Plaintiff v Defendant

Supreme Court of Victoria|2015-12-09|Before: Bell J

EMPLOYMENT LAW - contract of employment - defendant employee was sales manager of plaintiff wholesaling company - resignation on four weeks' notice - directed to take leave with pay for duration of resignation notice period - whether employer impliedly authorised so to direct by contract of employment - employee deprived of use of company-issued motor vehicle and mobile telephone during the leave - whether breach and repudiation of contract of employment - whether employee entitled to take up employment with new employer within notice period - whether communication by employee of acceptance of first employer's repudiation was required - when that communication occurred - whether, and for how long, new employment was inconsistent with first employment and in breach of employee's duty of loyalty and fidelity - employee sent emails with documents attached from work to home email address when working from home - whether done for work-related purpose - whether breach of duty of confidentiality in employment agreement and related confidentiality agreement.

1 Actrol Parts Pty Ltd is a wholesaler to the refrigeration and air-conditioning industries and a subsidiary of Reece Australia Ltd. Until his resignation (of which he gave notice on 13 August 2014), John Coppi was Actrol's State Sales Manager for Victoria, South Australia and Tasmania. As of 1 September 2014, Mr Coppi commenced employment as National Sales Manager with AHI-Carrier (Australia) Pty Ltd, trading as Totaline, a competitor of Actrol.

2 By a writ indorsed with a claim dated 10 September 2014, Actrol alleged that Mr Coppi had engaged in conduct that was in breach of his employment agreement and a separate confidentiality agreement with the company. Among other things, it was alleged that Mr Coppi had obtained and misused confidential information belonging to Actrol. It claimed damages against Mr Coppi and also sought a search order against him. Following an ex parte hearing on the same day that the writ was issued and after consideration of the affidavits filed on behalf of Actrol, that order was granted by this court.

3 The search order was executed at Mr Coppi's home where a number of computers and like devices were found and taken away. Technical interrogation of these revealed that Mr Coppi was in possession of certain emails (with attachments) that he had sent to his home email address from his Actrol email address. No evidence was found then, and none has been found since, that Mr Coppi sent these documents (or any other Actrol information) to anybody else, and it is not now so alleged.

4 In the period between 10 September 2014 when the writ was issued and 25 November 2015 when the trial of the proceeding commenced before me, literally hundreds of thousands of dollars were spent by the parties on legal fees and disbursements. On the first day of the trial, Actrol announced that it had suffered no damage as a result of the alleged wrongdoing of Mr Coppi. It informed the court that, in the proceeding, only nominal damages would be claimed. In the trial of seven days that followed, significantly more costs were run up.

5 It is Mr Coppi's submission that the circumstances I have described give rise to a number of issues under the Civil Procedure Act 2010 (Vic), particularly whether Actrol has breached the overarching obligation in s 24 to use its reasonable endeavours to ensure that legal costs are reasonable and proportionate. Actrol has disputed the criticisms made of its conduct of the proceeding and submitted that it should be awarded judgment for nominal damages, with the obvious intention of subsequently obtaining against Mr Coppi an order for costs, which will inevitably be very substantial.

6 At the end of the trial, I had to consider how to determine the substantive legal issues raised in the proceeding and the issues arising in respect of the proceeding under the Civil Procedure Act and in relation to costs. I came to the conclusion that the most expeditious course to adopt, and the course that was most fair to the parties, was to give judgment in relation to the former before giving judgment in relation to the latter. Therefore, in this judgment, I will determine whether any of the causes of action relied upon by Actrol had been established and also give directions in relation to determining how to interpret and apply ss 28 and 29 of the Civil Procedure Act. In a later judgment and after further hearing the parties, I will give consideration to and (if appropriate) determine the issues arising under the Civil Procedure Act and also issues relating to costs.

7 In the (latest) further amended statement of claim dated 1 December 2015, Actrol alleges that Mr Coppi entered into a written employment agreement dated 16 July 2010 by which he was employed as a Territory Manager for five years. The agreement contains an express confidentiality provision and also implied duties of loyalty, confidentiality and fidelity, as well as an implied duty not to undertake inconsistent employment. It is also alleged that Mr Coppi entered into a separate confidentiality agreement, also dated 16 July 2010. These matters are admitted by Mr Coppi.

8 The statement of claim alleges that, on 13 August 2014, Mr Coppi gave four weeks' notice of resignation to expire on 10 September 2014 and thereupon Actrol placed him on 'gardening leave' (leave with pay during the resignation notice period). This too is admitted by Mr Coppi, although he contends that Actrol had no lawful entitlement to place him on that leave and that, by that and other conduct, it fundamentally breached and repudiated the contract of employment.

9 The statement of claim then sets out the following allegations as to Mr Coppi's conduct:

Since at least 2 September 2014, the defendant has been working for AHI-Carrier Australia Pty Ltd trading under the business name 'Totaline' (Totaline), an entity unrelated to the plaintiff which is a direct competitor of the plaintiff.
On various dates in 2014, the defendant sent emails from his work email address to a personal email address containing information which is confidential to the plaintiff.

Particulars

On 4 February 2014, the defendant sent two emails from his work email address to coppifamily@bigpond.com each attaching an Excel spreadsheet containing the plaintiff's sales results for the calendar years 2009, 2010, 2011, 2012 and 2013.

On 21 July 2014, the defendant sent eight emails from his work email address to coppifamily@bigpond.com. Each of these emails contained a Weekly Call Sales Report for a different branch of the plaintiff as an attachment. This Weekly Call Sales Report contained the names of the plaintiff's existing and target clients and additional confidential and commercially sensitive information including specific orders placed by particular clients and the reason particular clients were visited by the plaintiff's sales representatives.

On 8 August 2014, the defendant sent an email from his work email address to coppifamily@bigpond.com attaching a spreadsheet entitled 'Annual Leave Accrual 060814' which contained the accrued annual leave entitlements of the plaintiff's sales representatives.

On 11 August 2014, the defendant sent an email from his work email address to coppifamily@bigpond.com attaching a number of emails including an email dated 12 January 2012 containing an Excel spreadsheet dated 12 January 2012 entitled 'Customer Sales and Margin for John Coppi'.

...

On 9 September 2014, the defendant attempted to solicit one of the plaintiff's employees, Mr Robert Drew, to work at Totaline.

Particulars

On 8 September 2014, the defendant called Mr Drew and arranged to have a meeting with him on 9 September 2014. This meeting took place at approximately 8.00 am on 9 September 2014 at Red Cup Café, 1124 Whitehorse Road Box Hill, and was attended by the defendant and Mr Drew.

The information contained in the emails referred to in paragraphs 10 and 11 above is information confidential to the plaintiff to which the obligations of the defendant under the Confidentiality Agreement apply.
The emails referred to in paragraph 10 above were sent for a purpose unrelated to the defendant's employment with the plaintiff.

10 In summary, the conduct alleged against Mr Coppi is that:

he began working for Totaline from at least 2 September 2014
he sent the specified emails containing confidential Actrol information from his work email address to his home email address for a purpose unrelated to his employment
he attempted to solicit one of Actrol's employees to work for Totaline

It is to be noted that it is not alleged that Mr Coppi misused or forwarded the emails containing the alleged confidential information to anybody, including Totaline. Allegations to that effect have been withdrawn.

