(11) The decision of the respondent's directors to permit the applicant to exercise only 30% of his options entitlement but where the General Manager of the Wholesale Trusts Division recommended the applicant be permitted to exercise 60% of such options held by him.
45 Hungerford J noted that in the cases of GIO Australia Limited v O'Donnell (1996) 70 IR 1 and Westfield Ltd v Helprin (1997) 82 IR 411 the successful applicants were awarded share options in the same proportion as the completed service of the option qualifying period. His Honour stated that, unlike the present matter, in both those cases there "was an issue about the adequacy of the performance of the employee concerned".
46 His Honour concluded that:
In a situation of redundancy where termination, like death or illness/disability, is beyond the employee's power or control, calls, in my view, for more favourable treatment than an approach merely equating the entitlement to options in the same proportion as the completed service of the option qualifying period.
47 His Honour ordered that the respondent be allowed to exercise the remaining 105,000 options on a date selected by him not later than 30 months after the date his employment terminated (by 13 February 2001).
48 Hungerford J ordered that the respondent be paid the maximum bonus of 40 per cent of his base remuneration for the financial year ended 30 June 1998 (a total of $100,000).
49 His Honour found that:
the applicant was fairly entitled to one month's notice plus 9 months' payment of base remuneration as compensation for both notice and redundancy.
50 After making allowances for benefits already received, his Honour awarded an additional payment of six months' base remuneration ($125,000).
51 Hungerford J ordered that the contract be varied (under s 106(1)) to reflect his conclusions in relation to notice and severance payments, bonus, and options. The deed poll was also varied to reflect the conclusions regarding the options. In addition, the appellant was ordered (under s 106(5)) to pay the respondent a total of $225,000 plus interest (for notice and severance, and for bonus).
Leave to Appeal
52 Section 188(1) of the Act provides that an appeal may only be made with leave of the Full Bench. Section 188(2) provides that leave will be granted if the Full Bench is of the opinion that the matter is of such importance that, in the public interest, leave should be granted. Section 188(3) provides that the Full Bench may deal with an application for leave to appeal separately and without conducting a hearing into the merits of the appeal. In the present proceedings the appellant and respondent put their submissions both as to the question of leave and as to the merits of the appeal.
53 The law relating to unfair contracts in New South Wales has developed into a substantial and important area of jurisprudence within the jurisdiction of the Commission. Within this jurisdiction there have been an increasing number of cases in recent years involving claims by senior corporate executives or highly paid employees seeking relief under s 106 (or its predecessor). The case law has developed to address particular features associated with the employment contracts or arrangements for this class of employee or, in some cases, independent contractor. These features have included loss of value of share options, bonuses or superannuation on termination; the fate of loans from the employer on termination; post employment restraints of trade; the fairness of notice periods and redundancy; mitigation of loss; and the capacity of this class of skilled and experienced employee or contractor to bargain on equal terms with the employer or principal regarding the terms of their contract. Cases that fall into this category include: Caulfield v Broken Hill City Council (1995) 60 IR 221; Pullen v R & C Products Pty Ltd (1994) 60 IR 183; GIO Australia Ltd v O'Donnell (1996) 70 IR 1; Michel v Ogilvy & Mather Pty Limited (1996) 71 IR 417; David Jones Ltd v Cukeric (1997) 78 IR 430; Harcourt Brace & Co (Aust) Pty Ltd v Cory (1997) 81 IR 321; Newton v Goodman Fielder Mills Ltd (1997) 81 IR 227; Payne v Foxboro L & N Pty Ltd (1998) 81 IR 404; Westfield Ltd v Helprin (1997) 82 IR 411; Gala v State Bank of New South Wales t/a Colonial State Bank (No. 2) (1998) 84 IR 216; Stone Microsystems (Aust) Pty Limited & Stone Group Asia Pacific Investment Ltd v Kwong & Datamax Pty Ltd (1997) 42 NSWLR 160; (1998) 85 IR 237; Paviour-Smith v National Mutual Life Association of Australasia Ltd (1999) 91 IR 8; Bell v Macquarie Bank Limited (No 4) (1999) 93 IR 191; Ruefli v Allam Bros Australia Pty Limited (unreported, Glynn J, 26 October 1999; [1999] NSWIRComm 471; Beahan v Bush Boake Allen Australia Ltd (2000) 99 IR 1; Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 49 NSWLR 160; (2000) 99 IR 69; Barclays Australia Investment Services Ltd v Nordby (2000) 99 IR 258; Lavings v Barclay Mowlem Construction (NSW) Limited (1994) 99 IR 247; Ross v GN Comtext (Australia) Pty Limited (2000) 107 IR 1; Martin v National Textiles Limited (unreported, Schmidt J, 21 February 2000); Caine v LEP International Pty Limited (unreported, Glynn J, 21 October 1999); King v State Bank of New South Wales [2000] NSWIRComm 229; Henshaw v Sqribe [2000] NSWIRComm 279; Canizales v Microsoft Corporation (2000) 99 IR 426; Graham v Macquarie Bank Limited [2000] NSWIRComm 253; Munro v Chubb Securities Holdings Australia Ltd & ors [2000] NSWIRComm 215; Moray Vincent v Merrill Lynch Australia Pty Ltd [2000] NSWIRComm 160; Simon Richard Lane v Commonwealth Bank of Australia [2000] NSWIRComm 274; Smith v Boral Limited [2000] NSWIRComm 267 (affirmed on appeal: Origin Energy Limited v Smith [2001] NSWIRComm 308).
