreed that at a weekly management meeting on Thursday 9 October 2008, Blunden had criticised him for failing to publicise the National Geographic DVD promotion, which was to take place in the Herald Sun for a period of two weeks commencing the following Monday 13 October. Mr Guthrie stated to Blunden that he had developed the program with the marketing department, and that there were newspaper "blurbs" beginning the next day (Friday) and also in the Saturday and Sunday editions of the newspaper. He said there would also be a big page one "blurb" on Monday. Blunden questioned why no promotion had taken place in the newspaper that day, and he complained that the promotion had commenced too late. Mr Guthrie responded that the timetable had been developed in coordination with the marketing department. He asked Mr Blunden why he did not raise the issue of the timetable at the previous week's management meeting.

87 Mr Guthrie was also cross-examined about the coverage given by the Herald Sun to the Australian Football League final series in September 2008, and in particular to the prominence given to the forthcoming preliminary finals (featuring four Victorian AFL clubs) in the edition of the Herald Sun on Friday 19 September and on Saturday 20 September. In this respect, it is significant that the cross-examination included a criticism of the treatment by Mr Guthrie of the forthcoming Hawthorn versus St Kilda final in the edition of 20 September 2008. I shall return to that matter later. However, in cross-examination Mr Guthrie denied that Blunden criticised either edition of the newspaper in relation to that matter. He also denied that he had been criticised for failing to give sufficient coverage to the visit to Melbourne of Princess Mary of Denmark in the edition of the newspaper of 30 August 2008.

88 The next relevant incident, about which the plaintiff gave evidence, was the termination of his employment by Mr Hartigan on 10 November 2008. I have already set out, in detail, the conversation which occurred between the two men on that date.[29] On the same day, Mr Blunden telephoned Mr Guthrie at about 7.00 pm. Mr Guthrie said that Blunden opened the conversation by saying "I am sick to my stomach about what's happened today". Guthrie replied "Why Peter? I gather it's all your idea". Blunden said "No, I am not driving this". Guthrie replied "That's not what John Hartigan tells me". Blunden responded "I have told Hartigan there is no problem between you and me". Guthrie then said "So what is this all about?" Blunden stated "It's complicated and confidential, but essentially a third party got involved. That person said something to someone else, and then that person said something to someone else, and it went from there". Guthrie replied "So I am out of a job because apparently we don't get on". Blunden stated "I am terribly sorry". Guthrie said "This could not have come at a worse time for me and my family, we have just bought a house". Blunden said "I know, I told them to err on the side of generosity".

89 Mr Guthrie was cross-examined in some detail by Mr Houghton on behalf of the defendant. Notwithstanding the rigour with which that cross-examination was conducted, in my view Mr Guthrie was, by and large, an impressive witness. He had a good memory of the incidents, which he recalled in his evidence. In evidence in chief, and in cross-examination, he gave direct answers to questions. I did not detect any attempt by him to evade difficult questions in cross-examination, or to prevaricate.

90 In final address, Mr Houghton focused on two particular factors which, he submitted, reflected poorly on Mr Guthrie's credit. First, Mr Houghton referred to his cross-examination of Mr Guthrie about his request, in the course of pre-contractual negotiations, that he be provided with a three year term. Mr Houghton put to Mr Guthrie that he (Guthrie) had requested a three year term, so that he would be able to "dangle" a contract, containing such a term, in front of his wife, in order to convince her that she would not be staying in Melbourne for a long time. Mr Guthrie denied that proposition. In doing so, he explained that he had requested a three year term in his contract, because he had a similar term in his contract of service with the Weekend Australian Magazine. That explanation was contradicted, when his contract with the Australian Magazine was put to Mr Guthrie in cross-examination. In my view, that contradiction is not a matter of significant moment. From my observation, Mr Guthrie was endeavouring to recall, for the first time in the witness box, why he had asked for a three year term in his contract in January 2007. His memory as to the reason given by him was clearly defective. However, in my view, the mistake made by him was an honest one. I do not consider that that matter impacts significantly on his credibility.

91 The next matter relied on by Mr Houghton is a matter of greater significance. In the series of emails, which passed between Mr Blunden and the plaintiff in February 2008 concerning the proposed trip of the Herald Sun photographer to London, Mr Blunden took issue with Mr Guthrie taking the moral high ground, in light of an article published in that day's Herald Sun newspaper. That article, in my view, clearly represented that the circulation of the newspaper, including the weekday edition of the newspaper, had increased in the past twelve months. In fact, the sales, for the Monday to Saturday edition, had decreased by an average of 5,000 copies per day. In cross-examination, Mr Guthrie did not accept that the article was deceptive, because it was accurate in respect of the Saturday and Sunday sales. I reject that explanation of the article. In my view, it is clear, on its face, that the article did, without qualification, represent to the reader that the sales of the Monday to Friday, the Saturday and the Sunday editions of the newspaper were all "up". That representation was made by the prominent graphic above the article, and by the headline to the article "biggest and still the best". The publication of the article, and the failure to correct it, does not reflect well on Mr Guthrie in that regard. Nor does his failure to acknowledge the deficiency, when he was cross-examined about it by Mr Houghton.

92 The matter, to which I have just referred, has caused me to give careful consideration as to my assessment of the credibility of Mr Guthrie as a witness, and as to the reliability of his evidence. Nevertheless, taking that matter into account, I consider that Mr Guthrie was, a credible witness. I did consider that he tended to understate the seriousness of some of the differences which he had with Mr Blunden. In large part, that may have been due to Mr Guthrie's failure to perceive, at the time, the significance of some of the differences which he had with Mr Blunden. However, I do not consider that he endeavoured to mislead me as to his perception as to the nature of his relationship with Mr Blunden, or as to his interactions with him, during his term of office as editor-in-chief of the Herald Sun.

93 I turn, then, to the defendant's witnesses. As I have stated, the defendant called three witnesses, Mr Hartigan, Mr Clarke and Mr Blunden.

94 Mr Hartigan commenced by giving evidence as to the circumstances in which Mr Guthrie was retained as the editor-in-chief of the Herald Sun in early 2007. He stated that when he first spoke to Mr Guthrie, in early December 2006, he told Mr Guthrie that the three success "buttons" for editorship of the newspaper were the capacity to break news, coverage of sport, and promotions. Mr Hartigan then stated that after making the initial proposal to Mr Guthrie, there were protracted negotiations with him, during which Mr Guthrie went on holidays to Mexico. Mr Guthrie told Mr Hartigan from the outset that the biggest difficulty he had in coming to Victoria was relocating his family, and in particular his daughter. As I have already indicated, Mr Hartigan, in his evidence, maintained that the plaintiff told him it was critical that he had a three year appointment in his contract , so that he could "dangle it" in front of his wife so that she could see it as a "get out card" to return to live in their Cremorne home. He also maintained in his evidence that the plaintiff insisted on being called the "editor-in-chief" (and not just the "editor") of the newspaper, because he wanted the status that went with the role. Mr Hartigan maintained that that topic was the subject of a "very laborious and hard driven series of negotiations" on which Mr Hartigan ultimately gave in. For reasons which I have already stated, I reject the evidence given by Mr Hartigan both in relation to the reason which Mr Guthrie gave for wishing to have a three year term in his contract, and also as to Mr Guthrie maintaining that he wished to be called "the editor-in-chief", and not just the editor of the newspaper.[30]

95 Mr Hartigan stated that, from about April or May 2007, he received reports from Mr Clarke that there were problems in the relationship between the plaintiff and Blunden, and that from the time the plaintiff had become editor of the newspaper, there was a breakdown of the relationship between the two men.

96 In August 2007, Mr Hartigan had the lunch with Mr Guthrie at the Pure South Restaurant at Southbank, to which I referred. Mr Hartigan stated that he had been constantly approached by both Clarke and Blunden in relation to the problems in the relationship between Guthrie and Blunden, and therefore he wished to indicate to Mr Guthrie that it was important that he and Blunden work more harmoniously together. Mr Hartigan maintained that at the lunch he told Guthrie that the "sole purpose" of his visit to Melbourne was to tell him that he had to form a relationship with Blunden, that Blunden was one of the most outstanding editors that there had been at the Herald Sun, and that he should listen to Blunden. According to Hartigan, Guthrie replied that Blunden was a very difficult person, and that he (Guthrie) had done everything he could.

97 After the lunch, Mr Hartigan continued to receive regular reports from Clarke. Clarke told him that there were two difficulties. The first was that the two men still did not get on together. The second was that there were issues with the staff, who felt they were being frozen out by the manner in which Guthrie edited the newspaper. Mr Clarke stated that he had made a mistake in supporting Mr Guthrie as a candidate for the editor of the Herald Sun.

98 After Mr Blunden became managing director on 30 November 2007, Hartigan had regular discussions with him, generally on a weekly basis, about the Herald Sun newspaper. In those discussions, Blunden told Hartigan that the "situation" was causing commercial damage to the newspaper, and that decisions were being made which caused significant missed opportunities for the circulation of the newspaper, which was then in a pretty "parlous" state. During the next twelve months, Mr Hartigan met with Mr Blunden on many occasions, on which Blunden expressed disgust to Mr Hartigan over Mr Hartigan's reluctance to redress the situation by removing Guthrie as the editor-in-chief.[31] On those occasions, Hartigan told Blunden that he wished to explore every way of ensuring that Blunden and Hartigan had a proper professional working relationship. On one occasion in May 2008 in Los Angeles, Blunden was so disgusted with Hartigan's position that Blunden walked away from him during a conversation.

99 Mr Hartigan stated that he received a telephone call from Mr Guthrie during the Beijing Olympics in 2008. According to Hartigan, Guthrie had told him that he had received a highly critical telephone call from Blunden in Beijing about some executive changes to staff. Guthrie said that Blunden was confused because he (Guthrie) had discussed the changes with Blunden before he had departed from Melbourne. Guthrie stated "I've tried everything, he's at me again". Mr Hartigan advised Guthrie to speak to Blunden on his return. Subsequently, Hartigan received an email from Guthrie, indicating that the situation had been remedied. Nevertheless, Hartigan continued to receive reports from Blunden as to the unsatisfactory situation between himself and Guthrie.

100 In the ensuing period, there were a number of issues, reported by Blunden. Most of them related to promotions, which the newspaper had conducted, and in which Blunden felt that Guthrie had missed an opportunity to properly promote the newspaper. They included a promotion involving a free DVD relating to the 150th Anniversary of Australian Rules Football, and another promotion involving an animated CD Rom aimed at children. On another occasion, Blunden felt let down because Guthrie did not maximise the circulation opportunity relating to the visit of Princess Mary of Denmark to Melbourne. He was also critical of the lack of appropriate prominence given to the four Victorian teams, who played in the AFL preliminary final in 2008. In this regard, Mr Hartigan criticised the edition of the newspaper on Saturday 20 September 2008 which (according to Hartigan) did not refer "whatsoever" to the preliminary final between Hawthorn and St Kilda which was to take place on that evening.

101 In addition, Mr Hartigan stated that Blunden had complained to him that Guthrie had left the promotion of the National Geographic DVD collection too late, and that, on one occasion, when Guthrie had spoken to Blunden about it, Guthrie had been unaware that a television commercial relating to it had gone to air on the previous evening.

102 Accordingly, Mr Hartigan decided that he should terminate the position of Guthrie as editor-in-chief of the Herald Sun. He stated that that view was based on five considerations: first, the lack of any relationship between Blunden and Guthrie; secondly, a "sense of despair" within the senior editorial ranks of the Herald Sun, because Hartigan had picked up a "real sense over a long period of time" that Guthrie used to isolate himself from those staff; thirdly, the Herald Sun had lost its news breaking ability; fourthly, sport had been relegated to the sports page, despite the keen interest of Victorians in sport; and, fifthly, Guthrie appeared to be unable or unwilling to support promotions, which had been the lifeblood of stimulating the circulation of the Herald Sun.

103 Accordingly, Mr Hartigan spoke to the plaintiff on the morning of 10 November 2008, and terminated his appointment as editor-in-chief of the newspaper. I have already set out, in some detail, the conversation in which Mr Hartigan terminated the plaintiff's appointment.[32]

104 Mr Hartigan was then asked, hypothetically, if the plaintiff's appointment had not been terminated in November 2008, whether Mr Hartigan would have "renewed his contract when it came up for renewal" in February 2010. Mr Hartigan responded: "I can say emphatically that he wouldn't have been renewed".

