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Jakeman Constructions Pty Ltd v Boshoff

 

[2014] QCA 354

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

Jakeman Constructions Pty Ltd v Boshoff [2014] QCA 354

PARTIES:

JAKEMAN CONSTRUCTIONS PTY LTD
ACN 056 027 911
(applicant)
v
JOHANNES CHRISTOFFEL BOSHOFF
(respondent)

FILE NO/S:

Appeal No 5352 of 2014

DC No 4901 of 2013

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave s 118 DCA (Civil)

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

19 December 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

16 October 2014

JUDGES:

Fraser JA, Mullins and Henry JJ

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

1.Grant the application for leave to appeal.

2.Allow the appeal with costs (not including the costs of the applicant’s application for leave to adduce evidence in the appeal).

3.Set aside the orders made in the District Court on 14 May 2014.

4.Instead order that the respondent’s application for summary judgment be dismissed.

5.The applicant’s application for leave to adduce evidence is refused on the grounds that it is not necessary to consider it.

6.The applicant is to bear its own costs of the application for leave to adduce evidence.

7.The respondent be granted an indemnity certificate in respect of the appeal under s 15 of the Appeal Costs Fund Act 1973 (Qld).

CATCHWORDS:

PROCEDURE – JUDGMENTS AND ORDERS – IN GENERAL – STATEMENT OF REASONS FOR DECISION – where the respondent sued the applicant for damages for “wrongful dismissal” and “breach of contract of employment” and applied for summary judgment – where the primary judge gave summary judgment for the respondent’s claim for “wrongful dismissal” – whether the primary judge gave adequate reasons for giving summary judgment

PROCEDURE – INFERIOR COURTS – QUEENSLAND – DISTRICT COURTS CIVIL JURISDICTION – PRACTICE – PROCEDURE BEFORE TRIAL – DISPOSITION WITHOUT TRIAL – where the respondent sued for “wrongful dismissal” and was granted summary judgment – where there will be a trial for the respondent’s remaining claims for relief – where the applicant employer had dismissed the respondent with four weeks pay in lieu of notice – where the applicant argues the fixed term employment contract had been previously varied to permit this, which gave rise to an arguable defence to the part of the claim for which summary judgment was granted – whether the applicant had no real prospects of successfully defending that part of the claim – whether there was no need for a trial of that part of the claim

EMPLOYMENT LAW – CONTRACT OF SERVICE – VARIATION OF CONTRACT – where the respondent had pleaded he had been wrongfully dismissed, but had not pleaded that he had accepted the dismissal as a repudiation and elected to terminate the employment contract – whether the statement of claim required amendment

Appeal Costs Fund Act 1973 (Qld), s 15

Uniform Civil Procedure Rules 1999 (Qld), r 292

Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41, cited

AL Powell Holdings Pty Ltd v Dick [2012] QCA 254, cited

Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435; [1946] HCA 25, cited

Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24, cited

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337; [1982] HCA 24, cited

Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219; [2009] QCA 66, cited

Visscher v Giudice (2009) 239 CLR 361; [2009] HCA 34, cited

COUNSEL:

S D Malcolmson for the applicant

R Reed for the respondent

SOLICITORS:

Eaton Lawyers for the applicant

Just Us Lawyers for the respondent

  1. FRASER JA:  The respondent sued the applicant in the District Court for damages for “wrongful dismissal” and “breach of contract of employment…”.  After pleadings had been exchanged, the respondent applied for summary judgment.  The primary judge ordered judgment for the respondent “in his claim for wrongful dismissal” and that those damages be assessed at the trial of the respondent’s remaining claims for relief.  The applicant was ordered to pay the respondent’s costs of the application.  The applicant has applied for leave to appeal.