11 Upon the basis of the alleged conduct, Actrol contends (para 16) that Mr Coppi breached:

(a) the express terms of the Confidentiality Agreement; and

(b) the said implied duties of:

(i) confidentiality; and

(ii) loyalty and fidelity,

of the Employment Agreement.

Actrol now admits that, in respect of these alleged breaches, it has suffered no actual damage.

12 Mr Coppi admits that he began working for Totaline from 1 September 2014. He contends that, and Actrol disputes, that this represented an acceptance by Mr Coppi of Actrol's repudiation of the contract of employment. He admits that he forwarded the emails from his Actrol email address to his home email address but contends, and Actrol disputes, that this was for work-related purposes. He denies attempting to solicit one of Actrol's employees to work for Totaline.

13 It is appropriate here to mention that, at the start of the trial, Actrol sought leave to add the paragraphs to the amended statement of claim. I refused that application.[1] Subsequently, however, the factual basis of the matters alleged became relevant as part of Actrol's response to Mr Coppi's contention that it had breached its overarching obligations under the Civil Procedure Act. I therefore admitted evidence in relation to these matters. In substance, Mr Coppi admits that he did cause his Actrol-issued iPhone and iPad to undergo a factory reset but contends that he did not thereby breach his contract of employment or the confidentiality agreement and was fully entitled to do so.

14 At the end of its opening, Actrol helpfully identified seven issues arising from the pleadings and the position of the parties in the proceeding. Reflecting Mr Coppi's closing submissions, I would describe those issues as follows:

(a) whether the plaintiff was entitled to place the defendant on leave with pay during the resignation notice period;

(b) whether the plaintiff repudiated the employment agreement by requiring the company-issued motor vehicle to be returned;

(c) whether the repudiation was accepted and acceptance communicated;

(d) whether Mr Coppi breached his duties of loyalty and fidelity to the plaintiff by commencing work with Totaline, a competitor;

(e) whether Mr Coppi, while on leave with pay during the resignation notice period, breached his duty to behave in a loyal and faithful manner by soliciting Robert Drew, an Actrol employee, to work with Totaline;

(f) whether Mr Coppi behaved improperly by causing his company-issued iPad and iPhone to undergo a factory reset; and

(g) whether Mr Coppi breached the employment agreement and/or confidentiality agreement by sending emails to his home address for his own purposes.

To those issues must be added, as para (h), the question whether the court has power under ss 28 and 29 of the Civil Procedure Act to dismiss a proceeding where the plaintiff has established an entitlement to relief but has breached its overarching obligations under that Act.

15 The purpose of this judgment is to determine six of the eight issues I have described and give directions in relation to my consideration of the eighth. After consideration, I have decided that issue (f) is relevant only to the question of what relief should be granted, costs and the exercise of the court's powers under the Civil Procedure Act. I will defer consideration of this issue until the next stage where those matters are to be the subject of submissions. As I have mentioned already, I will also defer consideration of the interpretation and application of ss 28 and 29 of that Act (issue (h)) and give directions in relation thereto (see below).

16 To the six issues that call for determination I now turn.

(a) Was Actrol entitled to place Mr Coppi on leave with pay for the duration of the resignation notice period?

17 The relevance of this issue is that Actrol alleges that Mr Coppi breached the contract of employment by commencing to work for Totaline on 1 September 2014 when he remained an employee of Actrol until his notice of resignation expired on 10 September 2014. As we have seen, Mr Coppi contends that, by placing him on 'gardening leave' and engaging in related conduct, Actrol fundamentally breached and repudiated the contract, leaving him free (by way of acceptance of that repudiation) to commence new employment.

18 In Bearingpoint Australia Pty Ltd v Hillard,[2] Habersberger J was called upon to describe 'garden leave'. His Honour said it was a 'colloquial or euphemistic term for an employer insisting that an employee, who has given notice, stay away from work for the duration of the notice period, whilst continuing to pay the employee's remuneration'.[3] Leading texts give the same description.[4] With respect, 'gardening leave' is an unfortunate and condescending expression and I am not comfortable with using it. It carries the connotation that an employer has so much power over an employee that the employer is entitled to direct a resigning employee to go home and tend the garden during the notice period. Moreover, the expression 'gardening leave' does not accurately describe the legal basis or nature of the leave in question, where it applies. Where, and only where, the contract expressly or impliedly so provides, it allows the employer to direct an employee (whose remuneration and other entitlements are otherwise to be maintained) not to attend the workplace and in consequence it allows the employer to decline to provide work to the employee during the resignation notice period. I will call this kind of leave 'leave with pay during a resignation notice period'.

19 Mr Coppi submitted that Actrol had no express or implied power under the contract of employment to place him on leave with pay during the resignation notice period. Actrol had a duty to provide him with work, especially because he was appointed to a specific position. The direction denied him the right to exercise his skills, manage his sales team and have the dignity of attending work.

20 Actrol submitted that, under the contract of employment, it was not expressly or impliedly required to provide Mr Coppi with work. There was an implied power to require him to follow lawful and reasonable directions. There was also an implied term permitting it to place him on leave with pay during the resignation notice period. Given that he was a sales manager working closely with both sales representatives and confidential information, it was entirely reasonable for Actrol to protect itself from the risk of harm that might flow from him performing normal duties during the notice period, especially in the particular factual circumstances.

21 It was common ground that the contract of employment did not confer an express power upon Actrol to place Mr Coppi on leave with pay during the resignation notice period.[5] I reject Mr Coppi's submission that the terms of the contract confer an express obligation on Actrol to provide Mr Coppi with work during this period. My reading of the terms of the contract is to the contrary.

22 Actrol does not assert an implied contractual power to decline to provide Mr Coppi with work, that is to say place him on leave with pay, indefinitely. I would not imply such a power because it would be inconsistent with the managerial nature of Mr Coppi's position and modern conceptions of the personal importance of, and dignity that is derived from, work.[6] Actrol asserts an implied contractual right to decline to provide him with work, that is to say place him on leave with pay, for the duration of his resignation notice period. I would imply such a power.[7]

23 Whether a contract of employment confers a power to place an employee on leave with pay during the resignation notice period depends upon the application of the conventional principles governing the implication of contractual terms generally.[8] Applying these principles to the present case, it would be reasonable and equitable to imply the term. Having regard to Mr Coppi's position as a sales manager with direct responsibility for sales representatives within a territory, it was reasonable for Actrol not to want him to perform actual work during the period of resignation notice, especially as the company had reason to think he would go to work with a competitor. I do not accept that it was an inherent condition of his contract of employment that he perform the duties of his position even during the limited period of that notice. The term would be equitable so long as Mr Coppi's remuneration and entitlements were to be maintained[9] and the period was short (only a few weeks) and connected with his resignation. That he might receive a little less by way of bonus payments during this period is not sufficient to warrant a different conclusion. The term would be necessary to give business efficacy to the contract because, without it, Actrol would have to maintain Mr Coppi in a position where he would have continuing contact with its sales representatives and confidential information. It would go without saying because most reasonable people would so regard such a term. A term permitting the employer to place an employee on leave with pay during the period of resignation notice would be clearly expressed and, in my view, would not contradict any express provision of the contract.