105 As I have already indicated, I have reservations about a number of features of Mr Hartigan's evidence. In particular, I gained the impression, particularly when Mr Hartigan was being cross-examined, that his actual recollection of the particular events and conversations, about which he gave evidence, was not as reliable, or indeed as strong, as Mr Hartigan made it appear. I do not criticise Mr Hartigan for not recalling the detail of the matters about which he gave evidence. As the chief executive officer of News Limited, he had a large number of responsibilities, of which the dispute, with which I am concerned, was but one part. However, in the course of cross-examination, it became apparent that Mr Hartigan attempted to give the impression of having a better memory of the events, about which he gave evidence, than was the fact. Further, I also gained the impression that Mr Hartigan's recollection had been affected, to some degree, by the dispute between the plaintiff and the defendant, and that, as a result, some of his recall was affected by a process of rationalisation of events from a later date. Again, in making that observation, I do not conclude that Mr Hartigan made a conscious effort to mislead me in relation to his evidence. However, as I have stated, there were aspects about his evidence, which lead me to be cautious about accepting a number of critical features of it.

106 I have already referred, at an earlier stage in these reasons[33], to Mr Hartigan's evidence as to two aspects of the negotiations, in respect of the contract between the plaintiff and the defendant. Mr Hartigan gave confident evidence that the process of negotiation with the plaintiff was hard driven and protracted. The objective evidence is to the contrary. The initial offer was made in late November or early December. The detail of it was formalised by a letter dated 13 December by the defendant to the plaintiff. In the meantime, the plaintiff went overseas to Mexico. He responded, in writing, with a detailed letter of 7 January, setting out his counterproposal in respect of the terms of his employment. It would appear, from a series of emails, that the plaintiff accepted the position of appointment of the editor-in-chief of the Herald Sun on 11 January. The appointment was announced by the defendant on 18 January. That chronology, in my view, plainly contradicts Mr Hartigan's claim that there was a series of hard driven protracted negotiations.

107 Further, as I have already indicated, Mr Hartigan maintained that Mr Guthrie insisted on being accorded the title "editor-in-chief" of the Herald Sun (rather than "editor"), in order to have the status which went with such a title. It was that aspect, Mr Hartigan maintained, that was the centre of the "long protracted and hard driven" series of negotiations between the parties. Again, that claim is contradicted by the fact that the letter of offer of 13 December, by the defendant to the plaintiff, referred to the plaintiff's appointment as "editor-in-chief" of the Herald Sun. Further, I note that that matter was not put to Mr Guthrie in cross-examination by Mr Houghton, notwithstanding that Mr Houghton had been meticulous in putting his instructions to Mr Guthrie in cross-examination.

108 The matters, to which I have just referred may, standing alone, be explicable on the basis that Mr Hartigan, understandably, has a defective memory about the detail of the negotiations. However, I am concerned that notwithstanding the nature of his memory, he was prepared to give his evidence without any qualification. His evidence, relating to the reasons why the plaintiff insisted on a three year term (in order to be able to "dangle a get out card" in front of his wife) has the hallmark of an attempt by Mr Hartigan to argue the case on behalf of the defendant, by demonstrating that it was always the intention of the plaintiff to return to Sydney on the completion of his three year contract with the defendant. The claim that Guthrie insisted on the title "editor-in-chief" gave me the impression that Mr Hartigan was seeking to demean or discredit Mr Guthrie in my eyes.

109 The matters, to which I have just referred, however, are not the only criticisms which might be made of the evidence of Mr Hartigan. In his evidence in chief, he stated that the "sole" purpose of the lunch with Guthrie in August 2007 was to point out to Guthrie that he must develop a better relationship with Blunden. He maintained that he told Guthrie that that was the "sole purpose" of the lunch. That proposition was not put to Mr Guthrie in cross-examination. When Mr Hartigan was pressed, by Mr O'Bryan, as to the detail of the meeting, Mr Hartigan, at one point, retorted "I have a vague memory of both the reason for it (the lunch meeting) and the nature of the discussion I had with Mr Guthrie". In evidence in chief, he maintained that when he told Guthrie that he should form a better relationship with Blunden, Guthrie responded that he felt that Blunden was a very difficult person, and that he (Guthrie) had done everything he could. In cross-examination, Mr Hartigan gave a different response, stating that he "vividly" remembered Guthrie responding (at the lunch) that he was surprised by Blunden's complaint about their relationship, because Mr Clarke had established a little while ago, regular meetings between Clarke, Blunden and Guthrie.[34]

110 Pausing there, it became clear to me, as indeed was conceded by Mr Hartigan at one point, that his memory of the conversation of the lunch was "vague". By contrast, Mr Guthrie had a clear and consistent recollection of it. I prefer Mr Guthrie's evidence in relation to the lunch and what occurred there. I certainly accept that the reports, which Mr Hartigan had received from Blunden and Clarke about the relationship between Blunden and Guthrie, were an important reason for Hartigan convening the lunch. I do not accept that it was the "sole purpose", or that Hartigan stated that to Mr Guthrie. Nor do I accept that Mr Guthrie responded to Mr Hartigan that Blunden was difficult to get on with. Rather, I prefer Mr Guthrie's version of the lunch meeting, namely, that he said to Hartigan that he was surprised by Blunden's complaint, because Clarke, Blunden and himself were meeting every Wednesday.

111 Further, there are two aspects relating to Mr Hartigan's evidence, in respect of the promotions undertaken by the Herald Sun in the latter part of 2008, which give me cause to have reservations about his evidence. In his evidence in chief, he stated that after Mr Guthrie had contacted him in August 2008 concerning the dispute which Guthrie had with Blunden while Blunden was in Beijing, there were a number of issues relating to the promotions which the newspaper had conducted. The first instance he gave was the promotion by the newspaper of the 150th Anniversary of the Australian Rules Football. On analysis that evidence was plainly wrong, since it is apparent that the promotion took place earlier that year, in May 2008.

112 More importantly, Mr Hartigan specifically gave evidence that Blunden had criticised Guthrie to him about the failure of Guthrie, on Saturday 20 September, to make any reference "whatsoever" on the front page of the newspaper to the Hawthorn versus St Kilda preliminary final which was to take place later that day.[35] Mr Hartigan stated, in the same passage of his evidence, that in his office he had a rack of newspapers, produced by News Limited and other organisations, to which he had ready resort if an issue was raised in relation to any of them. Thus he stated "... if someone says there's an accusation (about a newspaper), you can make up your own judgment very quickly".[36] In cross-examination, Mr Hartigan had placed before him a copy of the front page of the newspaper of Saturday 20 September. Notwithstanding that that document was before him, he persisted with his criticism of Guthrie for failing to make any reference, on it, to the Hawthorn versus St Kilda game. In fact, the newspaper, on its front page, made two express references to that game. That error, in the evidence of Mr Hartigan, not only revealed a clear error in his memory, but, more importantly, an evident lack of care exercised by him in giving his evidence before me.

113 In his evidence, Mr Hartigan, on a number of occasions, maintained that he had a number of contacts with Mr Guthrie. When it was put to him that he had been inconsistent in his evidence about Guthrie's response, at the August 2007 lunch meeting, to the complaint of Blunden, Hartigan maintained that, on different occasions, Guthrie gave different responses, sometimes claiming that he had a good relationship with Blunden, and on other occasions maintaining that Blunden was impossible to talk to. When pressed, Mr Hartigan could only remember one specific such occasion, namely, the lunch meeting of August 2007, in respect of which, in another passage of his evidence, Mr Hartigan conceded he had only a "vague" memory. On the other hand, Mr Guthrie gave precise evidence as to the four occasions upon which he met Hartigan face to face, and the four or five occasions on which he spoke to him on the telephone. I prefer the evidence of Mr Guthrie, given the deficiencies of Mr Hartigan's evidence in this respect. Again, it is a matter of concern that Mr Hartigan, notwithstanding the frailty of his memory in relation to this issue, was prepared to maintain in evidence that he had had those contacts with Guthrie. I am satisfied that he did not.

114 Finally, I accept the criticisms by Mr O'Bryan as to the reasons given by Mr Hartigan for his decision to dismiss Guthrie from his position as editor-in-chief of the Herald Sun in November 2008. As I stated, Mr Hartigan, in his evidence, advanced five reasons for reaching that conclusion. It is significant that the second, third and fourth of those reasons were not the subject of any cross-examination by Mr Houghton of Mr Guthrie. Further, and more importantly, it is significant that when Mr Hartigan spoke to Mr Guthrie on 10 November, he gave Mr Guthrie only one reason why he was being dismissed as editor-in-chief of the Herald Sun, namely because of "his inability to get on with his now managing director". When Mr Guthrie contested that that was so, Mr Hartigan did not state that there were other reasons for the decision. My assessment of Mr Hartigan is that he is not a person who would have been reticent about stating to Mr Guthrie the true reasons for his dismissal. It is clear that Mr Hartigan felt badly about what he saw as the necessity of terminating Guthrie's appointment. Mr Hartigan fully appreciated the potential impact of his decision on Mr Guthrie and his family. In those circumstances, there is no reason why Mr Hartigan would not have told him all the reasons which Mr Hartigan then had for dismissing Mr Guthrie. In my view, his evidence about this matter was an example of ex post facto rationalisation by Mr Hartigan of his decision. I accept that he told Mr Guthrie the truth on 10 November, when he told him that he was being dismissed because of his inability to get on with his managing director, Mr Blunden.

115 Indeed, that assessment of Mr Hartigan's evidence is reinforced by the fact that Mr Hartigan, at the same meeting, was prepared to countenance arranging for the plaintiff to obtain another position in the company. In cross-examination, he stated that he was prepared to explore ways with the plaintiff for the plaintiff to remain working with News Limited, without the plaintiff having "any form of responsibility to Mr Blunden".[37] That evidence confirms the truth of what Mr Hartigan told to Mr Guthrie on 10 November, namely, that the sole basis for his dismissal as editor-in-chief of the Herald Sun was because of the breakdown in the relationship between Blunden and Guthrie. In that light, I consider that the other four reasons, given by Mr Hartigan, were later rationalisations, rather than the reasons for the dismissal in November 2008. In other words, in hindsight, Mr Hartigan considers that there may have been other deficiencies in Mr Guthrie's performance of his role justifying his dismissal. However, I am not satisfied that it was those reasons, which induced Mr Hartigan to dismiss Mr Guthrie as the editor-in-chief of the Herald Sun in November 2008.

116 The second witness called for the defendant was Mr Julian Clarke. Mr Clarke gave evidence as to the circumstances in which Mr Guthrie was appointed as editor-in-chief of the Herald Sun. He described a meeting, which he had with Mr Guthrie in early December 2006, and in which he told Mr Guthrie that news and sport were the two "bookends" of the newspaper. He told Mr Guthrie that he would be retiring in 2007, and that it was essential that Guthrie work closely with Blunden, who would replace him. Mr Clarke also said that he talked to Guthrie about the opinion and editorial pages, which Mr Clarke then considered needed development.

117 Mr Clarke gave evidence as to two incidents, which occurred shortly after Mr Guthrie commenced in his position as editor-in-chief on 19 February 2007. The first incident was an "altercation" in which (according to Mr Clarke) the plaintiff had a conversation with Mr Bolt, a journalist of the Herald Sun, and which concluded with Mr Guthrie making an inappropriate gesture to Bolt. When Mr Clarke learnt of that incident, he told Guthrie that he should not be making such gestures to the journalist, and Guthrie dismissed it as a light hearted matter. Mr Clarke stated that that matter concerned him substantially. The other matter which, according to Mr Clarke, concerned him in the early stages, took place in relation to a transposition of photographs in the newspaper. The plaintiff told Clarke that Blunden had contacted the journalist to criticise him for that error. Guthrie asked Clarke for his advice as to how he (Guthrie) should handle it. Clarke told Guthrie that he should speak directly to Blunden, and tell him that any critique of the paper like that should be put directly to Guthrie. Mr Clarke said that he then spoke to Blunden and made the same point to him.

118 Pausing there, two points should be made. First, although Mr Guthrie was cross-examined concerning a discussion or disagreement which he had with Mr Bolt, it was not put, in cross-examination, that he had made an inappropriate gesture to Bolt at the conclusion of the discussion. Secondly, Mr Clarke stated that the two incidents, to which I have referred, "worried" him. It is difficult to see how the second incident caused Mr Clarke to worry at all about Mr Guthrie. As Mr Clarke himself acknowledged, it was for Guthrie, and not Blunden, to deal with issues such as the error made by the journalist in the transposition of the photographs. The fact that Mr Clarke, in his evidence, considered that the matter was, in some form, an issue about which to be concerned with Mr Guthrie's behaviour, is, in my view, an indication of the inclination, which I perceived Mr Clarke to have in his evidence, to look, in retrospect, for matters with which he might criticise Mr Guthrie.