54 In this appeal, the appellant complained that in the absence of "consistent principles to determine the quantum of compensation in unfair contract cases", particularly in connection with the "corporate executive" line of cases, outcomes will be more in the nature of a lottery than a rational application of legal principle. This was so, it was contended, because of the very broad discretion accorded to trial judges in determining unfairness under s 106, where different minds may take very different views, including widely divergent views, about what is an appropriate remedy. Consequently, Mr Shaw submitted, the Commission should in this case formulate principles to guide and circumscribe the exercise of that discretion. We reject categorically Mr Shaw's analogy of a lottery. Such a submission ignores the very substantial body of precedent that has built up around s 106 and its predecessors over the past 42 years and, indeed, ignores the constraints within the section itself. There has been a considerable refinement of the principles to be applied to such cases arising under s 106 of the Act.
55 Senior counsel for the appellant submitted that if an executive earning a salary of $250,000 per annum could achieve an outcome after three years of $1.4 million upon redundancy in proceedings under s 106 of the Act, such an outcome constituted a "corporate executive cornucopia". The superficiality of such a proposition, in the absence of any reference to the bonus and share option elements of the respondent's remuneration package, is manifest and ordinarily, would not warrant judicial comment. However, we are moved to make the following observation: the fact that outcomes in proceedings under s 106 in favour of applicants are now in some cases being measured in millions, rather than thousands of dollars is not so much a reflection of the manner in which the Commission in Court Session exercises its jurisdiction. Rather, it is largely a function of the labour market, particularly in the finance and technology sectors, and the relatively high level of remuneration, including arrangements as to share options and bonuses, paid to many senior executives. Share option plans have become a more common element of remuneration packages in the private sector and may increase the level of an executive's benefits quite significantly.
56 We should add that it has often been the Court's experience in the unfair contracts jurisdiction that if the respondent employer had taken reasonable care in negotiating and explaining the terms of the contract with an employee and had given more attention to ensuring an understanding and acceptance by the employee of the specifics of the arrangements to apply upon the various circumstances under which separation may occur, the employer could have avoided the consequences of what otherwise was found to have been unfair. In this respect, the exercise of the power under s 106 of the Act merely reflects the need for some employers to adjust their employment practices to conform with the law in this State, which mandates fair dealing between the parties to employment contracts.
57 Notwithstanding these observations we grant leave to appeal in this matter. We consider the matter has sufficient elements of importance and public interest to justify granting leave to appeal: Gala v State Bank of New South Wales at 225. We consider it is appropriate to consider at appellate level the submissions by the appellant regarding the need for principles or guidelines in relation to the exercise of discretion by single judges under s 106 of the Act so as to examine whether any further development or refinement of the relevant principles is warranted. The case before us would seem to be an appropriate vehicle for doing so, typifying as it does the "corporate executive" line of cases.
58 We note the respondent's contention that, in raising on appeal the issues of principles to be applied for the assessment of compensation where there has been a misrepresentation and the principles to be applied in relation to mitigation, the appellant was raising new issues not "squarely raised at first instance": Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381-382. Mr Kimber also contended that, in any event, principles for the assessment of compensation and principles relating to mitigation are well settled and that, therefore, the Court would not be disposed to grant leave to appeal: Cash Converters Pty Ltd v Yildiz (1999) 94 IR 474 at 475-476. However, given the scope of the submissions by senior counsel for both the appellant and respondent regarding appropriate principles and, as contended by Mr Shaw, the desirability of potential litigants having available a coherent, contemporary statement in that respect, we consider this appeal is an appropriate vehicle to consider such principles.
