Stapleton v City of Parramatta Council

Supreme Court of NSW|2019-02-18|Before: Kunc J, Mr J

Summary

The plaintiff ("Mr Stapleton") is the Chief Executive Officer of the City of Parramatta Council (the "Council"), although currently he is suspended from that position on full pay. The defendant is the Council.
Mr J P Redmond of Counsel appeared for Mr Stapleton. Mr A Moses of Senior Counsel appeared with Ms D Tang of Counsel for the Council.
On 11 February 2019, I granted Mr Stapleton leave to file in Court a summons. The interlocutory relief in that summons which was pressed before me today was: "3. THAT the defendant is prevented from terminating the employment of Mark Stapleton as CEO of the City of Parramatta until 7 days after determination of these proceedings or until further order of this Court, whichever is the earlier. 4. THAT the plaintiff makes the usual undertaking as to damages in respect of Order 3 above. 5. THAT the Defendant shall: (a) Within 48 hours make available for collection by the Plaintiff's solicitors: (i) A copy of all documents utilised by Council at its extraordinary meeting on 7 September 2018 where the motion to suspend my client on full pay was passed pending a review by Ms Jane Seymour; and (ii) A copy of all documents utilised by Council at its extraordinary meeting on 4 February 2019 where the motion to negotiate with my client was passed, including the reports and documents produced by Ms Jane Seymour. (b) Within 48 hours, provide unhindered access to the plaintiff to his email account at the city of Parramatta for the purposes of printing any documents which the plaintiff intends to utilise as evidence within these proceedings; (c) Within 48 hours from the time that a request is made in writing by the Plaintiff's solicitors, provide to the plaintiff any documents, whether confidential or otherwise, as may be requested provided that such documents are required to be utilised in these proceedings."
That interim relief was sought in aid of this final relief: "10. Declaration that the resolutions of the Council of the City of Parramatta made at its Extraordinary Meetings of 7 September 2018 and 4 February 2018 (sic) are unlawful and /or are null and void, such that the plaintiff may continue his employment as CEO of the City of Parramatta pursuant to the Contract of Employment dated 27 June 2018. 11. THAT the defendant is to provide to the plaintiff specific performance of the Contract of Employment dated 27 June 2018 until its conclusion on 9 January 2021, such that unless pursuant to Court Order, the defendant is prevented from terminating the employment of Mark Stapleton as CEO of the City of Parramatta and such is to run its full term until its conclusion on 9 January 2021. 12. THAT as employer, the defendant is to pay the plaintiff's reasonable legal costs of these proceedings as and when they fall due."