119 Mr Clarke gave evidence that, in the period from late March to June 2007, he continually found that Mr Guthrie and Mr Blunden were giving him conflicting versions about matters, which he was discussing with them. He therefore convened monthly meetings involving the three of them, in order to eliminate the problem of communication which apparently had occurred. However, during the period from June to the end of November 2007, it became clear to him that Guthrie did not want Blunden anywhere near what he (Guthrie) was doing. Clarke considered that Guthrie was inexperienced, and was making mistakes in his judgments, and he was worried because Guthrie was exuding a sense of arrogance about the way he was handling his role. Mr Clarke stated that he discussed with Guthrie on many occasions that his relationship with Blunden had to improve. Mr Clarke said that he then began discussing the same matter on a number of occasions with Hartigan. When Mr Clarke retired from the position of managing director at the end of November 2007, he hoped that there would be an improvement in the relationship. He felt that when he was removed from the scene, the relationship between Blunden and Guthrie might improve. However, it appeared that their relationship continued to be poor. In addition, Mr Clarke considered that the paper had lost its "news edge", and that the business of the Herald Sun was being adversely affected.

120 Mr Clarke then gave evidence about a meeting in September 2007, at which the "extra" edition of the newspaper, which had been introduced by Guthrie, was to be discussed. When Clarke arrived at the meeting, Guthrie exploded at the advertising sales director, Ms Fiona Mellor, and accused her of being unprofessional. Mr Clarke described Guthrie's comment as a "brutal demolition" of Ms Mellor. Mr Clarke rebuked Guthrie, and told him that that was not how he should operate.

121 Mr Clarke further stated that before his retirement, there were a number of complaints made to him by members of staff about their inability to have access to Guthrie, and about Guthrie's abrupt style. Mr Clarke said he reached the conclusion by August 2008 that the damage to the newspaper was beyond reasonable limits. In his evidence, he made a number of criticisms of Guthrie, which he considered were "sentinel issues". He referred to the publication of the audited circulation results in February 2008 in a manner which was "misleading"; he said that it had been reported to him that the National Geographic 14 part DVD promotion had not been promoted until it was launched; and, finally, he said that he was concerned that the Hawthorn versus St Kilda preliminary final was not on the front page of the newspaper.

122 I pause to make two remarks about those matters. First, if it was reported to Mr Clarke that the National Geographic DVD had not been promoted before it was launched, then that report was plainly incorrect; in fact, there was a prominent promotion of it on the front page of the Herald Sun on the Friday and a further promotion of it on the Saturday before its launch on the following Monday, 13 October. Secondly, Mr Clarke (like Mr Hartigan) was wrong in maintaining that the Hawthorn versus St Kilda preliminary final was not on the front page of the newspaper; on the contrary, as I have stated, the front page contained two separate references to it.

123 Returning to Mr Clarke's evidence, Mr Clarke stated that if Mr Guthrie's appointment had not been terminated in November 2008, and if he had remained in his position until the expiration of his contract in February 2010, he would have argued against Mr Guthrie's contract being extended.

124 In my view, Mr Clarke was basically truthful in the evidence which he gave in the Court. However, as I have already noted, I did detect an inclination by him to find criticisms of Mr Guthrie in retrospect, which may not have in fact been entertained by him at the time. In saying that, I do not consider that Mr Clarke intended to mislead the Court. However, I do consider that there was an element of exaggeration and unconscious embellishment by him about his perception of Mr Guthrie. I do accept that Mr Clarke, at the time, was genuinely concerned, because he perceived there to be a poor relationship between Blunden and the plaintiff. I also accept that Mr Clarke considered that, at least in a substantial measure, the main "fault" for that problem should be attributed to Guthrie, and not Blunden. It is clear that Mr Clarke's concerns were such that he did mention the matter to Mr Hartigan on a number of occasions, and that, in addition, he (Mr Clarke) instituted a series of regular meetings in order to remedy the lack of sufficient communication between the plaintiff and Blunden.

125 The final witness for the defendant was Mr Peter Blunden. As I have stated, Mr Blunden has had a long career with the media, commencing as a journalist himself, and progressing to the position of editorships in the late 1980s. In 1996, he was appointed the editor of the Herald Sun, and in May 2001 he was promoted to the position of editor-in-chief of the Herald and Weekly Times. In that capacity, he had the responsibility not only for the Herald Sun, but also for the Sunday Herald Sun, the Weekly Times and MX. Mr Blunden stated that in late 2006 he was asked by Clarke and Hartigan for suggestions about who might succeed him as editor. Blunden said he suggested three possibilities, one of whom was Guthrie.

126 Mr Blunden then stated that in March 2007, after Guthrie had commenced duties as editor in February, Clarke told Blunden that he had received a complaint from Guthrie about Blunden interfering in the newspaper, arising out of the contact which Blunden had had with the journalist responsible for the erroneous transposition of the two photographs in an edition of the newspaper. Mr Blunden considered that his contact with the journalist on that matter was innocuous. As a result, a meeting was convened with Clarke, Blunden and Guthrie. In that meeting, Clarke explained to Guthrie that Blunden should be welcome on the editorial floor, and he cautioned Blunden against interfering with Guthrie's role as editor.

127 Mr Blunden then gave evidence that during 2007 he was concerned that Guthrie was not appropriately communicating with him. Mr Blunden conveyed that concern to Mr Clarke, and as a result regular meetings were instituted between the three men, to ensure that communications were working smoothly.

128 During that time, Mr Blunden spoke to Mr Hartigan on various occasions about matters relating to the newspaper. One of the subjects discussed by them was the performance of Mr Guthrie as the new editor-in-chief of the newspaper. Mr Blunden said that he tried to be encouraging, but he pointed out that there were matters concerning the newspaper with which he did not agree, and he felt that Guthrie was not prepared to listen to Blunden about them. He told Hartigan that he felt that the paper had lost its news edge, and that it was no longer setting the news agenda. He thought there was too much emphasis on the feature section, as opposed to news and sport.

129 Mr Blunden then stated that he was aware that Mr Hartigan and Mr Guthrie had lunch together in August 2007. According to Mr Blunden, after that lunch, Guthrie spoke to him, and explained that Hartigan had said that if Guthrie did not have Blunden's support, he would not have Hartigan's support. He said that Hartigan had made it very clear that it was important that Guthrie work with him, because he had a lot to offer to help Guthrie.

130 Mr Blunden then stated that when he took over as managing director on 1 December 2007, he had hoped to have a more open relationship with Guthrie. However, there was a difference of opinion between them as to the direction which should be taken by the newspaper. According to Blunden, Guthrie's emphasis was on developing the feature sections and the "softer" part of the paper, but, in the opinion of Blunden, that detracted from the matters which should have been emphasised, in particular news and sport. Mr Blunden stated that they worked hard in improving their personal relationship, but a "vast professional gulf" was developing between them.

131 Mr Blunden then gave evidence relating to the dispute, which he had with Guthrie in February 2008, concerning the coverage of the Melbourne Storm trip to the United Kingdom. Mr Blunden stated that he felt that Mr Guthrie's view was hypocritical, in light of the fact that the National Australia Bank had funded Guthrie's attendance at the pre-season AFL football match hosted by it in Dubai. Mr Blunden also referred to the misleading article concerning the newspaper's circulation figures, contained in the edition of the newspaper of 15 February. Mr Blunden stated that he was very concerned, because in his view this was "highly deceptive" of the readers of the Herald Sun. Mr Blunden stated that he was concerned that Guthrie made no attempt to correct that matter.

132 Mr Blunden next gave evidence about his trip to Beijing to attend the Olympics in the later part of 2008. While he was en route to Beijing, Mr Blunden read, on his BlackBerry, the email relating to the proposed new staff appointments. Mr Blunden said he had not discussed that matter with Guthrie, and he was concerned about the creation of the new position of executive editor.

133 Mr Blunden said that he had a meeting with Mr Guthrie on the first day after he had returned from Beijing. He told Guthrie that Guthrie needed to communicate major issues to him, particularly in light of budgetary constraints, which were operating at the time. Mr Guthrie responded that he felt he had a right to create the position. Mr Blunden responded that they should try to work more closely together. Mr Guthrie attempted to explain to him that he felt that Blunden was interfering in the newspaper. Mr Blunden said that he was not trying to interfere, and that Guthrie should not misconstrue Mr Blunden's conduct, when he spoke to reporters or journalists on the editorial floor.

134 Mr Blunden stated that at that time Mr Guthrie also raised with him that Mr Neil Mitchell had said to him that he (Blunden) had been critical of the paper. Mr Blunden said that the only comment he made to Mr Mitchell was when Mitchell asked him "what's happened to the paper?", and he (Blunden) responded to that criticism. Mr Blunden said that he accused Mr Guthrie of doing similar things. He said that they both agreed that they had been saying negative things behind each other's back, and they agreed that this must end.

135 Mr Blunden stated that notwithstanding the agreement between them that they should move on from that meeting, he still had concerns about the way that Mr Guthrie responded to his complaints about "integrity issues". After that meeting, Mr Blunden had three concerns about promotions. He said he was concerned about the promotion of the 150th Anniversary AFL DVD. He was concerned that in the week leading to the launch of the promotion, the newspaper did not advertise it properly. He also expressed concern to Guthrie that they had not properly publicised the promotion relating to the children's DVD game.

136 Mr Blunden also said that he had concerns about the presentation of the 14 part National Geographic DVD promotion. At the weekly management meeting of 9 October, he asked Guthrie what his plans were in relation to that series, which was due to commence on the next Monday, 14 October. Guthrie responded that he was intending to run a "big blurb" on the Monday, which was the day it started. Blunden said that that was too late, and it should be advertised now. Guthrie responded that if it was so important, the Herald Sun should make a television advertisement promoting it. To that Mr Blunden responded, "It started last night".

137 Mr Blunden also stated that he had a disagreement with Guthrie about the prominence given by the Herald Sun to the visit of Princess Mary of Denmark, and he felt that it was disappointing that the newspaper only ran a story on that visit on page 18 of the edition of 30 August 2008. In addition, Mr Blunden criticised Guthrie for failing to provide a proper front page promotion of the Geelong versus Western Bulldogs preliminary final in the edition of the Herald Sun of Friday 19 September 2008. However, he had no criticism of the edition of Saturday 20 September, concerning its promotion of that evening's Hawthorn versus St Kilda match.

138 Mr Blunden stated that during the period from December 2007 until November 2008, he talked to Mr Hartigan a couple of times a week about a range of issues. During that time, on a number of occasions, he told Mr Hartigan about his relationship with Guthrie. After the dispute in February 2008, Mr Blunden came to the firm view that Hartigan should terminate Guthrie's employment with the Herald Sun, and he communicated that view to Hartigan. He told Hartigan that there were a wide range of issues, which he was struggling to rectify across the business. He told Hartigan in particular that there were problems with staff morale, that there was not enough emphasis on breaking news, and that Guthrie was not responding to emails sent to him by members of the staff. Hartigan said that he wanted to give it further time to see if matters would improve.

139 Mr Blunden then referred to the edition of the Herald Sun newspaper of 23 October 2008, which published the "Beverley Hills Cop" front page story. He denied that on that day, or subsequently on a plane trip to Sydney, he told Guthrie that Mrs Calvert-Jones was not happy with the story which the Herald Sun had run on that topic.

140 Finally, Mr Blunden gave evidence that on the day Mr Guthrie's employment was terminated on 10 November 2008, he telephoned Guthrie in his office at 7.00 pm. He asked Guthrie what he and Hartigan had decided about his movements. Guthrie responded "What's happening here mate?" Blunden said "I am sick to the stomach that it had to end this way". Guthrie said "Harto says that you told him that it was because we couldn't get on". Blunden replied "Well that's actually not true, I told him we actually watched the Melbourne Cup together". Guthrie replied "But Harto's pointing it all at you". Blunden responded by saying "Well it's actually not only me Bruce, there are a lot of other people involved in this decision". Guthrie then said that the decision could not have come at a worse time, because he just bought a house in Melbourne and was selling his house in Sydney. Blunden said that he was sure that the defendant would be generous, and he advised Guthrie to go home to his family.

141 Mr Blunden was then asked a hypothetical question, as to what advice he would have given Hartigan in February 2010 about the renewal of the plaintiff's contract, if the plaintiff's appointment as editor-in-chief of the Herald Sun had not been terminated in November 2008. Blunden stated that he would have emphatically recommended against the renewal of that appointment.

142 There are a number of matters in relation to the evidence of Mr Blunden, which emerged in cross-examination, and which significantly affected my assessment of the credibility and reliability of Mr Blunden as a witness. Overall, he did not present as a witness who was confident in his testimony. On a number of occasions, he had to be asked the same question, in cross-examination, more than once. A number of his answers were preceded by lengthy pauses.