24 It follows that Actrol did not breach or repudiate the contract of employment by placing Mr Coppi on leave with pay during the resignation notice period and Mr Coppi could not, on this basis alone, treat himself as being free to commence new employment with Totaline on 1 September 2014.

25 In this connection, it cannot be suggested that Actrol breached or repudiated the contract of employment by paying Mr Coppi only up to 31 August 2014. According to the normal pay cycle, employees were paid monthly in the middle of the month, half in advance and half in arrears. Mr Coppi's remuneration for the first half of September (up to the expiry of the notice period on 10 September 2014) was not due until the middle of September by which time he was already working for Totaline. As he commenced that work on 1 September 2014, Actrol was not obliged to keep remunerating him.

(b) Whether Actrol repudiated the employment agreement by requiring the company-issued motor vehicle to be returned.

26 The admitted facts and the evidence establish that, when Mr Coppi resigned and Actrol placed him on leave with pay for the duration of the resignation notice period, it required him forthwith to give back his work-issued iPhone, iPad and motor vehicle, which he did. At the same time, he was told to pack up his personal possessions (he had already done so), leave the premises (he was driven to the railway station by a management employee) and not speak with Actrol employees or customers. He did not think to voice any protest at the time, which is understandable in the circumstances and has no bearing on determining whether Actrol's conduct was contractually repudiatory.

27 It was submitted by Mr Coppi that, by requiring him to return the motor vehicle, Actrol breached and repudiated the contract of employment such that he was (by way of acceptance thereof) free to work with another employer. This submission was based upon the contention that provision and use of the motor vehicle was an important term of employment under the contract, one that could not unilaterally be withdrawn during the resignation notice period or otherwise. While Mr Coppi also placed reliance upon the withdrawal by Actrol of his iPhone (and iPad), he placed primary reliance upon the withdrawal of the motor vehicle.[10]

28 Actrol submitted that there was no term of the employment agreement under which Mr Coppi was to have the benefit of the company's items (motor vehicle, iPhone and iPad). These were incidental personal benefits enjoyed during and contemplated for the performance of Actrol's work, ones that did not translate into contractual rights. Even if provision of the items was a contractual right, such provision was of small value such that the withdrawal was non-repudiatory.

29 The first question that arises is whether Mr Coppi was contractually entitled to use of the motor vehicle (and other items) under the contract of employment. The second question is whether the unilateral withdrawal of these items was contractually repudiatory.

30 In relation to the first question, Mr Coppi began employment with Actrol as a Territory Manager began on 26 July 2010 pursuant to a contract of employment signed on 16 July 2010. That contract did not mention a motor vehicle or other items but the letter of offer dated 8 July 2010 specified that:

With the position of Territory Manager also comes the use of:

Fully maintained company car
Mobile telephone
Laptop computer.

31 Mr Coppi was promoted to Senior Sales Territory Manager on about 28 March 2012. I take the original contract of employment to be the foundation of this promotion so that it continued to apply, modified as necessary, to the new position. By a letter dated 1 July 2012, Actrol advised him of the details of his 'salary package' with effect from 1 July 2012, as follows:

The following remuneration statement sets out the value of your cash salary package, non cash benefits and the estimated cost of the company motor vehicle.

Remuneration and Benefits as at 1 July [2012].

$70,000.00 Salary

$6,300.00 Superannuation (9%)

$18,914.00 Motor Vehicle - the estimated cost to the company of providing your fully maintained company vehicle.

$95,214.00 Total Package.

By a letter dated 1 July 2013, the company advised Mr Coppi of the details of his package with effect from 1 July 2013, as follows:

The following remuneration statement sets out the value of your ash salary package, non cash benefits and the estimated cost of the company motor vehicle.

Remuneration and Benefits as at 1 July 2013.

$72,100.00 Salary

$6,669.25 Superannuation (9.25%)

$19,500.00 Motor Vehicle - the estimated cost to the company of providing your fully maintained company vehicle.

$98,269.25 Total Package.

32 Mr Coppi's testimony to the court was that, from the commencement of his employment in 2010 to the day he gave notice of resignation on 13 August 2014, he had full use of a motor vehicle which the company maintained and for which it paid the fuel (in respect of both company and personal use), plus a mobile telephone and laptop computer (by the end of the employment this was an iPhone, iPad and laptop computer). His evidence about his entitlements in this regard was supported by other witnesses, the only area of uncertainty (which was not significant) being whether the company would pay for fuel in respect of interstate use of the motor vehicle without pre-arrangement.[11]

33 Actrol contended that the source of Mr Coppi's contractual entitlements was the contract of employment signed 16 July 2010. As it did not specify provision of a motor vehicle (or other items) as a condition of employment, this was not a condition. The letter of offer dated 8 July 2010 and salary package letters dated 1 July 2012 and 1 July 2013 were not contractual. Provision of a motor vehicle (and other items) was therefore at the discretion of the company and could lawfully be withdrawn.

34 These submissions must be rejected. The initial contract of employment must be read with the letter of offer. In my view, these documents together contain the terms of the contract of employment. This conclusion is supported by the conduct of the company, which provided the motor vehicle (and other items) during the course of Mr Coppi's employment, and the salary package letters, which treated the motor vehicle as being within the '[r]emuneration and [b]enefits' of Mr Coppi's 'salary package'.

35 Actrol relied upon evidence that Mr Coppi was aware of and familiar with Actrol's motor vehicle policy. As material, that policy stated:

1.2 The vehicle must be kept available for Company business during working hours and not be left at home during the week. For vehicles with a carrying capacity of 1 tonne or greater i.e. Dual Cabs, the private use must be restricted to travel between home and work and/or other minor, infrequent [and] irregular use.

1.3 Permission must be obtained from your State Manager if the vehicle is to be taken Interstate for personal purposes. Permission may be refused on the grounds of excessive mileage.

Actrol also relied upon evidence that, when Mr Coppi was allocated a company motor vehicle (as when he commenced employment with Actrol and on two subsequent occasions), he signed a declaration entitled 'RESPONSIBILITY OF DRIVERS OF COMPANY VEHICLES'. As material, this declaration stated:

The vehicle must be kept available for Company business during working hours and not be left at home during the week.
Permission must be obtained from your State Manager if the vehicle is to be taken Interstate for personal purposes. Permission may be refused on the grounds of excessive mileage.
Vehicle driver is expected to cover fuel costs for excessive personal use. Fuel costs, while on holidays, is a personal expense and must be paid for by the Employee Driver.

36 I reject Actrol's submissions that these documents, and Mr Coppi's conduct in accepting them, establish that provision of the motor vehicle was a matter of discretionary policy, not contractual entitlement. The motor vehicle and mobile telephone were not just tools of trade to be used in respect of work when there was work. The terms of Mr Coppi's employment, as set out in the letter of offer and the contract of employment, did not permit unilateral change of Actrol's obligation to provide a '[f]ully maintained company car' (and mobile telephone and laptop computer). The policy permitted no such thing but rather regulated the performance of that entitlement. On the evidence, the declaration was signed by Mr Coppi by way of acknowledgement of the company's policies, not by way of intention to accept a change to his contractual entitlement. In fact, he had use of the vehicle for 24 hours a day, seven days a week and 12 months a year for both work and private purposes. The doubt disclosed in the evidence concerning the company's obligation to pay for petrol during holiday use without pre-arrangement does not alter this situation. I reach the same conclusion in relation to Mr Coppi's mobile telephone. That the company's post-contract induction manual specified that smartphones had to be returned 'upon request of management' did not alter Mr Coppi's contractual entitlement to a mobile telephone.