The issues and arguments in the summary judgment application

  1. The relevant allegations in the statement of claim and the defence were as follows:
  1. The respondent alleged that the contract of employment was “partly oral, partly written and contained implied terms”.  The applicant denied that allegation and alleged that the contract was solely in writing.
  1. The respondent alleged that the contract “contained the following written terms…”, which concerned salary, accommodation, expenses and medical insurance, including that (subject to an irrelevant qualification) the period of the respondent’s employment would be from about 23 January 2009 until 30 November 2012 with a starting salary of $85,000 per annum.  The applicant admitted that allegation.
  1. The respondent alleged that the contract contained a term (according to particulars this was partly oral and partly written) that the plaintiff would receive a specified share of the applicant’s net profits.  The applicant denied that allegation and alleged that there was no such term.
  1. The respondent alleged that it was an implied term that the applicant would not “without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the parties”.  The applicant denied that allegation and alleged that “any consequence of disturbing such a relationship was done so with reasonable cause…”.  The applicant refused to give particulars of that “reasonable cause”.  The respondent threatened but did not pursue an application for those particulars. (The respondent did not rely upon this allegation at the summary judgment hearing, presumably in view of the High Court’s decision in Commonwealth Bank of Australia v Barker.)[1]
  1. The respondent alleged that the contract was varied from time to time to increase the respondent’s salary, ultimately to “$128,440.00 per annum from 7 July 2010”.  The applicant admitted that allegation.
  1. The respondent alleged that on 29 April 2011 the respondent was summarily dismissed from employment with four weeks’ pay in lieu of notice.  The applicant admitted that allegation.
  1. The respondent alleged that the dismissal was “a wrongful dismissal in breach of the [respondent’s] contract of employment”.  The statement of claim did not identify the term of the contract which was alleged to be breached.  The applicant denied the allegation of breach and alleged that the termination of employment was lawful and not in breach of the contract.  (The respondent did not seek particulars of that allegation but his solicitor did write to the applicant’s solicitor complaining of the applicant’s defective pleading of the allegation and threatening to apply for an order striking it out.)
  1. The only evidence upon which the respondent initially relied in support of his summary judgment application, apart from the pleadings and correspondence between the lawyers, was a two paragraph affidavit in which he identified himself as the plaintiff and annexed copies of the documents described in the particulars of the alleged employment contract, namely, an email sent to the respondent by the applicant and an unsigned “letter of offer of employment” attached to that email.  Both documents were dated 19 September 2008.  The unsigned letter offered the respondent employment as a building estimator and construction project manager from 3 November 2008 to 30 November 2012 at an annual salary of $80,000 per year (exclusive of superannuation) and upon other terms.  There was no reference in the letter to profit sharing.  The email mentioned that Mrs Jakeman was typing the email as Mr Jakeman spoke to the respondent about “the base salary of $85,000”.  The email referred to “profit sharing” and stated that “it is our plan to introduce this after 30 June 2009…”.  The email did not refer to any terms of the contemplated profit sharing or make any express promise about it.
  1. On 24 April 2014, nearly a month after the respondent filed the summary judgment application on 27 March 2014, the respondent’s solicitor replied to a request seeking particulars of the respondent’s allegation of “wrongful dismissal” by alleging that the dismissal was a breach of the alleged term that the period of the respondent’s employment would be from about 23 January 2009 until 30 November 2012.
  1. On 30 April 2014 Mr Jakeman swore an affidavit in which he deposed that an attached letter of offer was sent to the respondent on behalf of the applicant on or about 1 July 2010, that the letter “amended the terms on which the plaintiff was employed by the defendant”, and that it “was accepted by the plaintiff and took effect from 7 July 2010.”  The 1 July 2010 letter was evidently produced by amending the 19 September 2008 letter.  Relevantly, the 1 July 2010 letter stated that “[t]his offer will be from 1st July 2010 until 30 June 2011 and continue indefinitely unless the agreement is terminated by either party giving one (1) calendar month notice written notice of termination”.
  1. On 7 May 2014 the applicant’s solicitor wrote to the respondent’s solicitor contending that the applicant was not required to plead to particulars, the statement of claim did not plead any facts which explained what was meant by the allegation of “wrongful dismissal”, and the statement of claim wrongly assumed that a termination of employment before 30 November 2012 was necessarily a breach of contract.  Thereafter the parties’ solicitors advanced competing contentions in correspondence about the merits of the summary judgment application, whether the applicant should amend its defence to plead the variation alleged by Mr Jakeman, and who should bear the costs of the application if it did not proceed or was refused.
  1. At the hearing of the summary judgment application, the applicant’s counsel advanced three main arguments in support of the contention that it could not be held that the applicant had no real prospect of successfully defending the relevant part of the respondent’s claim or that there was no need for a trial of that part of the claim.  The first argument was that the applicant’s evidence of the 1 July 2010 variation revealed an arguable defence to the part of the claim for which summary judgment was sought.  The respondent replied that Mr Jakeman’s statement in his affidavit that the 1 July 2010 variation letter was “accepted by the plaintiff and took effect from 7 July 2010” was mere assertion.  It was submitted that, lacking any particularity, that assertion was insufficient to preclude summary judgment.  The applicant’s second argument was that the respondent’s statement of claim did not sufficiently plead that part of the claim, particularly because there was no fact pleaded which explained what was meant by “wrongful dismissal”.  In reply the respondent argued that, in addition to the particulars making it clear that “wrongful dismissal” was a reference to the alleged breach of the term of the contract that the applicant would be employed until 30 November 2012, the material facts were pleaded, namely, that term and the dismissal from employment on 29 April 2011.  The applicant’s third argument was that the respondent’s own evidence was insufficient to justify giving summary judgment on that part of the claim.  The respondent replied that it was not necessary to adduce any further evidence because the contract, including the relevant term, and the dismissal, were admitted in the defence.