143 In common with the other witnesses in the case, it became evident that Mr Blunden's memory and recounting of the events, which occurred during and immediately after Mr Guthrie's editorship of the Herald Sun, was affected by the dispute which had arisen between the plaintiff and the defendant, and in particular by the central role which Mr Blunden had played in the decision to terminate Guthrie's appointment, which led to that dispute. It became evident that Mr Blunden, in his evidence, endeavoured to portray his own conduct in the affair in a favourable light, and, in particular he endeavoured to downplay the significant role which he had had in the termination of Mr Guthrie's appointment as editor-in-chief of the Herald Sun. His conduct in doing so is consistent with his behaviour in failing to reveal to Mr Guthrie, both while he was editor and shortly after his termination, the true fact that Mr Blunden had been working, for some time, to achieve his dismissal. I also consider that the explanations given by Mr Blunden in evidence, for not revealing to Mr Guthrie, at the time, that he was advocating his removal as editor-in-chief of the Herald Sun, do not survive scrutiny. In my view, Mr Blunden's consciousness that it was he who was critical in Hartigan's decision to terminate Guthrie's appointment, and his consciousness that he had not been candid with Guthrie about that role, led him to exaggerate flaws, which he perceived Guthrie to have as an editor-in-chief of the Herald Sun. While I accept Mr Blunden's evidence that, from a reasonably early stage after Guthrie's appointment, he became convinced that Mr Guthrie was not the right man for the job, nevertheless I detected, in his evidence, a tendency to exaggerate the flaws, which he had found in Guthrie's conduct, and his recollection and recounting of a number of the central incidents, which were the subject of the his evidence. A number of features in Mr Blunden's evidence led me to that conclusion. It is sufficient for me to mention some of them, and I shall do so, so far as possible, in chronological order.

144 The tendency to which I have just referred emerged, in a minor way, in Mr Blunden's evidence about the role he played in the initial selection of Mr Guthrie as his replacement as editor of the Herald Sun. In his evidence in chief he stated that when asked for suggestions as to who might succeed him, he suggested three possibilities, one of whom was Guthrie. He denied putting Guthrie forward as the primary candidate, but rather said that he supported Hartigan's decision to select him. By contrast, Mr Hartigan stated that both Clarke and Blunden strongly supported Guthrie's appointment. Clarke's evidence, in cross-examination, was to the same effect. He agreed that both he and Blunden believed that Mr Guthrie was on the top of the list, and was first choice for the role. Mr Guthrie gave evidence that Mr Blunden told him that he was on the top of the list, and that there was "daylight" between Mr Guthrie and the other two potential candidates. The issue is only minor, but it was manifestation of a pattern which I discerned in Mr Blunden's evidence, namely, to minimise the role which he did in fact play in both the selection and later termination of the appointment of Mr Guthrie as the editor-in-chief of the Herald Sun.

145 There were also aspects of Mr Blunden's evidence, in relation to the dispute which arose concerning the visit of the Melbourne Storm to London in February 2008, which are relevant to the assessment of Mr Blunden's evidence. Mr Blunden responded to the concerns expressed by Guthrie, about Melbourne Storm funding the photographer's trip to London, by accusing Guthrie of hypocrisy. In emails, which Mr Blunden sent to Mr Guthrie on 15 February, and in his evidence, Mr Blunden accused Guthrie, of a lack of integrity in publishing the misleading article about the Herald-Sun's circulation figures. In cross-examination, Mr Blunden was pressed about the matter, and was asked whether he himself did anything to ensure that the misleading article was corrected. With hesitation and reluctance, he ultimately conceded that, apart from accusing Guthrie about the matter, he did nothing at all to ensure that the misleading circulation figures, published in the Herald Sun, were corrected. His conduct in failing to press the issue at the time was inconsistent with the high dudgeon he expressed about the matter in his emails and in his evidence.

146 Further, when pressed in cross-examination about the stance which he himself took about the issue of the Melbourne Storm funding the expenses of the Herald Sun photographer, Mr Blunden waxed and waned about whether he regarded the issue as a minor issue or a major issue. He commenced by saying that he did not regard it as a "massive issue". When Mr O'Bryan pointed out to him that, in the exchange of emails, he felt sufficiently strongly about it as to counter Mr Guthrie's arguments by referring to Mr Guthrie's trip to Dubai, Mr Blunden then described the issue (about the funding of the photographer's trip by Melbourne Storm) as a "major issue". Two questions later he reverted to describing the issue as a "trivial issue".

147 Mr O'Bryan also pressed Mr Blunden in relation to the question whether he had, in about August 2008, criticised Guthrie behind his back to the radio commentator, Mr Neil Mitchell. Mr Blunden was particularly reluctant to concede that he had indulged in that conduct. In cross-examination, Mr Blunden stated that there was no particular meeting, which he had with Mr Mitchell, but rather that he ran into Mr Mitchell around town quite often, because he was an acquaintance. He then said that he did see Mr Mitchell on social occasions, once a month, in a group of friends, for a lunch. When pressed further about what he said to Mitchell, he said that the conversation commenced with Mitchell making comments about the paper which were not positive, but that he simply responded to them, and that he could not recall what he said, but "You know being media people who have worked side by side, he's an employee of the paper as well, he writes a column, and we would talk about these issues, but I did not initiate any discussion". He proceeded in the same vein, stating that he did not talk about Mr Guthrie as a person but about the paper. When pressed further by Mr O'Bryan, Mr Blunden, in cross-examination, said: "We agreed not to criticise each other around town because we both agreed that we had both done it and I did make criticisms to Mr Mitchell after Mr Mitchell initiated the conversation ... ". Mr Blunden described that "agreement" with Guthrie as a "joint pact" between himself and Guthrie.

148 It can be seen from the foregoing passages, to which I have just referred, that Mr Blunden was most reluctant in his cross-examination to reveal what he had said to Mitchell about Guthrie. Ultimately, by accepting, in cross-examination, that "we had both done it", he admitted that, in effect, he had criticised Guthrie behind his back to Mitchell. He sought to excuse or mitigate that conduct by ascribing the same behaviour to Guthrie. I interpolate that no allegation was put to Guthrie, in cross-examination, that he had indulged in the same type of conduct.

149 In his evidence in chief, Mr Blunden had then proceeded to criticise Guthrie for his failure to adequately publicise, in the Herald Sun, the promotions to which I have already referred. As I have observed in relation to the evidence of Mr Hartigan, Blunden was also in error in recalling that the AFL promotion took place in that period. His evidence about the National Geographic DVD is more significant in determining his credit on this matter. When giving his evidence in chief about the management meeting of 9 October 2008, he did not mention, at all, that the publicity, in the Herald Sun, commenced the next day, Friday 10 October. Rather, he alleged that Guthrie, at the meeting, had said that the publicity would commence on Monday 14 October with a "big blurb". In cross-examination, Mr Blunden was shown, by Mr O'Bryan, a copy of the front page of the Herald Sun of Friday 10 October, which contained a prominent advertisement for the DVD promotion. In response, Mr Blunden stated, for the first time, that the advertisement was included in the Friday edition of the paper, because he had told Guthrie to do so in the meeting the previous evening. He expressly denied the proposition put to him in cross-examination by Mr O'Bryan, that Mr Guthrie, at the meeting on Thursday 9 October, had stated that the publicity would commence the next day, Friday 10 October.

150 Pausing there, in his evidence, Mr Guthrie said that, at the meeting of 9 October, he expressly told Blunden that the publicity would commence on the next day, Friday 10 October. I prefer the evidence of Mr Guthrie on this point for three reasons. First, I note that in the preceding year, the publicity in relation to the National Geographic DVD promotion had commenced one day before the promotion was launched. At that time, Mr Guthrie was already editor of the Herald Sun. That fact adds to the probability that Mr Guthrie was correct in stating that he had already planned to commence the publicity of the promotion on the Friday. Secondly, Mr Blunden had absented himself from the previous management meeting of 2 October, at which Mr Guthrie states that the timetable for publicising the promotion had been determined. Thirdly, in my view Mr Guthrie's recollection of the conversation was superior to that of Mr Blunden. When Mr Blunden was pressed in cross-examination, he gave the distinct impression that his responses were the product of a rationalisation by him of what had occurred, rather than a distinct recollection of the events at the time.

151 It is further evident that in respect to this aspect of the case, there was a distinct shift in the defendant's case. When Mr Houghton cross-examined Mr Guthrie about the matter, he put, by reference to particular statistics, that the promotion had failed to achieve the sales which had been expected by the defendant. No doubt that proposition was put to Mr Guthrie on specific instructions, namely, that the promotion had been a failure. However, when Mr Blunden was questioned by Mr O'Bryan in cross-examination, it was revealed that the promotion was, in fact, a significant success. Mr Blunden, when pressed, accepted that the publicity, which took place on the preceding Friday and Saturday, was adequate, and that the promotion was a high quality one. Ultimately, in cross-examination, he accepted that he was happy with the result of the promotion. His only remaining complaint was that, on his version, Mr Guthrie had to be pressed before agreeing to properly publicise the promotion. As I have already indicated, I do not accept Mr Blunden's version of the management meeting of 9 October 2008.

152 In this context, it is important to note that Mr Hartigan considered that Blunden's report to him, about Guthrie's conduct in relation to the National Geographic promotion, was the "tipping point", which finally pushed him to determine that Guthrie's appointment should be terminated. In my view, this aspect of the case has some significance. It would seem that, notwithstanding the matters to which I have already referred, Blunden, in some manner, had a level of dissatisfaction with Guthrie's conduct about the promotion of the National Geographic DVD. It seems that he was unable to properly articulate, in his evidence, what the cause of that dissatisfaction was. Nevertheless, he found sufficient cause to make a complaint to Hartigan about it, which, as I stated, Hartigan considered to be the last straw causing him to finally decide to remove Mr Guthrie as the editor-in-chief of the Herald Sun. That aspect of the case adds force to the proposition that, ultimately, it was the difficulty in the relationship between Guthrie and Blunden, and particularly Blunden's difficulty with that relationship, which was the root cause of the dismissal of Guthrie as editor-in-chief of the Herald Sun.

153 The final, and most telling factor, relating to Mr Blunden's evidence, concerned his conduct in relation to Mr Guthrie's dismissal.

154 In cross-examination, Mr Blunden accepted that, since February 2008, he had been working assiduously to persuade Mr Hartigan to terminate Guthrie's appointment. In evidence in chief, and in cross-examination, he claimed (on more than one occasion) that he accepted and respected Hartigan's decision to give Guthrie more time. By comparison, Mr Hartigan gave evidence that Mr Blunden was not satisfied with his decision, and that, on more than one occasion, Blunden expressed or manifested to Hartigan, Blunden's "disgust" with Hartigan's stance that he wished to give Mr Guthrie more time to settle into his role. When those matters were put to Mr Blunden in cross-examination, he changed his account, to some extent, by accepting that, on at least one occasion, he lost his temper with Mr Hartigan about the matter.

155 In cross-examination, Mr Blunden also accepted that, notwithstanding that he had been repeatedly pressing Hartigan to sack Guthrie, he never once told Guthrie that he had been giving that advice to Hartigan. Mr Blunden gave conflicting and differing reasons for not doing so, none of which were satisfactory. When first asked why he did not tell Guthrie what he was stating to Hartigan, he said "Well I didn't think it was his - he didn't need to know what I was talking to Mr Hartigan about ... I don't make the final decision on Mr Guthrie's appointment, Mr Hartigan does. It's not appropriate for me to pre-empt to Mr Guthrie what Mr Hartigan might decide". He then attempted to side step the issue by stating that "I told Bruce what I thought", but when pressed further, he said that he did not tell Guthrie that he was trying to persuade Hartigan to remove him. When further questioned about the matter, he said: "I didn't tell him I was talking to Mr Hartigan no, because I knew Mr Guthrie was actually talking to Mr Hartigan himself, about our differences". Pausing there, that answer is clearly incorrect. As I have already found, Mr Guthrie only spoke to Mr Hartigan on a handful of occasions.

156 Shortly after those exchanges, the luncheon adjournment occurred. After that adjournment, Mr O'Bryan questioned Mr Blunden generally about the issue. Mr Blunden then gave what, to my perception, was clearly a pre-rehearsed speech, that he considered it would have been improper for him to tell Guthrie about his dealings with Hartigan, because if Hartigan did not decide to terminate Guthrie's contract, Blunden could not have gone back to the office and worked with Guthrie. The answer which Mr Blunden gave, and the manner in which he gave it, showed that it was the product of thought over lunch. It is flawed. At that time, according to Blunden, Guthrie was not listening to his advice anyway. It would not have undermined his authority with Guthrie to have told him the truth, namely, that he was pressing Hartigan to remove him. Rather, if anything, it would have enhanced Blunden's position, by impressing on Guthrie the gravity of what Mr Blunden considered to be the situation. I do not accept Mr Blunden's proffered explanation in his cross-examination, which, as I have stated, bears all the hallmarks of ex post facto rationalisation.

