EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: It is relevant to note the terms of the contract entered into between the applicant and her husband, Mr Rumble, on the one hand and the respondent on the other.  The contract was in writing and dated 8 September 1995.  It contained two provisions that I regard as material. 

First, under the heading, “Duties”, reference was made to “hands on management” of the hotel and motel, with a statement:  “In general as if it were your own”.  The significance of this statement is that the parties envisaged the managers would have a high degree of autonomy in running the hotel and motel.  That is not to say, of course, that they were entitled to act inconsistently with the employer's interests; they were certainly accountable in terms of conducting the business in an efficient manner, responsibility for funds, etcetera.  However, I think the statement gave them a wide discretion as to the details of management including the roles they each played and even temporary absences from work.

The second material provision is the reference to termination or notice of intent to leave.  The contract provides for six months’ notice of termination by either party or, in the case of the employer, six months salary in lieu of notice.  An attempt was made in argument to read this down by reference to a discussion about selling the business, the suggestion being that the six months notice only applied if the business was sold.

I am not prepared to accept that approach for two reasons.  First, it is contrary to the evidence of the applicant, Ms Pritchard, whose evidence I found impressive.  I think she was a truthful witness, although there is one aspect of her evidence about which I am unsure.  There may have been a misunderstanding about that.  I certainly accept her evidence that there was an early discussion between herself, her husband and Mr Hastings during which she talked about the desire of herself and her husband for stability in their employment.  They were moving to the Hunter Valley from Sydney and it is understandable they would require a significant period of notice if their employment was to be terminated for any reason.

Secondly, a limitation referable only to the sale of the business is difficult to reconcile with the six months termination provision being mutual, that is to say six months notice had to be given by the managers if they wished to leave.  Having accepted that constraint, it is difficult to see they would have been prepared to accept a limited covenant on the employer's part.  I think the contract should be taken as it reads, as it was prepared by the employer and accepted by the employees.

Following that agreement, in November 1995, Ms Pritchard and Mr Rumble commenced duties; jointly managing the hotel and motel.  Mr Rumble was the licensee of the hotel.  It seems they managed the businesses well.  There has been no suggestion of any deficiency in the performance of their duties.

Unhappily there were marital problems which reached something of a crisis on the evening of Sunday, 19 May 1996.  On that evening they went out with friends and consumed liquor.  I gather Mr Rumble consumed more liquor than Ms Pritchard but both were affected by liquor to some extent when they returned home.  There was a quarrel resulting in some physical violence.  No great damage was done to anybody but the incident was upsetting to both parties, particularly to Ms Pritchard.  She called the police.  After a telephone discussion with them, she indicated she did not wish the police to come round to the motel, but they came anyway.  After discussion, the police suggested Mr Rumble spend the night elsewhere and drove him into Cessnock.  He was not charged by the police.

It seems Ms Pritchard was upset.  Although it was late, she rang a friend and, judging by the telephone record, also telephoned her mother.  This is consistent with her being upset, distressed and needing consolation. 

On the following morning, Ms Pritchard found Mr Rumble had returned to the motel.  They had a discussion in which Ms Pritchard indicated she would carry out most, if not all, her normal duties on the Monday, but she felt they needed some time apart.  I can understand why she felt that way.  Ms Pritchard and Mr Rumble discussed the matter and agreed it would be better for Ms Pritchard to leave rather than Mr Rumble.

There is an evidentiary difference between Ms Pritchard and Mr Rumble as to whether she indicated to him that day she would be back on duty on the following Monday, 27 May.  Ms Pritchard is clear in her recollection that she did say this.  Mr Rumble says she did not.

This is the aspect of Ms Pritchard's evidence I had in mind earlier, when I said there was one uncertainty.  I have some difficulty in resolving it.  One reason for doubting that Mr Rumble understood Ms Pritchard was to return the following Monday is the terms of his telephone conversation with Mr Hastings later that day.  It is possible Ms Pritchard did say something about being back the following Monday but Mr Rumble did not take it in.  It seems both parties were somewhat emotional at this time.  Mr Rumble might also have been suffering some after effects of the previous night's drinking.  His mind might not have been as acute as usual.

