FEDERAL COURT OF AUSTRALIA

Robertson v Knott Investments Pty Ltd (No 3) [2010] FCA 1074

THE COURT ORDERS THAT:

1.                  The appeal is dismissed.

2.                  The Appellant is to pay the costs of the Respondent, including reserved costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                                             Presently before the Court is an appeal from a decision of a Federal Magistrate in Robertson v Knott Investments Pty Ltd [2010] FMCA 142.

2                                             The present Appellant, Mr Karl Robertson, is an Australian citizen who has spent some considerable time living and working outside Australia. He was born in September 1942. At the end of his career, Mr Robertson not surprisingly was seeking employment in Australia.

3                                             The Respondent is a company that designs and manufactures Winnebago Motor Homes. It is a family company. Its Chief Executive Officer is Mr Ben Binns.

4                                             In March 2007 the Respondent decided that it should employ a design manager and retained Mr Michael Higgins to recruit a suitable employee. Mr Robertson responded to an advertisement that had been published and conversations thereafter took place as to the position being offered and the terms and conditions of any employment. Correspondence was also exchanged. Mr Robertson initially declined to accept the position but he and Mr Higgins agreed to keep in touch. Mr Robertson accepted employment with Ashok Leyland Limited in Chennai in India to commence in May 2007. Another person was then appointed to the position advertised by the Respondent but that person resigned a month later. There were then further conversations and correspondence between Mr Higgins and Mr Robertson. Ultimately, Mr Robertson did accept an offer of employment with the Respondent. He commenced employment in January 2008 but was advised in April 2009 that his position was terminated for reasons of redundancy.

5                                             On 18 August 2009 he filed an Application in the Federal Magistrates Court of Australia.

6                                             In issue in the proceeding before the Federal Magistrate was the content of the conversations preceding Mr Robertson’s employment with the Respondent and his reliance upon what had been said.

7                                             In his Application Mr Robertson advanced a claim that representations had been made to him as to the length of time he would be employed by the Respondent. The claim was advanced as a contravention of s 53B of the Trade Practices Act 1974 (Cth) and an order was sought “pursuant to section 82 and/or section 87 of the Act that the Respondent pay damages in the amount of $268,269 …”. On the hearing of the appeal, Counsel on behalf of Mr Robertson submitted that the claim for that amount was not pressed and that the amount in issue before the Federal Magistrate was a claim for $92,936. There was, however, no agreement that the amount of damages in the event of a contravention being established was that lesser sum.

8                                             The Federal Magistrate accepted that statements had been made on behalf of the Respondent as to the length of time for which Mr Robertson was to be employed. In his reasons for decision, the Federal Magistrate concluded on this issue as follows:

[22] I am satisfied that Mr Robertson did indicate during conversations with Mr Binns that he saw himself remaining in the position for a period of three years or more and that Mr Binns did not raise any objection thereto. I am also satisfied that during the many discussions between Mr Robertson and Mr Binns that Mr Binns did indicate the position was a permanent one, although that is not the same as saying that Mr Robertson could have it permanently; …. I believe Mr Robertson would, prior to the negotiations for the contract, have understood he was going to be employed for a period of at least three years if he accepted the position. I have assumed for the purposes of these reasons that his belief arose out of representations made by Mr Binns or on his behalf by Mr Higgins. I am satisfied that these statements were made in connection with an offer of employment and thus come within s.53B of the Act. …

But the Federal Magistrate proceeded to reject any entitlement to relief because he found as a matter of fact that:

·                    Mr Robertson had not relied upon any representation that had been made; and/or

·                    there were reasonable grounds for the making of the representation.   

On 8 March 2010 the Application was dismissed. It was thus unnecessary for the Federal Magistrate to resolve any question as to the quantum of damages that may otherwise have been awarded.

9                                             Mr Robertson then filed a Notice of Appeal in this Court on 29 March 2010. Subsequent to the filing of the Notice of Appeal, Mr Robertson unsuccessfully sought a stay of the order for costs as made by the Federal Magistrate: Robertson v Knott Investments Pty Ltd [2010] FCA 619. A belated application for security for costs was also made by the Respondent. Security was ordered, but not for the full amount sought: Robertson v Knott Investments Pty Ltd (No 2) [2010] FCA 796.

10                                          The matter now to be resolved is the appeal itself. The Notice of Appeal sets forth as follows the Grounds of Appeal relied upon:

1.      The Court erred in finding that the Appellant was a citizen of the United States by birth.

2.      The Court erred in finding that the Appellant did not rely upon the representations as to the duration of his employment with the Respondent when ceasing employment in India and accepting employment with the Respondent.