157 On this issue, the dealings which Mr Blunden had with Mr Guthrie on 10 November and 11 November are particularly telling. In their evidence, Mr Guthrie and Mr Blunden gave different versions of the conversation which they had on the telephone at 7.00 pm on 10 November. In my view, a key to resolving that difference is constituted by an email which Mr Blunden sent to Mr Guthrie on the next day, 11 November, at 3.31 pm. The salient part of that email is as follows:

"As I said last night, I sincerely regret that it ends this way. Despite the reports this morning, there is no way that any personal tension (real or perceived) is responsible for this. I've made that clear to John Hartigan and anyone who asks. I won't dignify Andrew Rule's rubbish this morning with comment. Of course I do not harbour any ill feeling whatsoever towards you. On the contrary I wish you every happiness and success in the future. When the company decides to move in another direction, it simply happens. I imagine it will happen to me one day too ... ."

158 It is significant that the email does not contain any reference at all to the efforts which Mr Blunden had made to secure the dismissal of Mr Guthrie. Rather, on any view, the tenor of the email was to disclaim any role which had been publicly attributed to Mr Blunden in the dismissal. In his evidence in chief, Mr Blunden sought to reconcile the contents of the email, with his conduct before the dismissal, by differentiating between what he described as professional issues and personal issues which lay between himself and Guthrie. He said that he objected to the media portraying the matter as a personality issue. That explanation does not bear scrutiny. First, certainly from Mr Blunden's perspective, it is clear that there was a blurring of both professional and personality issues. Indeed, in cross-examination, when pressed, he did agree that there were personality issues between himself and Guthrie, but he still insisted that they had nothing to do with the dismissal. Secondly, and more significantly, that distinction does not provide a proper explanation for the tenor of the email, which clearly claimed to disassociate Mr Blunden from any participation in the decision that Guthrie be dismissed. Ultimately, in cross-examination Mr Blunden stated that he regretted not ascribing enough blame to himself in the email of 11 November for "driving the agenda".

159 It is clear then that in the email of 11 November Mr Blunden was not being frank, at all, with Mr Guthrie about the reasons for Mr Guthrie's dismissal. There was no reason why Mr Blunden would not, at that stage, have been candid with Mr Guthrie. Mr Guthrie was no longer an employee of News Limited. Thus, even if Mr Blunden's previous explanation was valid - namely that he did not wish to undermine his own authority with Guthrie by telling him that he had been advising Hartigan to dismiss him - that explanation would no longer justify Blunden's lack of candour with Guthrie in this regard.

160 That conclusion assists in determining which version of the conversation between Guthrie and Blunden, I should accept. Even without the aid of the email, I would have accepted Mr Guthrie's version of that conversation. Mr Blunden's evidence in relation to the conversation was less forthcoming. Indeed, even on Mr Blunden's version, the main tenor of the conversation was to deny that Hartigan had dismissed Guthrie because Blunden and Guthrie could not get on together. Mr Blunden sought to fudge that account, by claiming that he also said to Guthrie that it was "not only" him, but also a lot of other people involved in the decision. In my view, Mr Guthrie's version is to be preferred. He had a clear and coherent recollection of the conversation. I accept that when he spoke to Mr Blunden at 7.00 pm, Mr Blunden was concerned to disclaim any role in the dismissal of Guthrie, and, rather, to hint that there were other people involved in the decision, and not him. As I stated, that version is supported by Blunden's complete lack of candour with Guthrie, both before and after the dismissal, about Blunden's central role in obtaining the dismissal of Guthrie as editor of the Herald Sun.

161 In my view, the true nature of Mr Blunden's dealings with Mr Guthrie, in this respect, is revealed by a later passage in the cross-examination,[38] in which he stated that he endeavoured to support Guthrie's changes to the newspaper, but that he did not support Guthrie to Mr Hartigan. He said that he allowed Guthrie to make whatever changes he thought was appropriate, despite the fact that Blunden did not agree with the direction. He said: "I didn't feel it was appropriate to tell him (Guthrie) that I felt the paper was not energised. Mr Guthrie had a priority in fixing these feature sections. I let him do everything he wanted to do with the feature sections ... I endeavoured to support the changes he wanted to make to the paper". That answer comes closer to describing the true nature of the relationship between Blunden and Guthrie.

162 In light of that analysis, it is clear that, as confirmed by both Blunden and Hartigan, throughout at least 2008, Blunden was pressing Hartigan to dismiss Guthrie as the editor-in-chief of the Herald Sun. Blunden considered there to be a significant gulf in the relationship which he had with Guthrie, which made it untenable that that relationship continue. He felt that he had differences with Mr Guthrie both on a professional and personal basis, although I do not accept that the distinction between those two categories of differences is as clear cut as Mr Blunden sought to make out. I do accept that Mr Blunden may well have felt that Mr Guthrie was not taking the Herald Sun newspaper in the same direction as Mr Blunden had pursued. I make no finding at all as to whether that perception by Blunden was justified or not.

163 As I have already indicated, I am satisfied that Mr Hartigan's reason for dismissing Mr Guthrie was that which he stated to Mr Guthrie in the morning of 10 November, namely, the breakdown of the relationship between Guthrie and Blunden. I accept that Mr Blunden may have expressed dissatisfaction to Hartigan about specific aspects of Guthrie's conduct, and in particular in relation to some of the promotions in late 2008. However, I do not accept that Hartigan's views about, or perception of, Guthrie's conduct in that regard played any significant role in Hartigan determining to dismiss Guthrie. Rather, it would seem that Mr Hartigan was satisfied, on what he had heard from Mr Blunden, that there had been an irrevocable breakdown in the relationship between Blunden, as the managing director of the Herald and Weekly Times Limited, and Guthrie, as the editor-in-chief of the major publication of that company, the Herald Sun. I am satisfied that while Mr Hartigan may have been persuaded that there had been other shortcomings in Mr Guthrie's performance of his role, nevertheless the reason for his decision to dismiss Guthrie was his perception that the breakdown between Blunden and Guthrie was irreconcilable. In other words, in my view, notwithstanding whatever views Hartigan may have had about the capabilities of Guthrie, and the performance by Guthrie of his role as editor-in-chief of the Herald Sun, he would not have terminated Guthrie's appointment, if he had not been satisfied that there was such a profound breakdown in the relationship between Guthrie and Blunden.

164 In reaching those conclusions, I do not make any finding as to whether there was such a significant breakdown in the relationship between the two men. I accept that, for his part, Mr Blunden felt that that was so. However, on the other hand, I am also satisfied that that was not the perception of Mr Guthrie of the relationship. While, as I stated, Mr Guthrie tended, in his evidence, to underrate the gravity of the difficulties in his relationship with Blunden, I am also satisfied that that was the product, at least in part, of Mr Blunden's failure to inform Guthrie as to the extent to which he considered that the relationship had broken down. In other words, while Mr Blunden felt that there was a hopeless difference between himself and Guthrie in relation to the editorship of the Herald Sun, Mr Guthrie did not, at the time, perceive that the relationship was as bad as Mr Blunden thought it was. In this respect, Mr Guthrie's perception of their relationship is supported by a number of email messages between Blunden and himself, tendered in evidence, which gave the impression of a relatively cordial relationship between the two men.

165 Finally, before departing from the findings of fact on this issue, it is appropriate that I return, briefly, to the evidence by Mr Guthrie that, after the "Beverley Hills Cop" story was published by the Herald Sun in October 2008, Mr Blunden told him that Mrs Calvert-Jones was not happy with the story. As I have already stated, Mr Blunden denied making that statement to Mr Guthrie. It should be noted that there is no evidence, at all, that Mrs Calvert-Jones made any such statement to Mr Blunden. Nor is there any evidence as to the attitude which Mrs Calvert-Jones may have had, or may not have had, about the story. On balance, based on my general assessment of the credibility and reliability of the two witnesses, I prefer the account of Mr Guthrie. However, I do not consider that the episode was relevant to the issues in the case. Mr O'Bryan submitted that I should infer that Mr Blunden deliberately made the statement to Mr Guthrie at a time at which he knew that the termination of Mr Guthrie's appointment was imminent, in order to pre-empt any blame which might be attached to him for the decision. I would not be prepared to draw that inference. Although I accept that Mr Blunden made that statement to Mr Guthrie, it would be a matter of mere speculation as to why he did so. Accordingly, I am not prepared to draw the inference contended for by Mr O'Bryan.

166 With those findings in mind, I return to the question raised by the plaintiff's claim for damages for loss of opportunity, namely, whether, as a consequence of the defendant's wrongful repudiation of the contract of employment, the plaintiff lost an opportunity, of some value, to gain reappointment as the editor-in-chief of the Herald Sun in February 2010, or redeployment by the defendant in some other comparable position.

167 The decisions of the High Court in Commonwealth v Amann Aviation Pty Ltd[39] and Sellars v Adelaide Petroleum NL & Ors[40], make it clear that, in determining damages for loss of a valuable commercial advantage or opportunity, those damages are to be assessed by reference to the probabilities or possibilities of what would or might have happened, where such a determination is based on an hypothesis, whether past or future, as to what would have occurred or might occur, if the relevant breach of contract had not taken place.[41]

168 In the present case, two alternative hypotheses need to be considered, each on the assumption that Mr Hartigan had not determined, in November 2008, to terminate the plaintiff's appointment as editor-in-chief, so that the plaintiff remained in that position until the conclusion of the three year term on 18 February 2010. The first hypothesis involves a determination as to the question whether, at that time, Mr Hartigan would have reappointed Mr Guthrie to the role of editor-in-chief of the Herald Sun. That question is, in the event, entirely hypothetical. Thus, in accordance with the principles which I have just stated, it is to be determined by reference to the degree of possibility or probability that Mr Hartigan, on behalf of the defendant, would have agreed, in February 2010, to renew or extend the term of the plaintiff's appointment as editor-in-chief of the Herald Sun. In order to establish a claim for loss of opportunity on that basis, the plaintiff only needs to demonstrate that the prospect of his reappointment, at that time, would have been more than "speculative" in such hypothetical circumstances.[42] Thus, in order to succeed on this aspect of his claim, the plaintiff must prove, on the balance of probabilities, that if his appointment as editor-in-chief had not been terminated in November 2008, his prospects of reappointment to that position, in February 2010, would not have been "so low as to be regarded as speculative".[43] If the plaintiff is able to establish that he would have had such prospects of renewal of his position as editor-in-chief in February 2010, then his damages would be assessed by reference to the proportionate chance that he had of having his appointment so renewed.

169 In light of the authorities, to which I have already referred, I am not satisfied that the plaintiff would have had any prospect at all of having his appointment, as editor-in-chief of the Herald Sun, renewed in February 2010, if his appointment had not been terminated in November 2008. Indeed, I am well satisfied that he would have had no prospect at all of having his appointment renewed.

170 It is clear that, whether rightly or wrongly, by November 2008, Mr Hartigan was genuinely convinced that he had no other alternative, than to terminate Mr Guthrie's appointment as editor-in-chief of the Herald Sun, because he had by then become convinced that there was a profound breakdown in the relationship between Blunden and Guthrie which was irremediable. If, hypothetically, Mr Hartigan had, nonetheless, determined to let Mr Guthrie's contract run its course to February 2010, there is, in my view, no possibility that the situation, as perceived by Mr Hartigan, would have improved at all. It is clear that Mr Hartigan derived his perception of the relationship from Mr Blunden. It is also clear, beyond doubt, that by at least early February 2008, Mr Blunden, whether rightly or wrongly, was determined to secure the removal of Mr Guthrie as the editor-in-chief of the Herald Sun. I also accept that Mr Clarke, also, by November 2008, had become convinced that the situation was incapable of resolution. Thus, if the contract had run its course to February 2010, in my view the only perception which Mr Hartigan could have had, would have been that the position had not been resolved, and could not be resolved, save by the removal of Mr Guthrie as editor-in-chief of the Herald Sun. For those reasons, I do not accept that the plaintiff, by reason of the defendant's breach of contract, lost any valuable chance or opportunity of reappointment as editor-in-chief of the Herald Sun, when his contract expired on 18 February 2010.

171 The second basis, upon which the plaintiff made a claim for loss of opportunity was that, by reason of the defendant's breach, he was deprived of the opportunity to have his period of employment by the defendant, News Limited, renewed, by being redeployed by the defendant to another comparable position which was available within the defendant's group of companies. That alternative method, of making the plaintiff's claim for damages of a loss of opportunity, appeared to emerge only towards the concluding stages of the trial, no doubt as a result of the recognition by the plaintiff's advisers of the strength of the views of the defendant's witnesses, that the plaintiff's position as editor-in-chief of the Herald Sun had become entirely untenable.

172 The alternative approach, advanced by the plaintiff in this manner, in fact involved the resolution of two questions, on the assumption that the defendant had not terminated the plaintiff's appointment as editor-in-chief of the Herald Sun in November 2008. The first question is whether, in those circumstances, the defendant would have been inclined to agree to the redeployment of the plaintiff in February 2010. The second question is whether, in those circumstances, the defendant would have had a "comparable position" available within the defendant or its group of companies, which it might have offered to the plaintiff in February 2010.