A preliminary point

  1. In relation to the first argument, there is an ambiguity in the 1 July 2010 variation letter.  Does the provision permitting either party to terminate the agreement upon one month’s notice qualify only the provision that the employment is to continue indefinitely after 30 June 2011 or does it also qualify the provision for employment before that date?  Upon the former construction, the respondent could argue that the termination of the respondent’s employment breached the contract even if the contract was varied in the way alleged by the applicant, although the amount of damages, if any, attributable to the alleged “dismissal” effected on 29 April 2011 might be much less under the latter construction than the former construction.  If attention is confined to the text and such of the other contractual terms and circumstances as are admitted on the pleadings, the former construction seems more likely to reflect the intention of reasonable contracting parties, but the text does not clearly preclude the latter construction.  If there is any other extrinsic evidence which throws light upon which construction better reflects the intention of reasonable contracting parties, that evidence would be admissible at a trial.[2]
  1. In circumstances in which the primary judge was not asked to and did not deal with this construction point, the dispute on the pleadings about other alleged terms of the contract has not been determined or even addressed in evidence, and the correct construction of the variation letter might be influenced by evidence which might in any event be adduced at the trial required to determine the other terms of the contract and the quantum of the claimed damages, it is inappropriate to embark upon a determination of the construction question.  It is necessary to proceed upon the assumption that proof of the alleged variation might be held at a trial to amount to a defence to the part of the claim upon which the respondent was given judgment.