Approach on Appeal
59 The approach we take on this appeal is determined by the provisions of Pt 7 of Ch 4 of the Act, in particular, s 191. We note that Hungerford J made a number of findings of fact including findings in relation to notice, redundancy, bonus, share option terms and the effect of the removal of Mr Hoog Antink from the Wholesale Trusts Division. The appellant did not challenge the findings of primary fact, with the exception of the findings with respect to the effect of the transfer of Mr Hoog Antink, the finding that Mr Hoog Antink recommended that the respondent get 60 per cent of his options on termination and that the subsequent 1998 share option scheme was 'extended' to cover redundancy.
60 The principles applying to appeals from findings of fact in unfair contract proceedings are well established. It was stated in Port Macquarie Golf Club v Stead (1996) 64 IR 53 at 59 that:
4. In addressing error, an appellate court should not interfere with the trial judge's conclusions on facts unless it is of the opinion that they were not reasonably open (or were clearly wrong) on the evidence: Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 107; Clarke & Walker Pty Ltd v Secretary of the Department of Industrial Relations (1985) 3 NSWLR 685 at 690-692; (1985) 14 IR 269 at 273-274; Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178ff; Hussmann Australia Pty Ltd v Walker (1993) 48 IR 396 at 406; Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 129; and Haynes at 154.
61 Mr Kimber, for the respondent, contended that the principles to be applied in relation to an appeal from a finding that a contract is unfair under ss 187 and 191 of the Act, do not include proposition 2 as set out in Port Macquarie Golf Club v Stead at 59, namely:
In determining whether a finding of unfairness or otherwise under the section has been established, the general principle is that an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge; in deciding what is a proper inference to be drawn, the appellate court will give respect and weight to the conclusions of the trial judge, but once having reached its own conclusion, will not shrink from giving effect to it: Warren v Coombes (1979) 142 CLR 531 at 551.
62 The majority in Abboud confirmed the position that (at 43):
An appellate court is generally regarded to be in as good a position as the trial judge to decide on the proper inference to be drawn from the facts that are undisputed or established by the trial judge.
63 Mr Kimber sought to have these authorities overturned on the basis that the Industrial Relations Act 1996 evinces an intention to allow for a narrower right of appeal than that allowed under the 1991 Act. Mr Kimber's propositions in this respect may be summarised as follows:
· The appeal regime under the 1991 Act included ss 297(3) and (4). These provisions reflected overwhelmingly the relevant parts of s 75A of the Supreme Court Act 1970, which was the regime under consideration in Warren v Coombes.
· The Industrial Relations Act 1996 deliberately narrowed the scope of appeals, inter alia, from decisions under s 106. This is apparent from any reading of the language found in ss 191 and 192 of the 1996 Act. In particular, the utilisation of the word "quash" in s 192(1)(a) is highly significant as it is suggestive of a power to consider and rule on errors in the decision appealed from. Furthermore, the 1996 Act has removed any suggestion that the Full Bench may exercise the functions of the court or person whose decision is the subject of appeal and has removed the power to make any finding or assessment "which ought to have been made or which the nature of the case requires" (as was formerly found in s 297(4) of the 1991 Act).
· Consistent with the above radical change in the nature of such appeals and the powers of the Full Bench on appeal, s 192(1)(b) and (c) countenance the prospect of referral back to the judge at first instance to take all necessary steps to then determine the matter in accordance with the law.
· Any reading of the statutory regime now found in the 1996 Act confirms the view that an appeal from a finding under s 106 that a contract is unfair is an appeal stricto sensu as the question of unfairness has been held to be a question of fact and/or law.
· The correct approach on appeal is as enunciated in Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 129-130 per Kirby P.
· The level of protection or respect given to a trial judge's decision, especially involving the application of a remedial statute expressed in extremely broad terms is, clearly stated by Kirby P in Beneficial Finance Corporation v Karavas (1991) 23 NSWLR 257. Given that such a cautionary approach is appropriate even in an appeal by way of re-hearing (as was the case in Beneficial Finance), the position must be a fortiori in an appeal stricto sensu at least with respect to the question of whether the contract or arrangement was relevantly "unfair".