173 The first question involves a past hypothetical situation, and thus, in accordance with the principles which I have already stated, is to be determined by reference to the possibilities or probabilities of the defendant being of a mind to have offered the plaintiff a comparable position within the defendant's group of companies. That question, based on a hypothetical situation, is difficult to resolve. However, as I have already found, I am satisfied that the reason why Mr Hartigan removed the plaintiff from the position of editor-in-chief of the Herald Sun in November 2008 was because of the breakdown, which Mr Hartigan perceived to have occurred in the relationship between Mr Guthrie and Mr Blunden by that time.

174 That finding is relevant, because it does not involve a finding that Mr Hartigan, by then, had formed the view that Mr Guthrie was unsuitable to hold the position of editor of another publication of the defendant, or a comparable position with the defendant. That conclusion is supported by the fact that, in November 2008, Mr Hartigan was prepared to attempt to make available to Mr Guthrie another position within the defendant or its group of companies. Mr Hartigan's offer to do so on 10 November may, no doubt, have been prompted, at least in part, by feelings of sympathy he had for Mr Guthrie, and, perhaps even some degree of guilt, by reason of having induced Mr Guthrie to leave his home in Sydney, uproot his family to Melbourne, and then have his employment in Melbourne terminated. Nevertheless the fact that Mr Hartigan made that offer is some evidence that he may have had the state of mind that, in his eyes, Mr Guthrie was not, as such, entirely unacceptable as a potential candidate to hold the position of editor, or another comparable position, in the News Limited group of companies. In cross-examination,[44] Mr Hartigan stated that if (in November 2008) Mr Guthrie had wanted to explore ways to work within the News Limited "family" in Victoria, there were then many ways that that could have happened, without the plaintiff having any form of responsibility to Mr Blunden. That part of Mr Hartigan's evidence reinforces my conclusion that there was at least a prospect, in February 2010, that Mr Hartigan, on behalf of the defendant, may have made an offer of comparable employment to the plaintiff, if the plaintiff had remained as editor-in-chief of the Herald Sun until that date. As I have already stated, Mr Guthrie had an impressive curriculum vitae, and, in December 2006, Mr Hartigan had formed a very favourable impression of his capabilities as an editor.

175 On the other hand, notwithstanding the matters to which I have just adverted, I would not be satisfied that Mr Hartigan probably would have made such an offer to Mr Guthrie, if a comparable position were available. As I have observed, the position was somewhat different in November 2008, when Mr Hartigan properly felt sympathy for Mr Guthrie as a result of his predicament. It must be borne in mind that by November 2008, Mr Hartigan had been consistently receiving reports from Mr Blunden which were adverse to Mr Guthrie. If Mr Guthrie's appointment as editor-in-chief had continued until February 2010, I have no doubt that those reports would have continued to have been made, if not with greater force and vehemence. In those circumstances, it is unlikely that, in February 2010, Mr Hartigan would have been prepared to make any further offer to the plaintiff of a comparable position within the News Limited group of companies. However, while I consider that to be improbable, there is still a realistic possibility that Mr Hartigan might have been minded to make such an offer to the plaintiff.

176 The question whether the plaintiff would have accepted such an alternative position is, equally, hypothetical. By February 2010 he and his family were well ensconced in Melbourne. The evidence before me does not enable me to express any useful conclusion as to the proportionate chance of Mr Guthrie accepting an alternative position in February 2010. However, if the position was truly comparable with that of editor-in-chief of the Herald Sun, in my view the prospects of Mr Guthrie accepting any such offer would have been more than speculative.

177 The other question which arises, in respect of this alternative aspect of the claim for damages for loss of opportunity, is whether, at February 2010, the defendant would have had available a comparable position to offer to the plaintiff within its organisation. By its nature, that question is not hypothetical. It involves a question of fact about a past situation.[45] In such a case, it is not a question of determining a contingency, and, as such, the issue is one of fact, not "prophecy".[46] On this aspect of the case, no evidence was adduced at all as to what, if any, comparable positions the defendant had available to offer to the plaintiff in February 2010. The evidence is entirely silent on that matter. In the passage of Mr Hartigan's evidence, to which I have already referred, Mr Hartigan did say that, if the plaintiff had been interested in November 2008, he would then have explored ways to enable him to continue to work within the News Limited group of companies in Victoria. In that connection, he referred to the possibility that he might have been able to find work for the plaintiff, at that time, with the Leader Newspapers. However, that evidence did not indicate whether any such position was then available, let alone whether such a similar position was available in February 2010. Nor did Mr Hartigan indicate what position would or might have been available, in November 2008, to offer to Mr Guthrie.

178 Accordingly, any conclusion which I might reach as to the availability of a comparable position in the News Limited group of companies to offer to Mr Guthrie in February 2010 would, of necessity, be based on pure speculation. Certainly, I could not be satisfied, on the balance of probabilities, that such a position was available in February 2010. Indeed, there is no evidence that there was even any chance of such a position being available to be offered to Mr Guthrie in February 2010.

179 It follows from the foregoing that the principal claim by the plaintiff for damages, for loss of opportunity to obtain a renewal of his contract, or re-deployment to a comparable position in February 2010, must fail. Accordingly, it is necessary for me to consider the alternative claim made by the plaintiff for damages.

Alternative claim for damages: plaintiff's entitlement to a termination payment as at 19 February 2010

180 That alternative claim by the plaintiff is for damages consisting of a termination payment, to which he would have been entitled under clause 22.4 of the contract, if he had remained in employment with the defendant to 18 February 2010. The plaintiff claimed that as a result of the wrongful termination by the defendant of his employment in November 2008, he was thereby prevented from completing his contract of service with the defendant to February 2010, and thus becoming entitled to the termination payment at that time.

181 The claims so made by the plaintiff arise from part of clause 22.4, which I have quoted earlier in this judgment.[47] As I have already discussed, the first paragraph of clause 22.4 provides that if the contract was not renewed, then the defendant may re-deploy the plaintiff to a comparable position which is available in the company. It further provides that if the company was unable to obtain an offer of a comparable position for the plaintiff, the company would terminate his employment. The second paragraph of clause 22.4 then provides:

"In these circumstances, in addition to your entitlements under clause 22.3, you will receive a termination payment which is inclusive of notice and redundancy/severance pay. In determining an appropriate termination payment, the Company will take into account any applicable legislative requirements and length of service with the Company."

182 The parties, in their submissions, adopted different constructions of the part of clause 22.4, to which I have just referred. Mr O'Bryan submitted that the phrase "which is inclusive of notice and redundancy/severance pay" should be construed to mean that the termination payment, payable by the defendant to the plaintiff, would include (at the least) payment in lieu of notice together with redundancy/severance pay. On the other hand, Mr Attiwill, who made the submissions of the defendant relating to damages on this aspect of the case, submitted that the word "inclusive" meant that the plaintiff would receive a termination payment, which would thus extinguish any rights the plaintiff might have to payment in lieu of notice and redundancy and severance payments. He submitted that the amount of such termination payment was to be determined by the defendant, at its discretion, upon the termination of the plaintiff's employment.

183 The difference between the positions taken by the parties arose out of the question of the meaning of the adjective "inclusive".

184 It is useful to consider, first, the ordinarily understood meaning of the adjective "inclusive". In ordinary everyday use, the word "inclusive" is generally understood to connote that which includes or comprehends a particular fact or matter. Thus, a price, which is stated to be "inclusive of goods and services tax", is a price which is deemed to include, and which comprehends, an allowance for that tax. In a legal dispute, an offer to compromise an action, which is expressed as a particular monetary sum "inclusive of costs", is generally understood to comprehend, within the offered sum, an allowance for the costs of the offeree.

185 That common meaning of "inclusive" is consistent with the definitions of it in the Oxford English Dictionary and in the Macquarie Dictionary. The latter defines "inclusive" to mean:

"(1) including in consideration or account, as the stated limit or extreme (for example from 6 to 10 inclusive);

(2) including a great deal, or including everything concerned; comprehensive;

(3) that which includes; enclosing; embracing."

186 In those senses, it can be seen the adjective "inclusive" contains two interrelated concepts. Something which is "inclusive" is taken to include a particular factor in it, so as to exclude that factor from further consideration. Thus, it is clear that a termination payment, under clause 22.4, would preclude any further entitlement of the plaintiff to claim payment in lieu of notice and redundancy and severance payments. However, and in addition, the termination payment would be taken to assume within it an allowance for both of those payments. In other words, the payment excludes any further entitlement to payment in lieu of notice, and redundancy/severance payment, because it would comprehend, within it, an allowance for each of those entitlements.

187 Clause 22.4 does not make it entirely clear as to how the termination payment is to include, within it, payment in lieu of notice and redundancy/severance pay. However, two points are relevant. First, clause 22.4 assumes and acknowledges, at least implicitly, an entitlement of the plaintiff to notice pay and redundancy/severance pay on the termination of his employment. The express reference in clause 22.4, to those payments, implies an assumption that the plaintiff would be entitled to them on the termination of his contract after three years. That proposition is supported by the third sentence of the second paragraph, which requires the defendant to take into account applicable legislative requirements. The concepts of notice pay and termination pay are relatively common in the area of industrial relations and industrial law. Indeed, they are now both the subject of express provisions in the Fair Work Act 2009. In that way, in my view, clause 22.4 acknowledges, at least implicitly, an entitlement of the plaintiff, upon termination of his contract after three years, to notice pay and redundancy/severance pay, which are to be catered for in the termination payment specified by clause 22.4.

188 The second relevant point is that, in my view, properly construed, clause 22.4 does not leave the defendant at large to determine, at its discretion, the composition or amount of the termination payment. Clause 22.4 is not expressed in terms of a discretion. To the contrary, it expressly refers to notice pay and to redundancy/severance pay, and the third sentence of the second paragraph of clause 22.4 is expressed in mandatory terms, in prescribing what the defendant must take into account in determining the appropriate termination payment. Moreover, it is unlikely that one party to a negotiated commercial contract would intentionally leave himself entirely at the discretion of the other party, in determining an important entitlement under the contract. Thus, contrary to the submission of Mr Attiwill, I do not consider that clause 22.4 reposed in the defendant a discretion to determine the composition or the quantum of the relevant termination payment. Rather, as I have indicated, in my view, in determining that payment, the defendant was required to include within it an appropriate notice payment and an appropriate redundancy/severance payment.

189 That construction, of the second paragraph of clause 22.4, is supported by the third paragraph, which provides that if the defendant does make an offer of a comparable position to the plaintiff, and the defendant rejects that offer, the plaintiff will only receive the payments due under clause 22.3. Thus, clause 22.4 recognises and intends that the plaintiff shall be in a more favourable position, if the defendant is unable to provide to him a comparable position, than if the defendant has made an offer of such a position to the plaintiff, which the plaintiff has rejected. That consideration strengthens the submission by the plaintiff that the termination payment, referred to in the second paragraph of clause 22.4, was to include an appropriate payment in lieu of notice and a redundancy/severance payment.

190 Furthermore, that construction of clause 22.4 is consistent with, and supported by, the scheme of the contract, and the background circumstances in which it was made. The contract was designed to provide the plaintiff with some security of tenure for three years, with a prospect of the plaintiff being re-employed or redeployed at the conclusion of that period. The generous relocation payments in the contract recognised that the move of the plaintiff and his family from Sydney to Melbourne was a matter of substantial consequence to them. It is consistent with those provisions, and the scheme of the contract, that it should have provided an appropriate measure of financial protection to the plaintiff, should, at the end of the three year period, he not be re-employed by the defendant. In those circumstances, it is understandable that the parties would have comprehended, within the proposed termination payment, an appropriate payment in lieu of notice, and an appropriate redundancy/severance payment.

191 For those reasons, I accept the submission made by Mr O'Bryan that the phrase, "which is inclusive of notice and redundancy/severance pay", in clause 22.4 should be construed to mean that the termination payment, payable by the defendant to the plaintiff in February 2010, would have included a payment in lieu of notice, together with a redundancy/severance payment.

192 Ordinarily, the question of notice, or of payment in lieu of notice, only arises where a contract of employment is not for a fixed term. In such a case, the law implies a term that the contract of employment may only be determined by reasonable notice by one party to the other, or, in the case of termination by the employer, the payment of remuneration to the employee for that period in lieu of the provision of such notice. However, clause 22.4 specifically provides for a termination payment to be constituted by "notice and redundancy/severance pay". As I have stated, it is implicit, in that part of clause 22.4, that if the contract of employment of the plaintiff was not renewed at the end of its term, and if the defendant did not redeploy the plaintiff in a comparable position at that time, the defendant would make a payment to the plaintiff, which covered a notional period of notice of termination, and which also included an appropriate redundancy/severance payment.