37 Mr Coppi's first company-provided vehicle was a standard station wagon. His last, and the one he had when he resigned, was a dual-cab utility. Despite the provisions of cl 1.2 of Actrol's motor vehicle policy, he used this vehicle as he had used the station wagon and the company never complained. The provisions of cl 1.2 were never enforced. While they probably had internal significance to the company in relation to accounting and taxation, the provisions did not alter the terms of Mr Coppi's contract of employment. In my view, the dual-cab utility was supplied to him pursuant to the company's contractual obligation to provide him with a fully maintained company car and he was entitled to use it for work-related and private purposes accordingly, which he did. He was also contractually entitled to a work-issued mobile telephone, which he likewise used for work-related and private purposes.

38 The second question is whether Actrol's unilateral withdrawal of the motor vehicle (and iPhone) was repudiatory. Actrol submitted that the value of these contractual entitlements was very little, especially because (in Actrol's submission) the value of Mr Coppi's private use was not proved. I reject this submission. A motor vehicle (as is a mobile telephone) is valuable contractual entitlement to an employee. The value of the motor vehicle to Mr Coppi may or may not have been the estimated cost to the company of providing a fully maintained company vehicle to him ($19,500, according to the salary package letter dated 1 July 2013). But, at issue is the provision of a motor vehicle for which the maintenance and fuel are paid by the company in respect of both work-related and private use. This was an important and valuable part of Mr Coppi's salary package and contractual entitlements. To a lesser extent, so was the mobile telephone.

39 As explained by Gleeson CJ, Gummow, Heydon and Crennan JJ in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd,[12] the ordinary remedy for breach of contract is an award of compensatory damages, not termination of the contract. There are cases, however, where damages are not an adequate remedy and it would be irrational and unjust to hold an innocent party to his or her contractual obligations when the other party has defaulted. There are two circumstances in which the remedy for breach may include termination by the innocent party: (1) 'where the obligation with which there has been a failure to comply has been agreed by the contracting parties to be essential';[13] and (2) 'where there has been a sufficiently serious breach of a non-essential term',[14] also called an 'intermediate and innominate term'.[15]

40 In my view, the provision of a fully maintained motor vehicle formed an essential part of the remuneration and salary package that Mr Coppi enjoyed pursuant to the contract of employment. Unilateral reduction of an employee's remuneration or interference with an employee's salary package by an employer is no small matter, as explained in Cantor Fitzgerald International v Callaghan[16] by Judge LJ (Nourse and Tuckey LJJ agreeing):

Where however an employer unilaterally reduces his employee's pay, or diminishes the value of his salary package, the entire foundation of the contract of employment is undermined. Therefore an emphatic denial by the employer of his obligation to pay the agreed salary or wage, or a determined resolution not to comply with his contractual obligations in relation to pay and remuneration, will normally be regarded as repudiatory. ...

I very much doubt whether de minimis has any relevance in this field. If the amount at stake is very small, and the circumstances justifying a minimal reduction are explained to the employee, then the likelihood is that he would be prepared to accept new terms by way of mutual variation of the original contract. However an apparently slight change imposed on a reluctant employee by economic pressure exercised by the employer should not be confused with a consensual variation, and in such circumstances an employee would be entitled to treat the contract of employment as discharged by the employer's breach.

In the present case the amount in issue was not in the context of the overall package very great, although the sums at stake were not trivial. However the refusal to pay was deliberate and determined, motivated by a desire improperly to pressurise the defendants into harder work. The decision wholly undermined the contract of employment and constituted a repudiatory breach.[17]

41 Citing this and other authorities, Irving states that '[a] unilateral reduction in the employee's remuneration is almost always a serious breach [of the contract of employment] and a threat to do so in the future is almost always a repudiation'.[18] The authorities bear this statement out. I have already referred to Cantor Fitzgerald International. There is also Foggo v O'Sullivan Partners (Advisory) Pty Ltd[19] where unilateral refusal to pay a contractual bonus was held to be a repudiatory breach.[20] Then there is Chapman v Goonvean and Rostowrack China Clay Co Ltd[21] where Lord Denning MR held that removing the contractual benefit of free bus transport to and from work was a repudiatory breach of contract.[22] I would also refer to Rigby v Ferodo Ltd[23] where Lord Oliver (Lord Bridge, Lord Fraser, Lord Brightman and Lord Ackner agreeing) started with the common ground

that the unilateral imposition by an employer of a reduction in the agreed remuneration of an employee constitutes a fundamental and repudiatory breach of the contract of employment which, if accepted by the employee, would terminate the contract forthwith.[24]

42 On these principles, the unilateral withdrawal by Actrol of Mr Coppi's use of the Mazda dual-cab utility constituted a repudiatory breach of the contract of employment and I so conclude.[25] In my view, the provision of the motor vehicle, in particular, was an essential term or condition of the contract. If it is necessary so to find, the breach represented by the unilateral withdrawal of the vehicle was not trivial. It evinced an intention not to be bound by the contract and gave rise to a right of termination (by acceptance of the repudiation) on the part of Mr Coppi. At the very least, the provision of the motor vehicle was an intermediate term of the contract and the breach was so substantial as to be repudiatory. The additional withdrawal of the iPhone supports my conclusion as to the repudiatory nature of Actrol's conduct because it is further evidence that Actrol did not intend to be bound by the contract.

43 While I have concluded that Actrol did have a contractual right to place Mr Coppi on paid leave during the period of resignation notice and did not have the right unilaterally to withdraw the motor vehicle (and iPhone), one must not lose sight of the overall character of what Actrol did. What Actrol did was to place Mr Coppi on paid leave during the period of resignation notice and unilaterally withdrew his motor vehicle and iPhone, leaving him to be driven to the railway station by a management employee. No provision of the contract of employment - express or implied - permitted Actrol to place Mr Coppi on leave during the period of resignation notice in a way that reduced his remuneration or interfered with his salary package and that is what depriving him of his motor vehicle (and iPhone) amounted to. That is the true character of what Actrol did and its actions in so doing were plainly repudiatory.

(c) Was the repudiation accepted by Mr Coppi and communicated to Actrol?

44 Actrol contends that Mr Coppi breached duties that he owed to the company as its employee by taking up inconsistent employment with another company, indeed a competitor company, namely Totaline. Mr Coppi contends that, by taking up that employment, he accepted Actrol's repudiation of the contract of employment and thereby terminated that contract.

45 Actrol contends that it received no direct notice of acceptance from Mr Coppi. On the evidence, this is correct. It also contends that it only received indirect notice. On the evidence, that too is correct. At issue is when that indirect notice was given. It contends that it was not until 5 September 2014 that it positively knew that he had begun working for Totaline. On the admitted facts, Mr Coppi began working for Totaline on 1 September 2014. He contends that giving notice of acceptance of repudiation was not necessary for the termination to be effective on that date.

46 Having regard to that submission and the undisputed facts, it is first necessary to determine whether, for the termination to be effective, Mr Coppi had to communicate his acceptance of Actrol's repudiation to the company. If that communication was required, it will then be necessary to determine when it was given.