In any event, Ms Pritchard left on the Monday and went to her mother's house in Sydney.  There were telephone communications between the parties during the week.  I do not think the details matter; it is common ground there were quite a number of conversations.

Late in the afternoon of Friday, 24 May there was a telephone conversation between Ms Pritchard and Mr Hastings.  It is clear from the telephone record that it was Ms Pritchard who initiated this contact, a matter not without some significance.  If she had abandoned her employment, it is difficult to see why she would have telephoned Mr Hastings. She rang him.  He was not available, so she left a message for him to ring back.  He did so later that afternoon. 

There is a dispute between Ms Pritchard and Mr Hastings as to what was then said.  According to Ms Pritchard’s evidence, she told Mr Hastings she was ringing him as a matter of courtesy to tell him she was feeling a lot better, she had spoken to her husband during the week and would be back at work on Monday.  According to the evidence given by Ms Pritchard, Mr Hastings responded by asking:

            “How is Roger with this?” 

She replied:      “Roger is fine.” 

He said:

            “I don't want any dramas up at Tullawoonta.  Tullawoonta is a hard enough place to run without trying to restore a marriage there.”

Ms Pritchard replied:    “Roger is fine.”

And Mr Hastings then said:       “As long as Roger is okay, I'm happy.”

That conversation puts Mr Hastings in a human light but his evidence is quite to the contrary.  He says Ms Pritchard told him she wished to go back to Tullawoonta and he replied:

            “Well, I don't think you can.”

She asked:        “Why not?”

He said:

            “You've left your job.  We've employed new people up there and I don't think it's a place to get your marriage back together.”

She replied:      “Thanks very much.  You've ruined my marriage.”

and hung up. 

A response of this nature from Mr Hastings really would be quite extraordinary.  It would be extremely insensitive.  Ms Pritchard was a young woman, one of two joint managers of a business operated by Mr Hastings.  She had worked for his company for some seven months.  Mr Hastings knew Ms Pritchard had had marital problems, as a result of which she had left her husband earlier in the week.  It is difficult to believe a person in Mr Hastings’ position would have failed to ask Ms Pritchard how she was and checked she was not in any trouble and whether there was anything he could do to assist.  It is even more unbelievable that he would have told her she could not go back, without having a proper conversation with her; especially when he had not in fact employed “new people” at the business but merely taken on a casual employee.

I cannot believe Mr Hastings said what he claims.  Given a credibility contest between Ms Pritchard and Mr Hastings, I prefer Ms Pritchard's evidence. 

I also think it is significant that Ms Pritchard went back to Tallawoonta on the Sunday night.  I do not think she would have returned if she had been told on the Friday evening by Mr Hastings that she could not do so.  She is a young woman, he much older and a forceful character.  I cannot imagine Ms Pritchard defying Mr Hastings by acting in contravention of an express prohibition made two days earlier.

There is no real dispute as to what happened when Ms Pritchard went back.  She arrived late on the Sunday evening, 26 May.  She worked through 27 May, the Monday.  During that day she had several conversations with people in the respondent’s Mascot office.  At some stage Mr Hastings became aware she was back at the motel.  He then spoke to Mr Rumble and insisted she leave.  I do not think it is necessary to form an opinion as to when exactly this occurred or the precise content of the conversation between Mr Hastings and Mr Rumble.  It is clear, from the evidence of both men, that he insisted on Ms Pritchard’s immediate departure.  Mr Rumble reported this to Ms Pritchard.  Ms Pritchard said in evidence she was minded to ring Mr Hastings back and discuss the matter with him, but her husband suggested it would be better to allow him to cool down and to discuss it later.  She was concerned about Mr Rumble's position; out of loyalty to him, she accepted this advice.

As it is clear that it was the respondent who insisted on Ms Pritchard leaving the motel on Monday 27 May, the only possible answer to the claim there was a termination of employment by the employer is that, before that date, Ms Pritchard abandoned her employment; in other words, there was conduct evidencing an intention by Ms Pritchard not to continue the employment relationship.  As to that matter, counsel for the respondent, Mr Rogers, first said he could not argue there was any behaviour by Ms Pritchard which evidenced such an intention.  He subsequently withdrew that concession and said abandonment was to be inferred, by way of admission, from the content of Mr  Hastings’ version of the conversation of 24 May between Ms Pritchard and Mr Hastings.  As I do not accept Mr Hastings’ version, the point does not arise.  Even if I did accept his version, I could not get out of it the admission Mr Rogers seeks. 