193 That construction of clause 22.4 is supported by the structure of the written agreement between the parties. In particular, clause 4 and clause 22.4 clearly envisaged the prospect that the plaintiff might be re-employed by the defendant, or redeployed in a comparable capacity, at the expiration of the three year term. As I have stated, it is relevant that the plaintiff and his family had relocated to Melbourne in order to commence his duties under the contract. If he were not re-engaged, after three years, by the defendant in the same or a comparable position, it was reasonably foreseeable by the parties that the plaintiff may have some difficulty in gaining alternative suitable employment. Those circumstances support a construction of clause 22.4 that the termination payment, therein referred to, was to consist of an appropriate payment in lieu of notice, as well as a redundancy/severance payment.

194 The parties took substantially different positions in respect of the length of the period of such notice contemplated by clause 22.4, in lieu of which the defendant was required to make a payment of remuneration to the plaintiff. Mr O'Bryan submitted that the appropriate period of notice, in respect of which the plaintiff should have been paid remuneration, was the period of twelve months. In support of that submission, he drew my attention to a number of authorities, which have held that such a period of notice is appropriate, in respect of employees who occupy high ranking positions with significant responsibility.

195 On the other hand, Mr Attiwill submitted that the appropriate period of notice is five weeks. He pointed out the authorities, to which Mr O'Bryan referred me, concern cases in which the employee was not engaged on a fixed term contract. Mr Attiwill referred me to the relevant provisions of the Fair Work Act 2009, which came into operation in January 2010. In particular, he drew my attention to the minimum periods of notice fixed by s 117(3) of the Act, which, in the case of Mr Guthrie, would be five weeks notice.

196 It is clear from the cases that the following principles apply in determining the question of the length of notice, which should be provided to an employee, who has not been retained on a fixed term contract:

(1) The appropriate length of the "reasonable notice" (or period in lieu of which payment should be made) is determined at the time at which notice of termination of the employment is given, and not when the contract of employment was entered into.[48]

(2) In determining what is a reasonable period of notice, it is important to bear in mind the primary purpose served by the giving of such notice, namely, to enable the employee to obtain new employment of a similar nature.[49]

(3) Factors which are taken into account in order to determine the appropriate length of notice include matters pertinent to the nature of the employment itself, and also matters personal to the employee. Thus, they include the level of responsibility assumed by the employee, the high grade of his appointment, the importance of his position, the size of his salary, and industry practice. They also include matters personal to the individual employee, including the length of the employee's service with the defendant, the employee's age, the nature of the employment which the employee left, or gave up, in order to serve the present employer, and the expected period of time it would take for the employee to find suitable alternative employment.[50]

(4) Damages arising from the failure of the employer to give adequate notice, or to provide adequate payment in lieu of such notice, are calculated in gross monies, and not net of taxation.[51]

197 In determining the applicable period of notice, I do not consider that much guidance is obtained from the Fair Work Act 2009, upon which Mr Attiwill relied. Section 123(1) provides that Division 11, in which s 117 is located, does not apply to an employee who is employed for a specified period of time. Thus, s 117 would not have applied to Mr Guthrie's contract, in February 2010. Further, and in any event, s 117(3) only provides for the "minimum period of notice" to be provided to an employee. The Fair Work Act applies to a wide variety of employees. By prescribing the minimum period of notice, the Act does not, it seems to me, cast light on the appropriate period of notice, which should be given to an employee in Mr Guthrie's position. In such a case, the minimum period provided by the Act, namely five weeks, would have been wholly inadequate, in light of the factors which are involved in the assessment at common law.

198 In my view, if the contract of service of the plaintiff was of indefinite duration, then, applying the principles to which I have already referred, he would have been entitled to a period of twelve months' notice of termination of his agreement. A number of factors lead to that conclusion. In particular, the plaintiff's employment with the defendant involved him working at a particularly high level in the defendant's organisation, and assuming a high degree of responsibility. He left a position of responsibility, as editor of the Weekend Magazine of the Australian newspaper, to commence his duties with the Herald Sun. By 2010, he would have been employed by the defendant for a period of six years. The plaintiff was employed on a substantial salary, indicating the high grade of his employment. Although I did not receive evidence of the plaintiff's age, it is safe to assume that he is in his late 50's. The plaintiff was at a stage of life, and at a level in his industry, when, I would expect, it might be difficult for him to obtain suitable alternative employment of a similar nature to that which he performed with the defendant. In those circumstances, if the plaintiff had been employed on a contract of indefinite duration, then, in my view, the defendant would have been required to give the plaintiff twelve months' notice of termination of that contract (or pay him twelve months' remuneration in lieu of that notice), in order to fulfil its obligations pursuant to the implied term to that effect.

199 That conclusion needs to be modified, however, by a particularly salient feature in this case. The plaintiff's contract with the defendant was not for an indefinite period, but for three years. Thus, unlike the employee who is engaged for an indefinite period of service, the plaintiff was provided some security of employment for that period. Further, he knew, in advance, when that secure period of employment would end. Clause 4 of the contract made specific provision for the parties to enter into negotiations about the renewal of his contract, six months before its expiration. Thus, it was envisaged that, before the expiration of the plaintiff's term, he and the defendant would each have advance notice as to whether the plaintiff was to continue in the same position with the defendant, in a comparable position, or not at all. Those two circumstances, in my view, operate to modify the period of notice, which otherwise the defendant would have been required to provide to the plaintiff, if he had been hired by the defendant for an indefinite period. Bearing in mind, first, the fact that the plaintiff did have the security of three years contracted employment with the defendant, and, secondly, the fact that the contract envisaged that the plaintiff would have had advance notice, before 18 February 2010, whether his contract of employment was to be renewed, I do not consider that the notice payment, referred to in clause 22.4, would encompass the complete period of twelve months. In my view, taking those matters into consideration, and applying the principles to which I have referred, an appropriate period of notice, as contemplated by clause 22.4, would be a period of eight months.

200 The other entitlement, referred to in clause 22.4 of the agreement, is described as "redundancy/severance pay". Mr O'Bryan submitted that that payment was separate and additional to the notice payment referred to in clause 22.4. In support of that proposition, he referred me to the judgment of Hely J in Reynolds v Southcorp Wines Pty Ltd & Anor[52]. Mr Attiwill did not make any submission to the contrary on that point. In particular, he did not contend that if I do not accept his submissions concerning the meaning and effect of the word "inclusive" in clause 22.4, I should treat notice payment and redundancy/severance payment as either the same, or as overlapping in any respect.

201 In my view, Mr Attiwill was correct in taking that position on behalf of the defendant. In Reynolds v Southcorp Wines[53], Hely J stated:

"Where a contract of employment is terminable by notice, any requirement to make a severance payment is in addition to the requirement to provide notice of termination - the two are distinct ... ."

202 In support of that proposition, Hely J cited the decision of Von Doussa J, of the Industrial Relations Court, in Fryar v System Services Pty Ltd[54]. There, Von Doussa J differentiated between notice payment and severance payment as follows:

"A period of notice is to give an employee the opportunity to adjust to the change in circumstances which is to occur and to seek employment ... The period may be worked out ... and it often is, as it is recognised that the employee's prospects of obtaining other employment may be better if the search is undertaken while the employee remains in employment ... A severance payment, however, is intended to provide a payment as compensation for the loss of non-transferable credits and entitlements that have been built up through length of service such as sick leave and long service leave, and for inconvenience and hardship imposed by the termination of employment through no fault of the employee ... The inconvenience and hardship includes the disruption to an employee's routine and social contacts and the competitive disability to long term employees arising from opportunities foregone in the continuous service of the employer ... ."[55]

203 In Haley v Public Transport Corporation of Victoria[56], Ashley J (as his Honour then was) also gave consideration to the character and nature of the termination payment made in that case to the plaintiff, in order to determine whether it should be offset against the plaintiff's claim for wrongful dismissal. His Honour held that, on the facts of that case, the particular termination payment made to the plaintiff was of the same character as that described by Von Doussa J in Fryar's case, and accordingly his Honour held that it should not be offset against the plaintiff's claim for damages for wrongful dismissal.

204 Thus, it would seem that the common ground between the parties on this aspect is correct, and that the notice payment and redundancy/severance payment, referred to in clause 22.4, are separate payments which are additional to each other.

205 The parties also put different positions to me concerning the amount of the termination payment referred to in clause 22.4. Mr O'Bryan submitted that that payment should be calculated by multiplying the plaintiff's gross remuneration, as at February 2010, by 24 weeks, which would allow four weeks gross remuneration for each of the six years in which the plaintiff served the defendant. On the other hand, Mr Attiwill submitted that the appropriate termination payment should be calculated by reference to the period of weeks specified in s 119(2) of the Fair Work Act, which, in the case of Mr Guthrie, would be eleven weeks.

206 Again, the period, specified in the Fair Work Act, is the minimum period, which is specified by way of general application to a wide variety of employees to whom the Act applies. In my view, given the high level of the plaintiff's employment, the responsibility which he bore in carrying out his duties with the defendant, particularly during the time of his editorship of the Herald Sun, and the intangible inconvenience which the plaintiff might experience, in transferring his employment on the termination of the contract, it would be appropriate to allow four weeks' remuneration for each year of service, in calculating the appropriate termination payment under clause 22.4. In this respect, I note that in its letter to the plaintiff dated 10 November 2008, the defendant proposed a severance payment based (then) on four weeks per year of service by the plaintiff with the defendant. Accordingly, in calculating the plaintiff's termination payment, I consider that the appropriate multiplier is a factor of twenty four weeks, and not, as contended on behalf of the defendant, a factor of eleven weeks.

207 For the purposes of determining the appropriate payment in lieu of notice, Mr O'Bryan submitted that the appropriate annual remuneration of the plaintiff, as at 19 February 2010, should be calculated in the sum of $844,258. That amount was calculated by reference to two primary components namely:

(a) Remuneration as at 10 November 2008 - $698,915;

(b) Plaintiff's expected entitlements during the putative period of notice after 18 February 2010:

(i) Restrictive stock units (expected as at September 2010) $33,376.96;

(ii) Expected increase in salary as at July 2010 $14,125;

(iv) Long service leave for the putative period of notice $12,349.

208 Mr Attiwill took issue with each of the components, to which I have just referred. The first component - remuneration as at 10 November 2008 - included, on Mr O'Bryan's reckoning, the value of the relocation costs provided for in the original contract between the plaintiff and the defendant. By February 2010, the plaintiff would have been well settled in Melbourne with his own home. I agree with Mr Attiwill that that figure should be deducted from the calculation of the remuneration as at February 2010. Further, the calculation of the plaintiffs' remuneration at February 2010 also included a component of annual leave, comprising $47,308. I agree with Mr Attiwill that that amount also should be deducted. With those adjustments, the value of the plaintiff's remuneration package, as at February 2010, would be the sum of $514,807.

209 I also agree with Mr Attiwill that each of the four items, claimed by the plaintiff in respect of the second component, namely the entitlements during the putative period of 18 February 2010, would not form part of any calculation of the payment to be made to the plaintiff in lieu of notice. There is no evidence that the plaintiff would have qualified for restrictive stock units at September 2010. Nor does the evidence enable to me infer what increase, if any, would have been gained by the plaintiff in his salary, in July 2010. The claim for annual leave, and long service leave, would be a "double dip", given that those payments are only made if the employee does not take the leave. Furthermore, none of those four items formed part of the plaintiff's remuneration as at February 2010. They remained to be earned during the ensuing twelve months. By ordinary principles, in lieu of appropriate notice, the plaintiff was entitled to payment for the applicable period of notice (which I find to be eight months) at the rate of his remuneration as at February 2010, and not at some future date. Thus, I agree with Mr Attiwill that the appropriate rate of remuneration, to be applied for this purpose, was the annual remuneration rate of $514,807. Based on that figure, the appropriate payment in lieu of eight months' notice amounts to the sum of $343,205.

210 Using the same remuneration rate ($514,807), pursuant to clause 22.4, the plaintiff would also be entitled to a termination payment (for the allowed period of 24 weeks) of $237,603. Thus, if the defendant had not breached the employment contract which it had with the plaintiff in November 2008, the plaintiff would have been entitled to a payment, at 18 February 2010, pursuant to clause 22.4, of $580,808.

211 The plaintiff's claim in this respect is that, by reason of the wrongful termination of his employment in November 2008, he was prevented from completing his contract of employment with the defendant, and thus becoming entitled to the payment to which I have just referred, namely $580,808. It has not been put to me that any contingency had occurred, or would have occurred, between November 2008 and February 2010, which would have prevented the plaintiff from completing his employment with the defendant in February 2010. Thus, in my view, although the award of damages on this basis does, in a sense, involve postulating a hypothetical past situation, nevertheless nothing has been put to me which would indicate any realistic possibility that that hypothetical situation might not have come to pass, had it not been for the wrongful termination of Mr Guthrie's appointment in November 2008. Accordingly, in my view, the plaintiff is entitled to damages calculated, in that way, in the sum of $580,808.