64 Mr Shaw contested the respondent's interpretation of ss 191 and 192 of the 1996 Act, submitting that there had been no "radical" change in the statutory appeal regime from the 1991 Act to the 1996 Act so as to displace the Warren v Coombes test being applied on appeal to findings of fairness or unfairness. In this respect, we agree with senior counsel for the appellant.
65 Section 297 of the 1991 Act provided that:
297. The Full Industrial Court
(1) The Full Industrial Court consists of 3 Judges, whether or not including either the Chief Judge or the Deputy Chief Judge, or both of them.
(2) The Full Industrial Court has jurisdiction to hear and determine:
(a) an appeal from a decision of the Commission, or a reference by the Commission, that may be made to the Full Industrial Court under Part 4; and
(b) an appeal to it allowed by special leave of the Full Industrial Court granted to an aggrieved party, or to the Crown, from a decision of a Judge sitting alone on a question of law arising in proceedings before the Commission; and
(c) a question of law that arises in the exercise of the jurisdiction of the Industrial Court by a Judge sitting alone and that is referred to the Full Industrial Court by the Judge; and
(d) an appeal to it from a decision of a Judge sitting alone in the exercise of the jurisdiction of the Industrial Court otherwise than on an appeal; and
(e) any matter in respect of which this Act or another Act confers jurisdiction on the Full Industrial Court.
(3) The Full Industrial Court may exercise the functions of the court or person whose decision is the subject of an appeal, including:
(a) amendment; and
(b) the drawing of inferences and the making of findings of fact; and
(c) the assessment of damages and other money sums.
(4) The Full Industrial Court may make any finding or assessment, give any direction for entry of judgment, or make any order, which ought to have been made or which the nature of the case requires.
(5) More than one sitting of the Full Industrial Court may be held at the same time.
66 Sections 191 and 192 of the 1996 Act provide that:
191. Nature of appeal
(1) An appeal to a Full Bench of the Commission under this Part is not by way of a new hearing and is to be determined on the evidence and material adduced in relation to the decision appealed against.
(2) However, the Full Bench may, by leave, receive further evidence if it considers that special grounds exist or if the evidence concerns matters occurring after the decision appealed against.
(3) To avoid doubt, the Full Bench cannot merely substitute its decision on the matter, but must follow the principles applying to appeals from discretionary decisions, whether or not further evidence is received.
Note. The above section generally follows the decision of the Full Industrial Relations Commission in Big W Discount Stores v Donato (1995) 58 IR 239 as to the nature of an appeal. The appeals in respect of which the section applies include appeals in connection with awards, unfair dismissals, approvals of enterprise agreements, unfair contracts or contraventions of dispute orders.
192. Powers on appeal
(1) On an appeal under this Part to a Full Bench of the Commission, the Full Bench may (in accordance with this Act):
(a) confirm, quash or vary the decision of the Commission concerned, or
(b) direct a member of the Commission to take further action under this Act to carry its decision on the appeal into effect, or
(c) refer the matter back to the member of the Commission, with such directions or recommendations as the Full Bench considers appropriate.
The Full Bench may determine a part of the matter and refer the remainder back to the member of the Commission.
(2) The Full Bench may direct that its decision on an appeal under this Part take effect as from any specified date after the lodging of the original application relating to the decision.
67 We consider that the powers conferred on a Full Bench for the purposes of appeal are plenary in their scope and character and there is no warrant for reading them down in the manner contended by the respondent. The respondent submitted that the 1996 Act had removed the power of a Full Bench to make any finding or assessment "which ought to have been made or which the nature of the case requires" as was formerly found in s 297(4) of the 1991 Act and had removed the function of "the drawing of inferences and the making of findings of fact" previously found in s 297(3) of the 1991 Act. As we understand the respondent's submission, a Full Bench hearing an appeal from a single judge under s 106 of the 1996 Act, is limited to determining whether there had been an error of law or fact and that, if so, the matter was to be referred back to the single judge to determine in accordance with the law.
68 If that were right it seems to us that the power of a Full Bench in s 192(1)(a) of the 1996 Act to vary the decision appealed from would be otiose. The power to vary, in our opinion, enables any error of fact or law at first instance to be corrected by the Full Bench on appeal. That necessarily involves the Full Bench arriving at its own conclusion about the correct law, the correct facts and the inferences to be drawn from those facts.