47 The evidence established that Mr Coppi resigned his employment with Actrol on 13 August 2014 on 4 weeks' notice expiring on 10 September 2014. On the same day, he was placed on leave with pay for the duration of the resignation notice period. There was no contact between Mr Coppi and Actrol management until after he commenced employment with Totaline on 1 September 2014. Actrol did not discover that Mr Coppi had taken up the position with Totaline until 2 September 2014, at the earliest.

48 In reliance upon Poort v Development Underwriting (Victoria) Pty Ltd (No 2),[26] Mr Coppi submitted that actual communication of the acceptance of repudiation was not required for the termination to be effective. As stated by Starke, Lush and Kaye JJ in that case:

Such a communication will often be made, but it is not strictly necessary. The innocent party rescinds if he treats the contract as at an end, declining to perform his part and declining to accept performance from the other party. ... What he cannot do is to blow hot and cold. If in some respects he treats the contract as still subsisting after the repudiation he cannot later rescind.[27]

49 Poort was a case involving the performance of a land contract. Upon the basis of facts that are far removed from the present, the Full Court of this court held that the vendor had accepted the purchaser's repudiation. The statement made by the Full Court has to be understood in the context of the case before it, which turned upon those facts. I do not accept Mr Coppi's submission that the case establishes a general rule of law that communication of acceptance of repudiation is not necessary to make a termination effective.

50 Where a party defaults and termination is available as a remedy to the innocent party by way of election, the termination does not crystallise until there is communication of the election by the innocent party to the defaulting party. I take the general rule in this respect to be as stated by Mason J in Sargent v ASL Developments Ltd[28] as follows:

A person is said to have a right of election when events occur which enable him to exercise alternative and inconsistent rights, i.e. when he has the right to determine an estate or terminate a contract for breach of covenant or contract and the alternative right to insist on the continuation of the estate or the performance of the contract. It matters not whether the right to terminate the contract is conferred by the contract or arises at common law for fundamental breach - in each instance the alternative right to insist on performance creates a right of election.

Essential to the making of an election is communication to the party affected by words or conduct of the choice thereby made and it is accepted that once an election is made it cannot be retracted.[29] No doubt this rule has been adopted in the interests of certainty and because it has been thought to be fair as between the parties that the person affected is entitled to know where he stands and that the person electing should not have the opportunity of changing his election and subjecting his adversary to different obligations.[30]

To the same effect was Young J in Zucker v Straightlace Pty Ltd[31] where his Honour stated that 'the great bulk of authority is in favour of an election not being completed until it is communicated'.[32]

51 The word 'communicated' is used in a special sense in this context. As pointed out by Young J in Zucker, it is for this reason that the word is usually placed within inverted commas,[33] as I have just done. Assuming that the subject of repudiatory breach is not relevantly regulated by the contract, the election of the innocent party can be communicated to the defaulting party directly or indirectly and by words or conduct. It is indirectly and by conduct that is relevant in the present case. Of that kind of communication of an election to accept a repudiation, Mason J said in Sargent that '[a]n election takes place when the conduct of the party is such that it would be justifiable only if an election had been made one way or the other'.[34] This principle was applied in Wheeler v Philip Morris Ltd,[35] an employment termination case, where Gray J held:

Conduct inconsistent with a recognition of continuing obligations under the contract will ordinarily amount to an acceptance of the repudiation as bringing the contract to an end.[36]

52 In the present case, in mid-late August senior management at Actrol had their suspicions that Mr Coppi would go or had gone to work with Totaline, but this had not actually been communicated to Actrol by any means. The evidence establishes that, on 2 September 2014, Sasha Nikolic, who was effectively the managing director of Actrol, was informed by somebody that he regarded as reliable that Mr Coppi had started working at Totaline. The informant gave Mr Nikolic a telephone number at Totaline that he was aware Mr Coppi was answering. I am satisfied by the evidence that, on that day, Mr Nikolic telephoned that number and it was answered with the message 'it's John from Totaline'. Mr Nikolic recognised the voice to be that of Mr Coppi.

53 Mr Nikolic gave evidence that he did not actively conclude that Mr Coppi had begun working with Totaline until a few days later on 5 September 2014 by which time he had made a number of like telephone calls to the same telephone number and received the same message. The few days hardly matter but I would find that Mr Coppi's acceptance of Actrol's repudiation was communicated to the company when Mr Nikolic made the first of his telephone calls on 2 September 2014.

54 For Mr Coppi to commence working for Totaline was to undertake employment that was inconsistent with his employment with Actrol. Undertaking such inconsistent employment represented Mr Coppi's acceptance of Actrol's repudiation of the contract of employment once this was communicated to Actrol. When Mr Nikolic made the telephone call to Mr Coppi at Totaline on 2 September 2014, he was in effect informed by the message left by Mr Coppi that he was working for Totaline. Taken with the information provided by Mr Nikolic's informant, this represented communication of Mr Coppi's election to accept the repudiation. It was not necessary for Mr Coppi himself to inform Actrol directly, although he did so himself indirectly by leaving the message for any caller to hear.

55 The contract of employment between Actrol and Mr Coppi was terminated on 2 September 2014 by the communication of Mr Coppi's acceptance of Actrol's communication. Actrol has thereby established that Mr Coppi committed a breach of his duties of employment with Actrol (see below) for one day, 1 September 2014. It admits that it suffered no loss thereby and claims only nominal damages.

56 I do not accept that Mr Coppi lost his legal entitlement to accept Actrol's repudiation by commencing employment with Totaline. Mr Coppi was not a guilty party seeking to take advantage of his own breach[37] but was reacting to Actrol's repudiatory conduct. Before that conduct, he was willing to perform and did perform his obligations under the contract of employment.[38] It was not a case of Mr Coppi being unwilling to perform his work with the company but of the company repudiating its contract with him.[39]

57 Mr Coppi advanced the alternative submission that Actrol was estopped by the doctrine of estoppel by convention from contending that he had not terminated the contract of employment because Actrol had acquiesced in and adopted this state of affairs, especially by not paying him for the period 1 September 2014 to 10 September 2014. He supported this submission by referring to Equuscorp Pty Ltd v Wilmoth Field Warne[40] where Buchanan, Ashley and Neave JJA adopted the elements of the doctrine of estoppel by convention that were specified by Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd[41] as follows:

Estoppel by convention is a form of estoppel founded not on a representation of fact made by a representor and acted on by a representee to his detriment, but on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying ... [T]here is no estoppel unless the alleged assumption has in fact been adopted by the parties as the conventional basis of their relationship.[42]

58 There is much to commend the application of the doctrine of estoppel by convention to the relations between the parties in the period between 2 September 2014 and 10 September 2014. However, until 2 September 2014, Actrol did not know, and therefore neither acquiesced in nor adopted, the state of affairs constituted by Mr Coppi working for Totaline. For the single day of 1 September 2014 which is in issue, the doctrine does not apply for that reason. In relation to the period from 2 September 2014 until 10 September 2014, the application of the doctrine is not relevant because communication of Mr Coppi's acceptance of Actrol's repudiation occurred on 2 September 2014 whereupon the contract of employment was terminated.

(d) Whether Mr Coppi breached his duties of loyalty and fidelity to Actrol by commencing employment with Totaline, a competitor.