The second way Mr Rogers put his case was to say the intimation of Mr Rumble to Mr Hastings of 20 May, that Ms Pritchard had left and Mr Rumble did not know whether she would return, was an intimation by her through her agent, her husband, of an intention to abandon her employment. 

It seems to me this approach fails for two reasons.  First, I do not think what Mr Rumble said to Mr Hastings, on the version of either man, constitutes a statement that Ms Pritchard had abandoned her employment or would not be back.  At the most it indicates uncertainty, perhaps considerable uncertainty, by Mr Rumble as to what would happen.  This is a far cry from an intimation of abandonment.  It must have been obvious to Mr Hastings that time was needed to clarify the position. 

Secondly, it is not possible to treat Mr Rumble as Ms Pritchard's agent for the relevant purpose.  Normally, no doubt, it is reasonable to treat a spouse as speaking on behalf of the other, but Mr Hastings was aware there had been marital discord as a result of which Ms Pritchard had just left Mr Rumble, at least for the time being.  Under such circumstances, any experienced person would realise that the speaker spouse may not be accurately reflecting the wishes of the other spouse.

It seems to me the defence of abandonment fails.  Nothing has been put by way of justification of termination, on the assumption there was a termination by the employer.  Once it is held the defence of abandonment fails, there is a clear breach of s 170DE(1) of the Industrial Relations Act. 

As to the cross-claim, the complete answer to it is there would have been no liability requiring indemnification but for Mr Hastings’ insistence, on 27 May, on Ms Pritchard’s ejection from the motel.  Whatever had happened the previous week, by 27 May she was back on the job and wanting to carry on.  Mr Rumble also wanted her to carry on.  For reasons not apparent to me, but I suspect relate to ego and nothing else, Mr Hastings was not prepared to accept this situation.  The consequential loss was caused by himself and nobody else. 

As to the quantum of the loss, I find myself of much the same opinion as the Judicial Registrar.  There was a clear breach of the contract to give Ms Pritchard six months’ notice; the breach of contract claim must succeed.  Six months salary, as the Judicial Registrar correctly calculated, amounted to $15,542.  It is reasonable to add pre-judgment interest to this sum.  In order to simplify the process, but also avoid any duplication, the appropriate course is to take interest at 10 per cent for 18 months, that is to say to add 15 per cent to the sum of $15,542; 15 per cent of that sum is $2,331; making a total of $17,873.  I would substitute that sum for $15,542 where it appears in order (2) of the Judicial Registrar's orders.

In relation to order (3), a question arises as to whether there should be compensation under s 170EE of the Workplace Relations Act 1996  in addition to damages for breach of contract.  I have given this matter  thought during the course of the day and have reached the conclusion there is no reason why there should not be compensation under s 170EE.  But for the unlawful termination, it is likely the applicant would have continued in the job for a long time.  I bear in mind there were marital problems, that creates some uncertainty.  However, with a little common sense all around, they would probably have been weathered.

Ms Pritchard obtained other employment in February 1997.  Although there was a suggestion of continuing loss thereafter, I think to allow this would be going too far.  The appropriate course is to allow for the eleven weeks between the expiration of the six months period, that is to say from 20 November 1996 to the date of commencement of the new employment in early February.  I will round out the amount of the loss at $7,000.  I will add interest of 12 per cent, reflecting the fact that this money would have been received over a period rather than all at once.  That addition makes a total sum of $7,840.  I will substitute that sum for the sum of $7,750 allowed in order (3).

Subject to those amendments, I confirm the orders made by the Judicial Registrar.  In order to ensure there will be no duplication, I point out that interest on the sums as assessed by me runs from today, not from the date of the Judicial Registrar's orders.  The requirement of payment within 21 days will be retained, but the 21 day period will commence today.

[Counsel addressed on costs.]

I will reserve the applications for costs by the applicant and by the cross-respondent.

I will announce my decision on the matter of costs one day in Court and send copies of the order to the parties.  I do not want more costs to be incurred by the parties coming back to Court.

Associate:

Dated:              23 October 1997