The facts

From 2017 to 26 June 2018 Mr Stapleton held the position of Director of Property and Significant Assets of the Council. That position is immediately below that of the Chief Executive Officer ("CEO").
On 27 June 2018 Mr Stapleton was appointed as CEO of the Council. He entered into what is described on its title page as a "Standard Contract of Employment General Managers of Local Councils in New South Wales" (the "Contract"). The Contract is expressed to have been made on 27 June 2018 and provides for a period of employment commencing on 10 July 2018 and terminating on 9 January 2021.
For the purposes of today the relevant provisions of the Contract are: "10 Termination 10.1 General On termination of this contract for any reason the employee will immediately return to Council all property of Council in the employee's possession including intellectual property and confidential information and will not keep or make any copies of such property and information. 10.2 Termination date The employment of the employee under this contract terminates on the termination date. 10.3 Termination by either the employee or Council This contract may be terminated before the termination date by way of any of the following: 10.3.1 written agreement between the employee and Council, 10.3.2 the employee giving 4 weeks' written notice to Council, 10.3.3 Council giving 4 weeks' written notice to the employee, or alternatively by termination payment under subclause 11.1, where: (a) the employee has been incapacitated for a period of not less than 12 weeks and the employee's entitlement to sick leave has been exhausted, and (b) the duration of the employee's incapacity remains indefinite or is likely to be for a period that would make it unreasonable for the contract to be continued, 10.3.4 Council giving 13 weeks' written notice to the employee, or alternatively, by termination payment under subclause 11.2 where Council: (a) has conducted a performance review, and (b) concluded that the employee has not substantially met the performance criteria or the terms of the performance agreement, 10.3.5 Council giving 38 weeks' written notice to the employee, or alternatively, by termination payment under subclause 11.3. 10.4 Summary dismissal 10.4.1 Council may terminate this contract at any time and without notice if the employee commits any act that would entitle an employer to summarily dismiss the employee. Such acts include but are not limited to: (a) serious or persistent breach of any of the terms of this contract, (b) serious and wilful disobedience of any reasonable and lawful instruction or direction given by Council, (c) serious and wilful misconduct, dishonesty, insubordination or neglect in the discharge of the employee's duties and functions under this contract, (d) failure to comply with any law or Council policy concerning sexual harassment or racial or religious vilification, (e) commission of a crime, resulting in conviction and sentencing (whether or not by way of periodic detention), which affects the employee's ability to perform the employee's duties and functions satisfactorily, or in the opinion of Council brings Council into disrepute, (f) absence from the business of Council without Council approval for a period of 3 or more consecutive business days. 10.4.2 This contract is terminated immediately without notice if the employee becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors or makes an assignment of his or her remuneration for their benefit. 11 Termination payments 11.1 On termination of this contract under subclause 10.3.3, where written notice has not been given, Council will pay the employee a monetary amount equivalent to 4 weeks' remuneration calculated in accordance with Schedule C. 11.2 On termination of this contract under subclause 10.3.4, where written notice has not been given, Council will pay the employee a monetary amount equivalent to 13 weeks' remuneration calculated in accordance with Schedule C. 11.3 On termination of this contract under subclause 10.3.5, where written notice has not been given, Council will pay the employee a monetary amount equivalent to 38 weeks' remuneration calculated in accordance with Schedule C, or the remuneration which the employee would have received if the employee had been employed by Council to the termination date, whichever is the lesser, 11.4 On termination of this contract under subclause 10.3.1, 10.3.2, 10.4.1 or 10.4.2, Council will pay the employee remuneration up to and including the date of termination calculated in accordance with Schedule C and any other payment to which the employee is entitled under this contract. … 17 Dispute resolution 17.1 In relation to any matter under this contract that may be in dispute, either the employee or Council may: (a) give written notice to each other of the particulars of any matter in dispute, and (b) within 14 days of receiving a notice specified in subclause 17.1(a), a meeting will be convened between Council (along with any nominated representative of Council) and the employee along with any nominated representative of the employee) in an attempt to resolve the dispute. 