3.      The Court erred when finding on the evidence that the Appellant did not receive an assurance as to the length of his employment with the Respondent.

4.      The Court erred in having found the Respondent made representations as to the length of the Appellant’s employment that the Appellant did not receive an assurance as to the term of the contract.

5.      The Court erred in finding that on the evidence the Respondent had reasonable grounds for making the representations to the Appellant pursuant to s51A of the Trade Practices Act.

6.      The Court erred in finding that the course of negotiations between the Appellant and Respondent negated any reliance by the Appellant on previous negotiations.

7.    The Court erred by finding that the Appellant could not rely upon representations which did not find their way into the contract between the Appellant and the Respondent.

11                                          The appeal is to be dismissed.

The Trade Practices Act 

12                                          There was no dispute as to the correct construction and application of the provisions of the Trade Practices Act 1974 (Cth) relevant to the present proceeding. The occasion thus does not arise to do anything other than to note in outline the relevant statutory provisions.

13                                          The provision set forth in the Application in the Federal Magistrates Court as having been contravened is s 53B. That section provides as follows:

Misleading conduct in relation to employment

A corporation shall not, in relation to employment that is to be, or may be, offered by the corporation or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment.

As the section itself makes clear, it only relates to conduct which occurs before a contract of employment arises: Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 at 691 to 692 per McHugh JA. By way of example, in Dawson v Australian Consolidated Reserves Pty Ltd (1983) ATPR 40-374 the company had pleaded guilty to a contravention of s 53B. The company had published in a newspaper an advertisement which included a statement that “A Girl Friday” was sought with an initial salary of $260 per week. The plea of guilty accepted that there was no vacancy for which any successful applicant would receive an initial wage of $260 per week. The advertisement also failed to disclose that what the company was seeking was someone to operate as its agent, to be remunerated by commissions earned on sales made of certain goods the company was handling. A contravention was made out and fines were imposed.

14                                          Subsequently, in Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099, 140 IR 433 Kenny J set out the text of s 53B and continued:

[186] ….. In order to make out his case under s 53B, Mr Walker needed to establish (1) that each representation was made; (2) that, viewed objectively, the representation was liable to mislead him as to the availability, nature, terms or conditions, or another matter relating to the employment proposed by NatWest; and (3) that he relied on the representation. As in connection with s 52 of the TPA, in order to be compensated for any loss and damage under s 82(1) of the TPA, Mr Walker needed to establish a causal connection between the respondents’ conduct and the loss for which he sought compensation.

[187] Section 53B prohibits a corporation from engaging in misleading and deceptive conduct in relation to an offer of employment before a contract of employment has been entered into. The misrepresentation must induce the applicant to take up employment with the respondent: see Callinan v Gilro-ERG Pty Ltd. The provision is limited to conduct that took place prior to the commencement of the employment: see Wright v TNT Management Australia Pty Ltd (t/a Comet Overnight Transport) (1989) 15 NSWLR 679, at 691–692, per McHugh JA and 696 per Clarke JA; Dawson v Australian Consolidated Reserves Pty Ltd [1983] ATPR 44,441 (40–374) per Toohey J; and Thomas v Star Maid International Pty Ltd [1999] FCA 911 at [16] per Weinberg J. [emphasis in original]

15                                          The representation relied upon by Mr Robertson in the present proceeding was a representation made as to the length of time for which he would be employed. It was common ground that this was a representation as to a “future matter” and that s 51A was thereby invoked. That section provides as follows:

Interpretation

(1)    For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2)    For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

(3)    Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

16                                          The section has been recognised as “a qualified and complex deeming provision”: Ackers v Austcorp International Ltd [2009] FCA 432 at [354] per Rares J. It is, however, properly characterised as an interpretation provision and “does not of itself create a cause of action, nor define a norm of conduct”: Ting v Blanche (1993) 118 ALR 543 at 552. Notwithstanding some divergence of views as to the manner of operation of s 51A(2) (see: Readymix Holdings International Pte Ltd v Wieland Process Equipment Pty Ltd (No 2) [2008] FCA 1480 at [91] to [99]), it is considered that s 51A is to be interpreted and applied in the manner explained by Emmett and Allsop JJ in McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, 165 FCR 230. Emmett J there observed:

[44] Under s 51A(1) of the Trade Practices Act, a representation is to be taken to be misleading if it is a representation with respect to any future matter and the maker of the representation does not have reasonable grounds for making the representation. Under s 51A(2), the maker of the representation with respect to any future matter is to be deemed not to have had reasonable grounds for making the representation unless it adduces evidence to the contrary. However, if evidence is adduced by a representor to the effect that the representor had reasonable grounds for making the representation, the deeming provision will not operate. Where the representor adduces such evidence, it is then a matter for the Court to determine, on the balance of probabilities in the ordinary way, whether or not the representor had reasonable grounds for making the representation.