Plaintiff's alternative claim: duty of good faith

212 In light of those conclusions, I turn, briefly, to the alternative claim for damages made by the plaintiff. As I indicated earlier in these reasons, the plaintiff made an alternative claim, in the event that I should conclude that the defendant did have the right, in November 2008, to unilaterally terminate the plaintiff's employment. It was pleaded, and submitted, on behalf of the plaintiff, that, if the defendant did have such a right to terminate the plaintiff's employment unilaterally, in exercising that right in November 2008, the defendant breached an implied term of the contract that the defendant would not, without proper or reasonable cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the plaintiff and the defendant. In essence, the plaintiff claimed that the defendant, in exercising such unilateral right of termination, breached an implied obligation by the defendant that it act in good faith towards the plaintiff as its employee.

213 In light of my conclusion, that the defendant did not have a right to unilaterally terminate the plaintiff's employment in November 2008, it is not necessary for me to reach any conclusion about the alternative claim so asserted by the plaintiff. However, this aspect of the case was the subject of some detailed submissions, particularly on some questions of law involved in it. In deference to those submissions, and in the event that this matter is the subject of appeal, I shall deal with this issue in short compass.

214 Mr Houghton submitted that it is not established that there is an overall duty of good faith in a contract of employment of the type entered into between the plaintiff and the defendant. Further, and in any event, he submitted that any such obligation of good faith, in general, would not be implied so as to affect the express right of an employer to dismiss an employee. Mr Houghton also submitted that if there was such an obligation of good faith affecting the unilateral right of the defendant to dismiss the plaintiff in this case, no such want of good faith has been proven by the plaintiff. Finally, he submitted that, if the plaintiff has established a breach of good faith in respect of his dismissal as editor-in-chief of the Herald Sun, the plaintiff has failed to prove that any such breach has caused him loss and damage.

215 The question as to whether, in a contract of employment, there is to be implied an obligation of good faith, and, if so, the impact of that obligation on the parties' rights to terminate such a contract, has been the subject of much discussion in the cases. There is authority for the proposition that such an obligation may be implicit in a contract of employment.[57] I note however that there are some cases, in which the view had been expressed, albeit obiter dictum, that no such obligation may be implied in a contract of employment.[58] Further, it has been held that any such obligation would not be implied, so as to affect a right of termination of a contract expressly provided by the contract itself or under statute.[59]

216 It is not necessary for me to enter into the debate. Indeed, in view of the conclusions which I have reached that the defendant was not entitled to terminate the plaintiff's employment in November 2008, it is undesirable that I express a concluded view on the questions of law referred to in the authorities. However, if, (contrary to my decision) the defendant did have a legal right under the contract to terminate the plaintiff's employment in November 2008, and assuming (without deciding) that there was an implied term in the contract that the defendant would only exercise that right in good faith, in my view the evidence does not establish, on the balance of probabilities, any breach of that duty by the defendant, and in particular, by Mr Hartigan, who was responsible for making and implementing the decision to terminate the plaintiff's employment as the editor-in-chief of the Herald Sun. As I have already found, in reaching that decision, Mr Hartigan was substantially influenced by the constant reports to him by Mr Blunden that the relationship between the plaintiff and Mr Blunden had become unworkable. Mr Hartigan, notwithstanding the consistent imprecations by Blunden, had delayed for a substantial period, before finally deciding to terminate the plaintiff's employment. It might have been desirable for him to have previously told the plaintiff that Blunden had been pressing for his dismissal, so as to impress on the plaintiff the gravity of the situation. However, I do not consider that his failure to do so would be described, in any relevant sense, as a lack of good faith. As I have already found, Mr Hartigan reached and implemented the decision to terminate the employment of the plaintiff, because he genuinely considered that the relationship between the plaintiff and Blunden had irrevocably broken down. In my view, the plaintiff has not demonstrated any absence of good faith on behalf of Mr Hartigan in doing so.

217 Further, if, (contrary to the above) there had been demonstrated to be an absence of good faith on behalf of Mr Hartigan, it is not demonstrated that that lack of good faith has caused the plaintiff any loss and damage. It would seem, from the submissions of Mr O'Bryan, that the lack of good faith, alleged by the plaintiff, was the failure by Mr Hartigan to give prior warning to the plaintiff that Blunden had been advocating his dismissal as editor-in-chief of the Herald-Sun. In my view, it is not demonstrated that if Mr Hartigan had warned the plaintiff of Mr Blunden's attitude to him, that would have made any difference to the outcome. Mr Guthrie did not give evidence that, if Mr Hartigan had given him any such warning, he would have acted differently. Indeed, Mr Guthrie himself did not perceive that the problems between himself and Blunden were anywhere near as serious as Mr Hartigan perceived them to be. I am not satisfied that if Mr Hartigan had discussed the matter with Mr Guthrie, the latter would have been able to bring about an appropriate change in the position between himself and Blunden, and thus would have avoided Mr Hartigan reaching the decision that he should dismiss Mr Guthrie from his position as editor-in-chief of the Herald Sun. Accordingly, I am not satisfied that even if there was a breach by the defendant of any duty of good faith, that breach played any relevant causative role in the damage sustained by the plaintiff.

218 Finally, in his final address, Mr O'Bryan submitted that, if I should conclude that the defendant was entitled to terminate the plaintiff's employment in November 2008, nevertheless the defendant had failed to pay to the plaintiff a number of entitlements which had accrued to him under his contract. In effect, Mr O'Bryan sought to advance, on behalf of his client, a claim in debt against the defendant. That claim was not contained in the pleadings, and had not been foreshadowed in his opening. Nor had it been the subject of any evidence. In those circumstances, I upheld Mr Houghton's objection to the late agitation of it by Mr O'Bryan.

219 For the reasons which I have set out in this judgment, I have reached the following conclusions:

(1) The defendant breached the plaintiff's contract of employment by terminating his appointment as editor-in-chief of the Herald Sun newspaper on 10 November 2008.

(2) I am not satisfied that, as a consequence of that breach of contract by the defendant, the plaintiff suffered a loss of a valuable opportunity to obtain a renewal of his contract of employment with the defendant on 18 February 2010, or to be re-deployed by the defendant, at that date, to a comparable position in the News Limited group of companies.

(3) I am satisfied that, as a result of the breach by the defendant of the contract of employment of the plaintiff, the plaintiff suffered loss and damage, consisting of the termination payment to which he would have been entitled under clause 22.4 of the contract, if the defendant's wrongful breach of the contract had not prevented the plaintiff completing his term of service with the defendant.

(4) I assess the damages, which were thereby caused to the plaintiff, in the sum of $580,808.

(5) In light of the first conclusion, summarised above, it is not necessary for me to determine whether the defendant breached any duty of good faith it owed to the plaintiff in terminating the contract of employment of the plaintiff. However, if such an obligation of good faith was implied in the contract between the plaintiff and the defendant, I am not satisfied that the defendant acted in breach of any such obligation to the plaintiff.

220 Accordingly, there shall be judgment for the plaintiff in the sum of $580,808. I shall hear the parties on the question of interest and costs.

[1] BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40; (1977) 52 ALJR 20, 26; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1977) 144 CLR 597, 605-6.

[2] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 352 (Mason J); Prenn v Simmons [1971] 1 WLR 1381, 1384-1385 (Lord Wilberforce).

[4] [2008] VSC 223, [74].

[5] Concut Pty Ltd v Worrell & Anor [2000] HCA 64; (2000) 176 ALR 693, 699 (Gleeson CJ, Gaudron and Gummow JJ); [2000] HCA 64, [23]; Gibert-Ash (Northern) Ltd v Modern Engineering Bristol Ltd [1974] AC 689, 717-718 (Lord Diplock); Novawest Contracting Pty Ltd v Taras Nominees Pty Ltd [1998] VSC 205, [27] (Gillard J).

[6] (1992) 29 NSWLR 28.

[7] [1991] HCA 54; (1991) 174 CLR 64.

[9] [1999] FCA 593.

[11] (2000) 97 IR 66; [2000] FCA 414.

[13] [2006] NSWCA 253; (2006) 67 NSWLR 73.

[17] [1848] EngR 135; (1848) 1 Ex 850, 855.

[18] Above, 85 (Mason CJ, Dawson J); 104 (Brennan J); 127 to 127 (Deane J); 154 (Gaudron J).

[20] 86 to 90 (Mason CJ, Dawson J), 105 to 108 (Brennan J), 126 (Deane J), 156 (Gaudron J).

[21] 92, 94 (Mason CJ, Dawson J), 104, 111 to 112 (Brennan J), 130 to 131 (Deane J), 143 to 145 (Toohey J).

[22] [1994] HCA 4; (1994) 179 CLR 332, 349; see also Tabet v Gett [2010] HCA 12, [47] (Gummow ACJ), [123]-[124] (Kiefel J).

[23] See also GT Corporation Pty Ltd v Amare Safety Pty Ltd [2008] VSC 143, [478]-[481] (Robson J).

[26] See also The Commonwealth v Amann Aviation Pty Ltd (above), 91 to 92 (Mason CJ, Dawson J), 99 (Brennan J); European Bank Ltd v Evans of Robb Evans Associates (2010) 264 ALR 1; [2010] HCA 6, [13].

[27] See for example Coal Cliff Collieries Pty Ltd & Anor v Sijehaama Pty Ltd & Anor (1991) 24 NSWLR 1, 26 to 27 (Kirby P); United Group Roll Services Limited v Rail Corporation New South Wales [2009] NSWCA 177, [62] and following (Allsop P); Con Kallergis Pty Ltd v Calshoni Pty Ltd (Unreported, Court of Appeal, 25 March 1997) BC 9700880, at 20 and following (Hayne JA); compare Walford v Miles [1992] 2 AC 128, 138 (Lord Ackner).

[40] [1994] HCA 4; (1994) 179 CLR 332, 349.

[41] See also, for example, Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd [2007] VSCA 309, [26], [30], [51], [56]; McCrohn v Harith [2010] NSWCA 67, [97]-[98] (McColl JA).

[42] Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, 642 to 643 (Deane, Gaudron and McHugh JJ); Sellars v Adelaide Petroleum NL, above, 350 (Mason CJ, Dawson, Toohey and Gaudron JJ).

[43] Sellars v Adelaide Petroleum Pty NL, above, 355 (Mason CJ, Dawson, Toohey and Gaudron JJ), 367 (Brennan J); Longden v Kenalda Nominees Pty Ltd [2003] VSCA 128, [5]-[6] (Phillips JA); [34] (Chernov JA); Heenan v Di Sisto [2008] NSWCA 25, [28]-[32] (Giles JA); Hendricks v McGeoch [2008] NSWCA 53 [88] (Basten JA); Tabet v Gett [2010] HCA 12, [137] (Kiefel J).

[45] Malec v J C Hutton Pty Ltd (above), 639 to 640 (Brennan and Dawson JJ).

[46] Willis v Commonwealth [1946] HCA 22; (1946) 73 CLR 105, 109 (Latham CJ), 116 (Dixon J); Re Bradberry [1943] Ch 35, 45 (Uthwatt J); Bwllfa & Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Water Works Co [1903] AC 426, 428-429 (Lord Halsbury LC), 431 (Lord Macnaughten); Kizbeau Pty Ltd v W.G. & B Pty Ltd [1995] HCA 4; (1995) 184 CLR 281, 293-295, HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640, 658-9.

[48] Ikin v Danish Club Dannebrog Inc [2001] VSCA 123, [26]; Quinn v Jack Chia (Australia) Limited [1992] VicRp 37; [1992] 1 VR 567, 580 (Ashley J).

[49] Australian Blue Metal Limited v Hughes [1963] AC 74, 99; Rankin v Marine Power International Pty Ltd [2001] VSC 150, [220] (Gillard J).

[50] See for example Quinn v Jack Chia (Australia) Limited (above) 580 (Ashley J); Rankin v Marine Power International Pty Ltd (above) [222]-[223], [232].

[51] Quinn v Jack Chia (Australia) Limited (above) 581; Kilburn v Enzed Precision Products (1988) 4 VIR 31, 34 (O'Bryan J).

[52] (2002) 122 FCR 301; [2002] FCA 712.

[54] (1996) 137 ALR 321.

[56] [1998] VSC 132.

[57] See for example Russell v Trustees of Roman Catholic Church for Archdiocese of Sydney (2007) 69 NSWLR 169, [134] (Rothman J); Quinn v Gray [2009] VSC 136, [13]-[15] (Byrne J); State of South Australia v McDonald [2009] SASC 219; (2009) 104 SASR 344, 387 [223].

[58] See for example Van Efferen v CMA Corporation Ltd [2009] FCA 597, [79]-[85] (Tracey J); Walker v Citigroup Global Markets Pty Ltd [2005] FCA 1678; (2005) 226 ALR 114, 156-7 (Kenny J); McDonald v Parnell Laboratories (Aust) Pty Ltd [2007] FCA 1903.

[59] Johnson v Unisys Ltd [2003] 1AC 518; State of South Australia v McDonald (above), 391, 399.