17.2 The employee and Council will attempt to resolve the dispute at the workplace level. 17.3 Upon failure to resolve the dispute at the workplace level, the employee and Council will: (a) refer the dispute to an independent mediator as agreed by the employee and Council, or otherwise as appointed by the Director-General, (b) agree to participate in any mediation process in good faith, with such mediation to operate in a manner as agreed by the employee and Council, and (c) acknowledge the right of either the employee or Council to appoint, in writing, another person to act on their behalf in relation to any mediation process. 17.4 The cost of the mediation service will be met by Council. 17.5 The employee and Council will each be responsible for meeting the cost of any advisor or nominated representative used by them."
A few weeks after his appointment as CEO allegations were made in the media (now the subject of defamation proceedings by Mr Stapleton against the relevant media outlet) that Mr Stapleton's curriculum vitae which informed his appointment as CEO was, in material respects, incorrect.
On 7 September 2018, the Lord Mayor of the Council called an extraordinary council meeting at which this resolution was passed: "(a) That Council does not accept the veracity of the allegations made against the Chief Executive Officer. (b) That an independent external review be conducted to confirm the authenticity of the work experiences, qualifications, references and associated claims provided by Mr Stapleton in relation to his application for the role of Director of Property and Significant Assets and Chief Executive Officer at City of Parramatta Council. (c) That an independent external review be conducted into the accuracy of Mr Stapleton's declaration of interests under section 449 of the Local Government Act 1993. (d) That an independent external review be conducted into all aspects of the recruitment of Mr Stapleton to the roles of Director Property and Significant Assets and Chief Executive Officer at City of Parramatta Council. (e) That Council suspend Mr Stapleton on full pay effective immediately. (f) That Council appoint Ms Sue Coleman to act as General Manager, to be known as the Acting Chief Executive Officer, effective immediately. (g) Further, that a suitably qualified senior individual be commissioned to lead the inquiries recommended in this Minute."
Ms Jane Seymour, supported by Holding Redlich Solicitors, was engaged to carry out the independent external review referred to in the resolution.
Ms Seymour's review has now been completed and copies of it were made available to councillors on a confidential basis at a meeting of the Council on 4 February 2019. This resolution was then passed at that meeting: "That Council authorises the Lord Mayor and the Acting CEO (or their delegates) to negotiate with Mark Stapleton in relation to the CEO's contract of employment with Council, within the parameters set out in the Contract and the Local Government Act 1993."
These proceedings first came before me as Duty Judge on 11 February 2019 when I granted leave to Mr Stapleton to file his summons. At that time Mr Redmond also sought an ex parte injunction restraining the Council from terminating Mr Stapleton's employment. In the first instance I asked Mr Redmond, or those instructing him, to make inquiries of the Council as to whether or not a legal representative could attend the Court later that day. That was done and a solicitor for the Council appeared, albeit with limited instructions. Nevertheless, that appearance did assist the Court in resolving what to do next.
Given the seriousness of the issues as they were opened to the Court by Mr Redmond, the lack of prejudice to the Council if a short injunction were laid and the need to afford the Council a proper opportunity to meet Mr Stapleton's application, the Court granted an injunction for one week restraining the Council from terminating Mr Stapleton's employment. I was satisfied at the time that there was no prejudice to the Council by reason of an injunction for such a short period of time because the Council's solicitor informed me that, at least as far as the meeting of the Council that was apparently to take place that evening, the termination of Mr Stapleton's employment contract was not on the agenda. However, in ordering the injunction I made it clear that it was being made as on an ex parte basis and that on the next occasion the onus would be on Mr Stapleton to demonstrate why he was entitled to interlocutory relief.