Allsop J (as His Honour then was) said:

[192] … Section 51A(2) does not, in my view, mean that in those circumstances the representor has not met an onus. The section does not cast the legal or persuasive onus, in such a case, on the representor. Its terms do not say so. The enactment history makes clear that the terms were deliberately chosen not to say so. Keane JA, despite his reference to the “trend of established [first instance] authority”, does not say so. In my respectful view, to the extent that decisions such as IMB Group (1999) ATPR 41-704; Blacker [2000] FCA 681; Kaye [2004] FCA 1363; Lewarne [2007] FCA 1136 and Emerald Ocean [2006] ATPR 42-096 say, or may be taken as saying, that the legal or persuasive onus of proof is shifted to the representor by s 51A(2), they are wrong. None examined the enactment history of s 51A. If it be thought, contrary to my reading of Keane JA’s reasons, that his Honour’s reference to Kaye [2004] FCA 1363 as “established authority” was a conclusion that s 51A(2) effected a reversal of the legal and persuasive onus of proof, I would be driven to the respectful view that his Honour was plainly wrong for the reasons that I have given.

Emmett J also agreed with Allsop J as to the operation of s 51A: [2008] FCAFC 2 at [6], 165 FCR 230 at 234.

17                                          Difficulties may emerge as to the application of s 51A in those cases where a person making a representation simply denies making the statements sought to be attributed to him. Although addressing the comparable terms of s 41 of the Fair Trading Act 1987 (NSW), in Cummings v Lewis (1993) 41 FCR 559 at 565 to 566 Sheppard and Neaves JJ observed:

That problem is compounded when one takes into account subs (2) of s 41 which casts the onus of establishing that a person had reasonable grounds for making a representation with respect to a future matter on to the person making it. No evidence was given by Mr Leckie or Mr Lewis in relation to the matter at hand. Neither dealt with the question whether he had reasonable grounds for saying what his Honour has found each said. There is of course good reason for this. They denied that any such representations were made.

That raises a practical difficulty about the application of subs (2) of s 41 to some cases. There are many cases, whether under s 52 of the Trade Practices Act or s 42 of the Fair Trading Act, where the principal protagonists are not dishonest or fraudulent. Each gives evidence to the best of his or her ability of conversations which took place before a transaction was entered into or other steps were taken. One party alleges inducement by misleading or deceptive conduct. The other party denies it because he or she says that nothing of that kind was said. That evidence is given honestly and to the best of the witness’s recollection. Yet so often a judge will find that party’s evidence unreliable, but it will be rejected, not because it is dishonest but because it is mistaken. The question arises how, from a practical point of view, can a witness in that situation face up to what is to him or her a false position. Evidence needs to be given to show reasonable grounds for the making of a statement that the witness claims never to have made. That was the position both Mr Leckie and Mr Lewis would have been placed in if an attempt had been made to elicit evidence of reasonable grounds from them.

Evidence of reasonable grounds may be established by evidence other than that of the persons who are alleged to have made particular representations as to a future matter. Indeed, as in so many other areas, a court may find the overall probabilities to which the circumstances of a given case give rise, the background to it and the conduct of parties prior to conversations taking place as providing better guides to whether or not they had particular states of mind or whether particular factors existed which would establish evidence of something such as reasonable grounds. It was the overall circumstances of the case which enabled his Honour to say, in relation to both Mr Leckie and Mr Lewis, that each genuinely believed the encouraging assertions which his Honour found them to have made. If one changes the exercise to an inquiry, not into genuine or honest belief, but into whether there were reasonable grounds, it is again the overall circumstances of the case which will provide more reliable guidance than would oral evidence on the part of interested parties.

In reliance upon this provision, in King v GIO Australia Holdings Ltd [2001] FCA 308 at [31], 184 ALR 98 at 111, Moore J observed that “it can sometimes be somewhat artificial to focus on who may adduce the evidence”.

18                                          An equally brief reference should also be made to s 82 of the Trade Practices Act. Section 82(1) relevantly provides in part as follows:

… a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part … V … may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

In order to obtain relief under s 82, a person must have suffered loss or damage “by” conduct in contravention of (relevantly) Pt V: Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514. Mason CJ, Dawson, Gaudron and McHugh JJ there observed at 525:

…The statutory cause of action arises when the plaintiff suffers loss or damage “by” contravening conduct of another person. “By” is a curious word to use. One might have expected “by means of”, “by reason of”, “in consequence of” or “as a result of”. But the word clearly expresses the notion of causation without defining or elucidating it. In this situation, s. 82(1) should be understood as taking up the common law practical or common-sense concept of causation recently discussed by this court in March v. Stramare (E. & M. H.) Pty. Ltd. [(1991) 171 CLR 506], except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act. Had Parliament intended to say something else, it would have been natural and easy to have said so.