The application for leave to appeal

  1. The grounds of the application in this Court are that the primary judge erred in failing to provide any reasons for the orders, in finding that the applicant had no real prospects of successfully defending the part of the respondent’s claim for which summary judgment was given, and in finding that there was no need for a trial of that part of the claim. The applicant has also applied for leave to adduce evidence in the proposed appeal.
  1. The first ground of the application must be accepted. Shortly before the arguments in the District Court concluded the primary judge observed in relation to the applicant’s first argument that that the applicant could have denied but did not deny what the respondent asserted in his supplementary affidavit.  The primary judge also said to the applicant’s counsel that “I’m against you”.  Otherwise the primary judge elaborated upon his decision to give summary judgment only by stating that “I think it’s an appropriate case, having considered the matter and being taken to the relevant provisions of the material, for there to be summary judgment for the plaintiff against the defendant and I order accordingly.”
  1. The respondent did not contest the applicant’s argument that the primary judge was obliged to give reasons for entering summary judgment. A failure to give sufficient reasons for an order where reasons are required amounts to an error of law. So much is established by many authorities, including Drew v Makita (Australia) Pty Ltd[3] and AL Powell Holdings Pty Ltd v Dick.[4]  It is not necessary to discuss the extent of such reasons.  On any view the primary judge’s conclusion that he was against the applicant’s counsel and his formulaic statement that he had found this an appropriate case for judgment after considering the matter were not adequate reasons for giving summary judgment in this case.  It was open to the primary judge to give summary judgment only if the applicant had “no real prospect of successfully defending” the relevant part of the respondent’s claim and there was “no need for a trial” of that part of the claim,[5] yet the primary judge gave no reasons for concluding that those requirements were satisfied.  Indeed, the primary judge did not expressly find that either requirement was satisfied and it is not clear that such a finding can be implied.
  1. The respondent’s counsel argued that the reasons were to be gleaned from remarks made by the primary judge in the course of argument at the hearing of the summary judgment application. Understandably, that argument was not vigorously pressed. It is not possible to construct from the primary judge’s observations and questions during the argument any explanation for the primary judge’s implicit rejection of each of the three main arguments advanced for the applicants.  The primary judge’s failure to give reasons denied procedural fairness to the applicant.  Leave to appeal should be granted for that reason and this Court should exercise the discretion afresh.
  1. In exercising the discretion afresh, there are three main considerations why I would not grant summary judgment in this case.
  1. First, the respondent’s pleaded allegation that the applicant wrongfully dismissed the respondent from his employment was incapable of sustaining the part of the claim upon which the respondent was given summary judgment. The particulars given by the respondent were not a substitute for pleaded facts and they were in any event deficient.  It was necessary for the respondent to plead the material facts underlying the allegation of wrongful dismissal from employment and the material fact that the respondent accepted the wrongful dismissal as a wrongful repudiation and elected to terminate the contract of employment.  Subject to the effect of other provisions of a contract of employment, a wrongful dismissal ordinarily brings the relationship of employer and employee to an end, but the contract of employment continues until the employee accepts the wrongful repudiation of the contract evidenced by the wrongful dismissal and elects to terminate the contract.[6]  In the absence of an allegation that the respondent had terminated the contract his pleading did not disclose the cause of action for loss of bargain damages upon which he necessarily relied.
  1. There was thus a justification for the stance taken by the applicant that the statement of claim required amendment before the applicant should be required to amend its defence to plead the variation which it alleged. In this Court the respondent’s counsel appropriately disclaimed any contention that the omission from the defence of a pleading of the variation alleged by the applicant precluded the Court from taking that alleged variation into account.
  1. Secondly, it may fairly be said that Mr Jakeman’s statement that the 1 July 2010 variation letter was “accepted by the plaintiff and took effect from 7 July 2010” was mere assertion only if that statement is considered in isolation from the other evidence.  Of course that statement should be considered together with the other evidence.  It was common ground on the pleadings that there was a variation to the contract at the time identified by Mr Jakeman, at least to increase the respondent’s salary to $128,440.  The letter of 1 July 2010 to which Mr Jakeman referred in his affidavit offered precisely that variation to the salary.  That offer followed statements offering employment to the respondent “from 1st July 2010 until 30 June 2011 and continue indefinitely unless the agreement is terminated by either party giving one (1) calendar month notice written notice of termination” and that the letter “sets out the terms and conditions of the offer and your acknowledgment and acceptance of them.”  The effect of the respondent’s late affidavit was that he rejected the salary and other matters offered in the letter and Mr Jakeman withdrew the letter, but upon the evidence before the primary judge that version of events could not be reconciled with the admitted agreement for the increased salary – whereas that admitted agreement was wholly consistent with the applicant’s defence that the contract was varied in accordance with the 1 July 2010 letter.
  1. Thirdly, a trial was required in any event. Counsel for the respondent contended that the utility of granting summary judgment lay simply in clearing this issue out of the way. However the evidence at a trial to determine whether the contract included any, and if so what, profit share term (including in relation to what period) and to assess the damages claimed both in that respect and in relation to the alleged wrongful dismissal would probably, if not inevitably, traverse discussions and communications bearing also upon the terms of the contract relevant to the summary judgment application.
  1. In all of these circumstances in this case there was not that necessary “high degree of certainty”[7] about the ultimate outcome of the proceeding at a trial to justify granting summary judgment.  The primary judge was in error if he concluded that the applicant had no real prospect of successfully defending the relevant part of the respondent’s claim and that there was no need for a trial of that part of the claim.  The summary judgment must be set aside accordingly.
  1. In light of that conclusion it is not necessary to consider the application by the applicant for leave to adduce additional evidence in the appeal.