59 As an employee of Actrol, Mr Coppi owed to the company a duty of loyalty and fidelity[43] one element of which is that an employee 'cannot engage in other inconsistent employment that creates a real conflict between the duties owed to the employer and the duties owed to a third party'.[44] The duty of loyalty and fidelity does not prevent an employee from engaging in employment with two employers (although, subject to restraint of trade considerations, which a contract of employment may so provide). But, as explained by the Employment Appeal Tribunal in Laughton v BAPP Industrial Supplies Ltd,[45] the duty of loyalty and fidelity that an employee owes to an employer means that '[an] employee whilst in his employment ... must not work for another employer if the other employment would be inconsistent with his first employment'.[46] The duty of loyalty and fidelity is not of indefinite application; it lasts only for the duration of the contract of employment and does not apply after the termination of that contract.[47]

60 For one day on 1 September 2014, Mr Coppi was employed by Totaline, a competitor of Actrol, when his contract of employment with Actrol was still on foot. His employment with Totaline was inconsistent with his employment with Actrol and therefore he breached, for that one day, the duty of loyalty and fidelity that he owed to Actrol. Once the contract of employment with Actrol was terminated on 2 September 2014 by the communication to the company of his acceptance of its repudiation, that contract came to an end and the duty of loyalty and fidelity thereupon also came to an end.

(e) Whether Mr Coppi, while on leave with pay during the resignation notice period, breached his duty of loyalty and good faith by attempting to solicit Robert Drew, an Actrol employee, to work for Totaline.

61 Actrol contends that, on 9 September 2014, Mr Coppi attempted to solicit one of Actrol's employees, Robert Drew, to work at Totaline. In support of that contention, it relies upon evidence that Mr Coppi telephoned Mr Drew and arranged to meet with him at a café on 9 September 2014, which they did. By that time, the contract of employment between Mr Coppi and Actrol was terminated. Mr Drew was then and still is an employee of Actrol.

62 As a matter of law, the alleged soliciting could not be a breach of the duty of loyalty and fidelity that Mr Coppi owed to Actrol because the contract of employment was terminated at the time and the duty was therefore inapplicable. No continuing contractual obligation or legal principle relied upon by Actrol operated to prevent Mr Coppi from soliciting Mr Drew to work for Totaline. It was not contended that, in engaging in the alleged solicitation, Mr Coppi used confidential information or disclosed such to Mr Drew.

63 As a matter of fact, there is no evidence to support Actrol's allegation that Mr Coppi attempted to solicit Mr Drew. I accept Mr Coppi's evidence that the two men were and are friends and met as such and that he did not attempt to solicit Mr Drew. I do not accept Actrol's submission that its instruction to Mr Coppi not to speak with Actrol's employees could lawfully extend to him not speaking socially with his friend Mr Drew or that Mr Coppi breached this instruction in doing so. I reject Actrol's submission that I should infer a finding of breach from the established facts, which really point in the other direction.

(f) Whether Mr Coppi engaged in improper conduct in causing his company-issued iPhone and iPad to undergo a factory reset.

64 As already discussed, consideration of this issue is deferred.

(g) Whether Mr Coppi breached the contract of employment and the confidentiality agreement by sending emails to his home address for his own purposes.

65 Actrol contended, and sought to prove, that Mr Coppi sent the emails particularised in para 10 of the statement of claim (see above) from his Actrol to his home address for purposes unrelated to his employment with the company. Mr Coppi admitted sending the emails from his Actrol to his home email address but, in his defence, submissions and evidence, denied doing so for non-employment purposes.

66 As can be seen from the particulars in para 10, relevant are a number of emails (with attachments) sent on four dates. These may be described as follows:

two sales results emails dated 4 February 2014, being exhibits 12 and 13
eight weekly call sales report emails dated 21 July 2014, being exhibit 16
one annual leave accrual email dated 8 August 2014, being exhibit 47
one customer sales and margin email dated 11 August 2014, being exhibits 20 and 20A

67 Before turning to the evidence in relation to the individual emails, I will address certain preliminary and general issues.

68 A general submission was made by Actrol that Mr Coppi did not need to send documents to his own home email address because he could access such documents on his company-issued iPhone, iPad, laptop or on his home computer via the remote access program that Actrol supplied. Evidence supporting this submission was given by Mr Nikolic and Shane Laffin. On the basis of this evidence, I accept that it was possible by these means to view Actrol documents.

69 It was Mr Coppi's evidence that an efficient and convenient means of viewing Actrol documents, many of which were in spreadsheet format, was on the full-size screen of his home computer. Neither the company-issued iPad or iPhone were as efficient or convenient for this purpose. He usually left his laptop in its docking station in the office and seldom used it. It remained at all times connected to the Actrol server from its position in his office. His attempts to install the remote access program on his home computer had failed.

70 I accept this evidence. Although Mr Coppi could have sought Actrol technical assistance successfully to install the remote access program, he achieved the result of efficiently and conveniently viewing Actrol documents by the means of sending them as attachments to his home email address. All witnesses on this subject - both on Actrol's side and on Mr Coppi's side - deposed that this was not contrary to the contract of employment or company policy, even if it was not a management preference. Mr Coppi did not behave improperly or commit any breach of duty in relation to his employment in so doing.

71 I reject Actrol's submissions, and evidence to this effect given by its witnesses, that Mr Coppi generally had no legitimate reason to be forwarding emails (with attachments) to his home email address. As a sales manager with a team of sales representatives to manage, it is in no way surprising that he should work at home at night or from home during the day on occasion. I accept his evidence that he regularly did so for legitimate reasons connected with his employment with Actrol. He had the legitimate reason of working from home for sending work emails with attachments there.

72 In considering the evidence in relation to Mr Coppi's purpose in sending the emails to his home address, I bear in mind that Actrol has abandoned any suggestion of improper dissemination to a third party or improper use involving a third party on Mr Coppi's part. The search order, which was highly intrusive (as most are), resulted in the seizure and interrogation of Mr Coppi's home computer devices and no such dissemination or improper use was revealed. None was revealed in the email and document records relating to his work computer. In evidence under oath, he denied any such dissemination or improper use and I accept this evidence. There is no evidence that any emails that he might have permanently deleted from his home or work computer were so deleted for an improper purpose or would have revealed such dissemination or other improper use.

73 On the evidence, emails were found in the deleted items folder of Mr Coppi's home computer. This is consistent with his evidence that, generally, he would delete emails sent to his home email address from his Actrol email address after viewing them. That the emails were deleted, not saved, tends to support his evidence that he sent the emails to his home email address for legitimate work-related purposes.

74 I reject Actrol's submission that Mr Coppi was not a witness of credit. On the contrary, I found him to be an honest and straightforward witness who did his best to tell the truth and assist the court. In my view, that was the case with all of the witnesses, on both Actrol's and Mr Coppi's side. Mr Coppi did not have a perfect recollection in relation to key events, which is understandable, but his evidence was not generally inconsistent. Any particular inconsistencies or uncertainties were, in my view, explicable by reference to the passage of time and similar considerations.

Sales results emails dated 4 February 2014 (exhibits 12 and 13)

76 In February 2014, Mr Coppi was a sales manager with responsibility for a team of sales representatives. The two emails concerned attached a document containing sales results for these sales representatives between 2009 and 2013 and a column with workings by Mr Coppi.