Thereafter, in Henville v Walker [2001] HCA 52, 206 CLR 459, McHugh J (Gummow J agreeing) referred to these observations and continued:

[96] But this does not mean that common law conceptions of causation should be rigidly applied without regard to the terms or objects of the Act. Section 82 now applies to the contravention of any provision of Pt IV, IVB or V, or s 51AC of the Act. In Marks v GIO Australia Holdings Ltd, Hayne and Callinan JJ and I pointed out that the section can apply to many different kinds of cases, not just those where a breach of s 52 is alleged. Moreover, the objects of the Act indicate that a court should strive to apply s 82 in a way that promotes competition and fair trading and protects consumers. The width of the potential application of s 82 and the objects of the Act tell against a narrow, inflexible construction of the section. No doubt in most cases, applying common law conceptions of causation will be sufficient to answer the issues posed by s 82 in its application to contraventions of the Act. But care must be taken to avoid a mechanical application of those conceptions to issues arising under the section. … [footnotes omitted]

His Honour thereafter continued to state:

[136] Given the long history of the common law’s recognition of the concept of remoteness in assessing damages in contract and tort and its relationship with the issue of causation, it seems proper to read the term “by” in s 82 as including the concept of remoteness. By remoteness, I mean that the loss or damage was not reasonably foreseeable even in a general way by the contravener. …

[140] Nothing in the common law, in s 52 or s 82 or in the policy of the Act supports the conclusion that a claimant’s damages under s 82 should be reduced because the loss or damage could have been avoided by the exercise of reasonable care on the claimant’s part. There is no ground for reading into s 82 doctrines of contributory negligence and apportionment of damages. No doubt, if part of the loss or damage would not have occurred but for the unreasonable conduct of the claimant, it will be appropriate in assessing damages under s 82 to apply notions of reasonableness in assessing how much of the loss was caused by the contravention of the Act. But that proposition is concerned with the items that go to the computation of the loss. … [footnotes omitted]

19                                          The misrepresentation thus need not be the sole cause of an applicant’s loss or damage. See also: I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 at [25] to [26], 210 CLR 109 at 119 per Gleeson CJ.

An Appeal by way of Re-Hearing — The Need for Appellable Error

20                                          Brief reference should also be made to the appellate jurisdiction of the Court now being exercised.

21                                          The jurisdiction being exercised in this appeal is that conferred by s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth), namely the jurisdiction to hear and determine an appeal from a judgment of the Federal Magistrates Court.

22                                          The appellate jurisdiction conferred is an appeal by way of a re-hearing: Farrington v Deputy Commissioner of Taxation [2002] FCA 1013, 50 ATR 429 at [4] per Kenny J. See also: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833, 117 FCR 424.

23                                          The jurisdiction nevertheless remains an appellate jurisdiction which is to be exercised for the correction of error: Dovuro Pty Ltd v Wilkins [2000] FCA 1902 at [38], 105 FCR 476 at 487 per Branson J. An appellable error must be made out: Knight v Beyond Properties Pty Ltd [2007] FCAFC 170 at [20], 242 ALR 586 at 591. As to the distinction between an appeal by way of re-hearing and an appeal by way of a hearing de novo, French CJ, Tamberlin and Rares JJ there cited the following observations of Gleeson CJ, Gaudron and Hayne JJ in Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47, 203 CLR 194:

[12] It is common and often convenient to describe an appeal to a court or tribunal whose function is simply to determine whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given as an appeal in the strict sense. An appeal to this Court under s 73 of the Constitution is an appeal of that kind. In the case of an appeal in the strict sense, an appellate court or tribunal cannot receive further evidence and its powers are limited to setting aside the decision under appeal and, if it be appropriate, to substituting the decision that should have been made at first instance.

[13] If an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually and conveniently described as an appeal by way of rehearing. Although further evidence may be admitted on an appeal of that kind, the appeal is usually conducted by reference to the evidence given at first instance and is to be contrasted with an appeal by way of hearing de novo. In the case of a hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing.