69 The formulations in Port Macquarie Golf Club v Stead at 59-60 regarding appeals from discretionary judgments, although made in reference to the provisions of the 1991 Act, in our view remain applicable to appeals from judgments under s 106 of the 1996 Act, namely:
2. In determining whether a finding of unfairness or otherwise under the section has been established, the general principle is that an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge; in deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusions of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it: Warren v Coombes (1979) 142 CLR 531 at 551.
…
10. The proper approach as to the discretionary aspects requires an appellate court not to reverse a decision of the trial judge on a matter involving the exercise of discretion unless it reaches a clear conclusion that the members of the appellate court would have taken a view different from that of the trial judge if they had been in his place and that the trial judge had failed properly to exercise the discretion committed to him: House v The King (1936) 55 CLR 499 at 504-505; Mace v Murray (1955) 92 CLR 370 at 378; Wilson v Gozney [1978] AR (NSW) 134 at 150; Baker at 267; and Haynes at 154.
70 In Abboud at 44 Wright J, President and Walton J, Vice President said of the formulations in Port Macquarie Golf Club v Stead:
These statements were made in relation to the previous legislation, however, in our view, the same principles apply to an appeal as to proceedings under s 106 of the Act.
71 The application of these principles enunciated in Port Macquarie Golf Club v Stead was confirmed in Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 at 428, where the Full Bench stated:
Nevertheless, and notwithstanding the grant of leave, this appeal falls to be considered in accordance with the ordinary principles as an appeal stricto sensu and having in mind the statutory requirement in s 191(3) of the Industrial Relations Act obliging the Full Bench to follow the principles applying to appeals from discretionary decisions: see Big W Discount Stores v Donato (1995) 58 IR 239 at 242-244; Re Solicitors (State) Award (No 3) (1997) 72 IR 225 at 234-235 and the cases cited therein. In the result, it is only open for us to view the challenged decision on appeal in accordance with the proposition that the exercise of a discretion by the primary judge has long required that an appellate court is not justified in interfering with the decision made unless it reaches the clear conclusion that by reason of some error, whether of fact or of law, the primary judge not only has taken a different view but has failed properly to exercise the discretion conferred: see also Mace v Murray (1955) 92 CLR 370 at 378; and Port Macquarie Golf Club Ltd v Stead (1996) 64 IR 53 at 58-60. The principle was restated by a Full Bench ( Wright J, President, Walton J, Vice-President and Peterson J) of the Court in Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 446 and again in Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 at 42-43 (per Wright J, President, and Walton J, Vice-President); it needs no further elaboration here.
72 As to inferences to be drawn from facts, in Abboud the majority pointed out that whether a particular impugned contract or arrangement is unfair has been regarded as an inference drawn from the facts as found or agreed. In such circumstances an appellate court is generally regarded to be in as good a position as the trial judge to decide on the proper inference to be drawn from facts that are undisputed or established by the trial judge. In deciding what is the proper inference to be drawn, the appellate bench should give effect to its own conclusions.
73 We intend to approach the appeal on the basis of the principles set out in Port Macquarie Golf Club v Stead, Ace Business Brokers and Abboud. In doing so, we note the strong submission by Mr Kimber regarding the discretionary aspects of the judgment below, which he described as at "the heartland" of the exercise of discretion by a single judge under s 106 of the Act. It is important to acknowledge the respect that must be given to the trial judge's decision, especially involving the application of a remedial statute expressed in broad terms, and that a court on appeal should not and would not intervene simply on the ground that it would have exercised a discretion differently.
Principles proposed by appellant
74 We turn now to consider the principles proposed by the appellant to guide the exercise of judicial discretion in making orders under s 106(5) of the Act. These principles are summarised in the appellant's written submissions and are as follows:
The first and ultimately guiding principle is that compensation must be aimed to "recompense an applicant for what they have lost": Brown v Rezitis (1970) 127 CLR 157 at 170 per Menzies J. Compensation should accordingly be determined by asking the question: what is the loss incurred by the applicant caused by the unfair contract? Such a question would involve the Court examining the actual loss suffered (as against, for example, loss of expectation) and ensuring that there is a causal nexus between any claimed loss and the unfair contract (or the conduct which rendered the contract unfair).