77 I accept the submissions made for Mr Coppi that the attached documents contained information that, by its nature, fell within his sphere of responsibility. In particular, the documents recorded the sales results over four years of the sales representatives who reported to him. I accept his evidence that his employment involved analysis of sales figures, both in the aggregate and representative by representative, and was relevant to setting budgets and targets. His evidence in this regard was support by Craig Bicket, who was effectively the Actrol state managing director at the time.

78 I must observe that it is a difficult thing to establish that a sales manager has no business in reviewing sales results figures. The idea is counter-intuitive. I can understand that such information was capable of being used against Actrol's interests by third parties and that it would be improper and unlawful to disseminate it to competitors. But there is no evidence of this happening here and Actrol does not so allege.

79 Actrol submitted that Mr Coppi sent the emails home for the allegedly improper purpose of preparing a curriculum vitae. This suggestion was put to him in cross-examination and I think it caught him by surprise. He struggled with the sequence of events and gave evidence that was somewhat confusing about whether a curriculum vitae was in draft or in final terms.

80 The evidence was that Mr Coppi prepared a curriculum vitae in his office at Actrol and sent it home attached to an email dated 12 March 2014. In that form and under the heading 'ACHIEVEMENTS', the curriculum vitae referred to growth figures across three years that were the same as those specified in the attachments to the emails dated 4 February 2014. On Mr Coppi's evidence, he obtained those figures from the documents constituting those attachments when he was preparing the curriculum vitae at work in the Actrol premises (that is, not at home). In final form and containing the same figures, the curriculum vitae was sent to an employment placement consultant by attachment to an email dated 15 July 2014.

81 The evidence does not support Actrol's submission that the sales results emails were sent home by Mr Coppi to assist him to work on his curriculum vitae. He prepared the curriculum vitae at work using figures he had obtained there. He did not need to access the documents at home and there is no evidence that he did so for this purpose. I do not need to decide whether it would have been improper for Mr Coppi to send the email home to assist him in preparing a curriculum vitae there.[48]

82 I find that Mr Coppi was entitled to send the sales results emails from his work to his home email address and he committed no breach of employment in doing so.

Weekly call sales report emails dated 21 July 2014 (exhibit 16)

83 In July 2014, Mr Coppi was still a sales manager having responsibility for a team of sales representatives. The eight emails concerned attached the weekly sales call cycle reports relating to eight of Actrol's stores. Different sales representatives were connected with each of the stores. The reports gave details of the customers personally visited by the representatives. From the overall contents of these emails, it is clear that the reports were sent by the sales representatives by email to Mr Coppi on the Friday of a working week (18 July 2014) and were then forwarded by Mr Coppi to his home email address on the following Monday (21 July 2014).

84 Again, the reports attached to the emails contained information directly relating to Mr Coppi's management of the sales representatives concerned. I accept the evidence of Mr Bicket that the reports contained information that Mr Coppi would be expected to review. The reports were clearly a management tool that enabled Mr Coppi to monitor the visitation activity of the representatives reporting to him. Mr Coppi had a legitimate work-related purpose for viewing this information when working from home and I reject Actrol's submissions, and its evidence, that he did not.

85 In reaching this conclusion, I take into account that the information in the reports was capable of being used contrary to Actrol's interests, as Actrol submitted and Mr Nikolic deposed. Among other things, the documents contained the ranking of customers. Mr Coppi agreed in his evidence that the list of customers visited was a list of those already buying from Actrol and also those whom it wanted to develop.

86 However, no such actual misuse was established or even alleged. I reject Actrol's submission that the court should find that, despite their deletion from Mr Coppi's home computer, he sent the documents to his home email address for use in the future. The evidence does not support this contention; indeed it points to the contrary.

87 I also take into account that, on the evidence, I cannot find that Mr Coppi was actually working from home by reason of an injured hand at the relevant time (21 July 2014) and that he used the emails for the purposes of sales meetings that usually occurred at 9.00 am on Monday mornings which he often conducted from home. I do not reject his evidence in these respects but I found aspects of it uncertain. I am not sure that he reliably remembers the events of 21 July 2014 and thereabouts, which is explicable given the passage of time and what has happened since. While the sequence of events does suggest that he did use the reports for Monday sales meetings, the sending time of the email dated 21 July 2014 was over an hour after the usual time of that meeting. Perhaps it was held later than usual on that day, as Mr Coppi deposed. In the end, I do not need to resolve these matters.

88 Mr Coppi was entitled to send the weekly sales call reports emails home and committed no breach of employment duty in so doing.

Annual leave accrual email dated 8 August 2014 (exhibit 47)

89 This email concerns a spreadsheet attachment recording the hours of annual leave accrued by Mr Coppi and sales representatives in Victoria, South Australia and Tasmania. As explained by Mr Coppi in his evidence, the presence of the information relating to the other employees was a product of the document being in spreadsheet format. He was interested in, and only viewed, the information relating to himself.

90 I reject Mr Nikolic's evidence that Mr Coppi had no legitimate reason for sending this email to his home email address. Whether or not he could have obtained information relating to his accrued hours of annual leave from other documents, he clearly could obtain the information from the attached spreadsheet. At about the same time that he sent the email home, he received and accepted an offer of employment from Totaline. That gave him a legitimate reason for knowing what his accrued hours of annual leave were. I accept his evidence that he was not interested in, and did not view, the information relating to the other employees.

91 Actrol submitted that the court should find that Mr Coppi sent this email home for future reference. The evidence does not support such a finding. Nor does it establish what commercial value the information would have had to Mr Coppi in future employment.

Customer sales and margins email dated 11 August 2014 (exhibits 20 and 20A)

92 This email formed part of a large number of attachments that Mr Coppi forwarded from his Actrol to his home email address on 11 August 2014. The other attachments were payslips and like information, private emails relating to the administration of the estate of a deceased person and other emails about which Actrol had no complaint. The relevant attachment was an email dated 12 January 2014 that had been sent by Actrol administration to Mr Coppi. It attached a complex spreadsheet containing customer sales and margin information as at the given date and during the first seven months of the 2012 financial year. It was rich in information of a confidential nature relating to Actrol's sales in the Peninsula and Eastern regions and certainly was information that Actrol would not have wanted to fall into a competitor's hands.

93 Actrol submitted that this was perhaps the 'most egregious' of the documents that Mr Coppi sent home for a purpose unrelated to his work. The context was that, when he sent this email with its attachment home, he had received and accepted an offer of employment with Totaline. Two days later on 13 August 2014 he would resign from Actrol. As the information in the attached spreadsheet was so old (January 2012), it could not be relevant to his employment as a sales manager at Actrol in August 2014. It was possible that Mr Coppi permanently deleted the email from the Actrol server.

94 Mr Coppi gave a simple innocent explanation for forwarding this email and attachment to his home email address when he did, which I accept. He said it was located with other emails in a personal folder in his work email files. Prior to leaving he 'grabbed everything that was in my personal folder and flipped it across to my home address'. His purpose was a general purpose. He specifically remembered opening the attachment at home and deleting it immediately because it was 'quite ... old ... [and] irrelevant'.

95 Mr Coppi had previously stated that the attachment was forwarded home as it was relevant to the calculation of his 2014 bonus. He admitted in his evidence that it could not assist in that calculation. I have taken into account this inconsistency in his evidence. I think he gave mistaken but honest evidence about the reason for sending the document home which he clarified in his later evidence. I found his clarification convincing.