Consideration

When the matter was called on today in the Duty List the Council opposed the continuation of any interlocutory relief. The fundamental submission advanced on behalf of the Council by Mr Moses SC was that none of the matters which were the subject of Mr Stapleton's submissions to the Court today disclosed a cause of action. The Court accepts the Council's submission generally for the reasons advanced by Mr Moses SC. I will deal briefly with each of the matters advanced by Mr Redmond on behalf of Mr Stapleton and explain why the Court is satisfied that this is not a case in which interlocutory relief should be granted. The reasons reflect Mr Moses SC's submissions.
There are four reasons why the Court has the reached its conclusion.
First, the evidence does not in fact disclose any imminent threat to terminate Mr Stapleton's employment. Whatever process is currently being engaged in between the parties consequent upon Ms Seymour's report appears to be continuing. There is no proven basis on which I could find that there is a risk of imminent termination.
Second, and related to the first point, there is no evidence before the Court that would enable me to find that the Council has departed from its stated intention to negotiate with Mr Stapleton expressed in its resolution of 4 February 2019 (see paragraph [12] above). Even if that resolution were capable of constituting a representation that would give rise to an estoppel (a matter about which I express no view because, while it was referred to in Mr Redmond's written submissions, it was not the subject of oral argument before me today), the evidence does not support the conclusion that there has been, or is about to be, any departure from any such a representation.
Third, to justify an injunction of the kind which Mr Stapleton seeks, there must be a prima facie case that his employment is about to be wrongfully terminated. There is no evidence that suggests that will be the case. Mr Redmond submitted that the way in which the wrongful termination was threatened was because the Council had not engaged the dispute resolution mechanism set out in clause 17 of the Contract. The difficulty with that submission is that Mr Redmond also accepted that the only course of action which might be in contemplation by the Council was giving the 38 weeks' written notice or making the termination payment referred to in clause 10.3.5 of the Contract.
If that is right, then the Council's entitlement under that subclause is to terminate the Contract without cause by giving the written notice or making the payment. Once that point is appreciated, I do not think it is seriously arguable that compliance with the dispute resolution mechanism in clause 17 (assuming without deciding that it is otherwise enforceable) is a contractual prerequisite to the Council's exercise of the right under clause 10.3.5. In circumstances where the Council has a right to terminate without cause by giving the written notice or by making the termination payment under subclause 11.3, I do not think that could constitute, or be affected by, a dispute that engaged the dispute resolution provisions in clause 17.
Fourth, it was submitted by Mr Redmond that this was a case where Mr Stapleton's contract of employment should be protected by an injunction because damages would not be an adequate remedy. There are at least two difficulties with this submission.
First, before one gets to the question of whether or not damages are an adequate remedy, the Court must be satisfied that there is a serious question to be tried that a wrong has been or will be committed that will give rise to an entitlement to damages. For the reasons given in paragraphs [19] and [20], that requirement has not been satisfied.
Second, Mr Redmond did not resile from the proposition that, in general, the Court will not grant specific performance of contracts of employment. Nevertheless, he submitted that the present case was one which fell within what he described as extraordinary exceptions to that approach. He said this was an extraordinary case because the fact of Ms Seymour's investigation was in the public domain and it would be assumed that any termination of Mr Stapleton's employment was because of an adverse finding by Ms Seymour. This, it was submitted, would constitute a serious blow to Mr Stapleton's reputation which could not be adequately remedied in damages.
This submission is no more than speculation. Its logical consequence would be that Mr Stapleton could not be terminated. In any event, clause 10.3.5 again provides a complete answer because under clause 10.3.5 the Council can terminate the Contract without cause. I am therefore unable to see how the principles concerning specific performance of employment contracts in what are said to be extraordinary situations can be invoked in the present case in the face of clause 10.3.5.
For these reasons, Mr Stapleton's application for interlocutory relief will be dismissed.

Costs

The Council has sought an order that its costs of the application be paid by Mr Stapleton forthwith and on the indemnity basis.
Mr Moses SC submitted that this was an appropriate case for there to be an order for costs on the indemnity basis. This was because Mr Stapleton, properly advised, should have realised that he had no basis to make the present application. Insofar as an order for costs to be paid forthwith is concerned, it was submitted that this application has been a discrete part of the litigation never to be visited again and it was therefore appropriate, in accordance with the usual principles relating to such orders, that the costs be payable forthwith.
Mr Redmond responded that his client had a reasonable basis to bring the application out of concern that the Contract was about to be terminated. That basis was identified as an email sent by the Council's solicitor to Mr Stapleton's solicitor on 8 February 2019 which said: "The Council regards Ms Seymour's investigation and the negotiations seeking a termination of Mr Stapleton's contract of employment by mutual agreement as two separate and distinct issues. As previously advised, communications regarding Ms Seymour's investigation report should be directed to Holding Redlich Lawyers."
Reading those sentences as favourably as the Court can towards Mr Stapleton, I cannot see how that communication has any rational relationship to the basis on which the present application could or should have been brought. It may be that view was formed by reading the email against the background of other material not before the Court. However, I must proceed only on the basis of the evidence that has been admitted on the application. The communication which I have quoted does not, in my opinion, justify the application that was brought which had to be, and was, considered on its legal merits.
The Court accepts the Council's submissions as to why it is appropriate to order the plaintiff to pay the defendant's costs on the indemnity basis and that those costs be payable forthwith as assessed or agreed.

Conclusion

The Court accepts Mr Moses SC's suggestion that the parties provide short minutes of order giving effect to these reasons and providing for further interlocutory steps in relation to the Summons.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 February 2019

At a glance

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Judgment (6 paragraphs)

Parties

Cited By (3)