Disposition and orders

  1. I would grant the application for leave to appeal and allow the appeal with costs (not including the costs of the applicant’s application for leave to adduce evidence in the appeal), set aside the orders made in the District Court on 14 May 2014, and instead order that the respondent’s application for summary judgment be dismissed. The parties’ costs of the summary judgment application should be reserved. The applicant’s application for leave to adduce evidence should be refused on the ground that it is not necessary to consider it.  The applicant should bear its own costs of that application.
  1. Because the appeal was made necessary by an error of law (particularly the primary judge’s failure to give reasons) for which the respondent bore no responsibility, I would order that the respondent be granted an indemnity certificate in respect of the appeal under s 15 of the Appeal Costs Fund Act 1973 (Qld).
  1. The respondent filed a further application in the District Court seeking to strike out paragraphs of the applicant’s defence. That application was not pursued because it became unnecessary when the primary judge made the ex tempore order for summary judgment.  That application might now be superseded by amendments to the defence made in response to any amendments which the respondent may now make to his statement of claim.  In any event, that application is not before the Court.  I would not make any order in relation to that application.
  1. MULLINS J:  I agree with Fraser JA.
  1. HENRY J:  I have read the reasons of Fraser JA.  I agree with those reasons and the orders proposed.

Footnotes

[1] (2014) 88 ALJR 814.

[2] Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 352.  Because the relevant contractual provisions are ambiguous, it is not necessary to consider recent decisions in intermediate appellate courts to the effect that ambiguity is not required before extrinsic evidence is admissible as an aid to construction: see Maintek Services Pty Ltd v Stein Heurtey SA & Anor (2014) 310 ALR 113, Newey v Westpac Banking Corporation [2014] NSWCA 319 and Stratton Finance Pty Ltd v Webb [2014] FCAFC 110, but compare Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164.

[3] [2009] 2 Qd R 219 at 237 – 238 [57] – [64].

[4] [2012] QCA 254 at [89].

[5] See Uniform Civil Procedure Rules 1999 (Qld), r 292.

[6] Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 469 (Dixon J), Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 – 429 (Brennan CJ, Dawson and Toohey JJ), and Visscher v Giudice (2009) 239 CLR 361 at 379 – 381 [53] – [55] (Heydon, Crennan, Kiefel and Bell JJ).

[7] Agar v Hyde (2000) 201 CLR 552 at 576 [57].

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Editorial Notes

  • Published Case Name:

    Jakeman Constructions Pty Ltd v Boshoff

  • Shortened Case Name:

    Jakeman Constructions Pty Ltd v Boshoff

  • MNC:

    [2014] QCA 354

  • Court:

    QCA

  • Judge(s):

    Fraser JA, Mullins J, Henry J

  • Date:

    19 Dec 2014

Litigation History

Event Citation or File Date Notes
Primary Judgment - - QDC
Appeal Determined (QCA) [2014] QCA 354 19 Dec 2014 -

Appeal Status

{solid} Appeal Determined (QCA)