96 As with other documents in question, I accept that this document was capable of being used contrary to Actrol's commercial interests. There is no evidence that it was so used and this is not alleged. That the document may have been permanently deleted from the Actrol server by Mr Coppi does not establish that he forwarded it home for an improper purpose. I reject Actrol's submission that he forwarded the document home for future improper use in his employment with Totaline.

97 It is not established that Mr Coppi breached his duties of employment by forwarding the customer sales and margins email dated 11 August 2014 to his home email address.

98 Actrol has not established that Mr Coppi breached his duties of employment by sending any of the emails dated 4 February 2014, 21 July 2014, 8 August 2014 and 11 August 2014 and particularised in para 10 of the statement of claim from his Actrol to his home email address. In each case he had a legitimate work-related reason for doing so. In no case has it been established that he did so for an improper purpose.

(h) Whether the court has power under ss 28 and 28 of the Civil Procedure Act to dismiss a proceeding where the plaintiff has breached its overarching obligations.

99 I had originally intended to determine this issue as a preliminary question of statutory interpretation. On consideration, it should not be determined in this way. Consideration of this issue should take place in the context of the submissions made by the parties as to the application of the provisions in the facts and circumstances of the case. I will take into account the submissions that the parties have filed in relation to this issue in that context.

100 There is now to be a further hearing in relation to what relief should be granted, costs and the exercise of the court's powers under the Civil Procedure Act. I therefore direct that, in that hearing, the parties should make submissions addressing the alternative possibilities that the court might decide that it does or does not possess the power to dismiss a proceeding where breach of an overarching obligation is established. The parties should also make submissions as to whether, if that power is possessed, it should be exercised.

101 In this proceeding, Actrol claimed against Mr Coppi various breaches of the contract of employment and a confidentiality agreement for which it seeks only nominal damages. Actrol has established that it was entitled to direct Mr Coppi to take leave with pay during the period of his resignation notice. But he has established that Actrol repudiated the contract of employment by directing him to return the motor vehicle (and mobile telephone) that was available to him for both work-related and private use under the contract of employment during that period. While Actrol has established that, for one day, Mr Coppi breached his duty of loyalty and fidelity as an employee, that was because he took up employment with another company without communicating his acceptance of Actrol's repudiation of his contract of employment until the second day of his new employment. Actrol has failed to establish that Mr Coppi breached his contract of employment or the confidentiality agreement by sending emails and documents from his Actrol to his home email address when he worked from home. There was nothing improper in him doing so.

102 There must now be a further hearing to determine what (if any) relief should be granted to Actrol, what orders as to costs should be made, the extent of the court's powers under ss 28 and 29 of the Civil Procedure Act and whether such powers should be exercised.

[1] Actrol Parts Pty Ltd v Coppi (No 1) [2015] VCS 670 (9 December 2015).

[2] [2008] VSC 115 (18 April 2008).

[4] Mark Irving, The Contract of Employment (LexisNexis Butterworths, 2012) 533 [8.54]; Caroline Sappideen et al, Macken's Law of Employment (Law Book Co, 7th ed, 2011) 300 [8.110].

[5] A contract of employment in relation to another employee which contained such an express power was in evidence but Mr Coppi's contract of employment was not in these terms.

[6] See Quinn v Overland [2010] FCA 799; (2010) 199 IR 40, 60 [101] (Bromberg J); WBM v Chief Commissioner of Police (Vic) [2012] VSCA 159; (2012) 230 A Crim R 322, 360-1 [169]-[174] (Bell AJA); Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159; (2008) 71 NSWLR 633, 683 [418]-[419] (Rothman J).

[7] I reject Mr Coppi's submission that it was not open to Actrol to advance this argument because it was not pleaded by way of reply. The argument naturally arises from the way in which the parties have joined issue and the case has been run.

[8] For those general principles, see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 282-3 (Privy Council); Codelfa Constructions Pty Ltd v State Railway Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337, 347 (Mason J, Stephen and Wilson JJ agreeing); Regreen Asset Holdings Pty Ltd v Castricum Brothers Australia Pty Ltd [2015] VSCA 286 (27 October 2015) [62], [78] (Warren CJ, Kyrou and McLeish JJA).

[9] I consider below the separate issues arising from the withholding of his motor vehicle, iPhone and iPad.

[10] I leave the laptop computer out of consideration because the evidence was that he always left it in his Actrol office and seldom used it.

[11] There was evidence, also not significant, that the company did not pay for road tolls incurred during private use and that Mr Coppi paid for such tolls. Likewise not significant was evidence that Actrol did not pay any Fringe Benefits Tax on Mr Coppi's work-provided Mazda dual-cab utility as it had a carrying capacity exceeding 1 tonne and was therefore exempt and that Actrol calculated the income tax to be withheld from Mr Coppi's salary upon the basis of his cash remuneration and not the estimated cost to the company of providing the vehicle.

[16] [1999] EWCA Civ 622; [1999] 2 All ER 411 ('Cantor Fitzgerald International').

[18] Mark Irving, The Contract of Employment (LexisNexis Butterworths, 2012) 303 [6.17].

[19] [2011] NSWSC 501; (2011) 206 IR 87 (New South Wales Supreme Court).

[20] Ibid 117 [107]-[109] (Schmidt J).

[25] Actrol relied upon Tullet Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414 where, in the New South Wales Supreme Court, Brereton J held that withdrawing access to a paid car park in the period of leave with pay during resignation notice was not repudiatory. This case is distinguishable because the conclusion was based upon the finding that the 'car parking space was an incident of attendance at work' (ibid 423 [25]) whereas the benefit withdrawn in the present case was use of a motor vehicle for business and private purposes that Mr Coppi had during that period.

[29] R v Paulson [1921] 1 AC 271, 284 (Lord Atkinson); Tropical Traders Ltd v Goonan [1964] HCA 20; (1964) 111 CLR 41, 55 (Kitto J).

[31] (1986) 11 NSWLR 87 ('Zucker').

[32] Ibid 94; see also Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105, 146 (McHugh J).

[33] Zucker (1986) 11 NSWLR 87, 95.

[34] [1974] HCA 40; (1974) 131 CLR 634, 656, citing Tropical Traders Ltd v Goonan [1964] HCA 20; (1964) 111 CLR 41, 55 (Kitto J).

[37] Cf Purcell v Tullet Prebon (Australia) Pty Ltd [2010] NSWCA 150 (28 September 2010) [18] (Handley AJA, Allsop P and Basten JA agreeing).

[38] See Foran v Wight [1989] HCA 51; (1989) 168 CLR 385, 397-402 (Mason CJ).

[39] Cf Tullet Prebon (Australia) Pty Ltd v Purcell [2008] NSWSC 852; (2008) 175 IR 414, 424 [30] (Brereton J).

[43] Mark Irving, The Contract of Employment (LexisNexis Butterworths, 2012) 370 [7.39].

[45] [1986] ICR 634 (Gibson J, Mr T S Batho and Mr G A Drain).

[47] Robb v Green [1895] 2 QB 1, 14 (Hawkins J).

[48] It is not significant that he may have somewhat exaggerated his achievements in the curriculum vitae.

At a glance

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Cases Cited (15)