The second principle is that in determining compensation orders, reliance should be placed on the doctrine of restitution, in order to avoid excessive awards or indeed awards that do not adequately compensate an aggrieved applicant. This second principle might be seen to be one way of applying the first principle. Prima facie, any compensation above that to adequately compensate for the loss suffered places the applicant in the position of a windfall gain.
Thirdly, in determining the loss, and what would amount to appropriate restitution, the Court would have regard to the principles for the assessment of compensation at common law, and under the similar ( sic ) Trade Practices Act.
Fourthly, the Court would consider any possible compensation award in light of established industrial standards, including where relevant the Redundancy Test Case standard and the usual terms contained in awards dealing with termination.
Fifthly, the Court would have regard to the overall quantum of any compensation order, and determine whether it was proportional to the unfairness evidenced in the contract or conduct.
75 The appellant submitted that in order for its proposed principles to be effective the principles would not be considered merely 'where appropriate'. Such an approach, it was submitted, would render the principles illusory, because in the absence of guidance as to when they are not appropriate there could be no certainty that they might be applied in any particular case. It was submitted that "[r]ather, such principles must be considered in each case, although the extent to which they affect the order of compensation will depend upon the individual circumstances of each case."
76 As to the first and second principles, the appellant contended that compensation should provide restitution, that is recompense for loss suffered: Brown v Rezitis (1970) 127 CLR 157 at 164, 170. Compensation should not be fixed at an amount greater than the loss suffered: Parry v Cleaver [1970] AC 1 at 13. Monetary relief cannot go beyond compensating for the detriment suffered. The question to be asked by the Court, it was submitted, is: what is the loss incurred by the applicant caused by the unfair contract? In other words, any compensation must be aimed at compensating the applicant for any actual loss they have incurred but that this does not extend to loss of expectation. In proposing these principles the appellant recognised in its submissions that:
It is well established that s 106(5) provides a very wide power to grant compensation, not limited by common law concepts of assessment of damages. But that is not to say that there are no restrictions on the power to award compensation, namely principles which should be used as a guide, and in the circumstances of this case applied in determining the appropriate level of compensation.
77 The respondent's position on the other hand was that "[s]o long as relevant nexus exists between the unfairness declared by the Court and the avoidance or variation which follows there is no limit to the approach that may be taken by the Court in assessing what payment is just in all the circumstances": Avis v Australian Mutual Provident [1997] NSWIRComm 182. The respondent also submitted:
The wording of s 106(5) itself provides real guidance as to an appropriate monetary order in that the payment must be "in connection with" the contract set aside or varied and it must otherwise be "just in the circumstances of the case." The respondent submits that if the Commission is satisfied, as a matter of discretion, that a contract or arrangement should be varied then it is clearly not surprising and indeed is contemplated by the section, that a monetary order may well be made that will put the applicant in a position that he/she would have been in had the contract contained the variations made by the Commission and those new provisions had been complied with by the respondent, either at the point of termination or earlier (e.g. in the case of bonuses).
78 As we understand the appellant's position regarding the first two principles it proposes, in making any orders under s 106 the Court should approach the task by assessing what is the actual loss suffered by the applicant. Prima facie, the appellant submitted, any compensation above that required to adequately compensate the applicant for the loss suffered would place the applicant in a position of a windfall gain. Mr Shaw contended that this approach was consistent with Brown v Rezitis (1970) 127 CLR 157. Mr Kimber, for the respondent, submitted that subject to the relevant nexus existing between the unfairness and the avoidance or variation of the contract or arrangement, there was no limit to the approach that may be taken by the Court in assessing what payment is just in all the circumstances.
79 In Brown v Rezitis, Barwick CJ, in considering the grounds under s 88F of the Industrial Arbitration Act 1940 on which the Industrial Commission of New South Wales could vary or avoid contractual arrangements, stated at 164 and 165:
The five grounds on which the Commission may vary or avoid contractual arrangements are not homogeneous. Only two of them refer to the avoidance of the award for the underpayment of a worker in industry. Consequently the nature of the orders which may be made under sub-s. (2) will of necessity cover a wide field. But underlying sub-s. (2) is I think a broad concept of a restitution of the parties to a situation which existed before the making of the contractual arrangement as well as in an appropriate case to make remedial provision for what has taken place or been done under the contract in the meantime. This, it seems to me, cannot of necessity and in all cases and with relation to an arrangement varied or avoided on each of the grounds in sub-s. (1) be confined to an order for payment of money by one of the parties.