[14] Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance.[footnotes omitted]

When conducting an appeal by way of re-hearing, it is thus the task of the Court to determine whether the findings made are correct; but it is not the function of the appellate court “merely to substitute its own view, as if it were again performing the function of the trial judge”: Wade v Australian Railway Historical Society [2000] SASC 233 at [38], 77 SASR 221 at 227 per Doyle CJ. Nor is it appropriate to invite an appellate court “simply to revisit the relevant evidence … and then contend that the court should reach a different conclusion… [E]rror must be demonstrated for the appellate court to be entitled to disturb the decision of the primary decision-maker… Furthermore, the manner in which the case is conducted by the parties on appeal ought not depart from the manner in which the case was conducted at trial, and generally, the appeal arena is not the appropriate forum to raise new arguments”: Tasmanian Sandstone Quarries Pty Ltd v Legalcom Pty Ltd [2010] SASCFC 6 at [34] per Gray J (Nyland and Kourakis JJ agreeing).

The Grounds of Appeal – An Invitation To Revisit the Facts

24                                          Grounds 1, 2, 3, and 4 of the Notice of Appeal in large part contend that the Federal Magistrate erred in reaching the finding of fact as to the absence of reliance on the part of Mr Robertson upon the representations made by the Respondent or its representatives.

25                                          In resolving an appeal which seeks to challenge the factual conclusion made by the Judge whose decision is under appeal, it was common ground that the approach to be taken was that set forth as follows by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [2003] HCA 22, 214 CLR 118:

[24] Nevertheless, mistakes, including serious mistakes, can occur at trial in the comprehension, recollection and evaluation of evidence. In part, it was to prevent and cure the miscarriages of justice that can arise from such mistakes that, in the nineteenth century, the general facility of appeal was introduced in England, and later in its colonies. …

[25] Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge’s reasons. Appellate courts are not excused from the task of ‘weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect”. In Warren v Coombes, the majority of this Court reiterated the rule that:

“[I]n general 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 conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.”

As this Court there said, that approach was “not only sound in law, but beneficial in ... operation”.

[26] After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.

[27] The continuing application of the corrective expressed in the trilogy of cases was not questioned in this appeal. The cases mentioned remain the instruction of this Court to appellate decision-making throughout Australia. However, that instruction did not, and could not, derogate from the obligation of courts of appeal, in accordance with legislation such as the Supreme Court Act applicable in this case, to perform the appellate function as established by Parliament. Such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute.

[28] Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.

[29] That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.

[30] It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v Merchants’ Marine Insurance Co (The “Palitana”):

“... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.”

                [footnotes omitted]

These comments are largely directed to findings of fact based upon the credibility of witnesses; but the caution there expressed is not confined to such findings.

26                                          The advantages which the primary decision-maker has in the evaluation of evidence nevertheless remain real advantages. Those advantages include “the advantages that a primary judge may enjoy in the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole”: CSR Ltd v Della Maddalena [2006] HCA 1 at [17], 224 ALR 1 at 7 per Kirby J. See also: Yousif v Commonwealth Bank of Australia [2010] FCAFC 8 at [33], 193 IR 212 per Kenny, Tracey and Jagot JJ; Tran v Commonwealth [2010] FCAFC 80 at [37], 116 ALD 29at 36 per Rares J; Sterndale v Laurie [2010] WASCA 79 at [67] to [71] per Buss JA (Pullin and Newnes JJA agreeing). These are real advantages enjoyed by a trial judge and are separate from such advantages as a trial judge may have in assessing the credit of individual witnesses.

27                                          Although these may be advantages enjoyed by the judge whose decision is on appeal, the advantages enjoyed by an appellate court should not be ignored: Fox v Percy, supra. Callinan J there relevantly observed:

[142] Statements made by appellate judges about findings of fact by trial judges repeatedly emphasise the advantages attaching to an opportunity to hear and see witnesses. They tend to understate or even overlook that appellate courts enjoy advantages as well: for example, the collective knowledge and experience of no fewer than three judges armed with an organized and complete record of the proceedings, and the opportunity to take an independent overview of the proceedings below, in a different atmosphere from, and a less urgent setting than the trial. [footnotes omitted]

The Findings as to Reliance   

28                                          The adverse finding of the Federal Magistrate as to the absence of reliance by Mr Robertson upon the representations or assurances made by or on behalf of the Respondent was the first of two reasons for dismissing his Application.

29                                          In expressing his conclusions on the first aspect of the case, the Federal Magistrate referred to the conversations as to the term of any proposed employment between Mr Robertson and representatives of the Respondent and continued:

[22] … I am satisfied that these statements were made in connection with an offer of employment and thus come within s.53B of the Act. But there are two points upon which I am not satisfied which are fatal to the applicant’s case. The first point is that I am not satisfied that Mr Robertson relied upon those representations to leave his job in Chennai and accept employment with the respondent. …

30                                          The reasons for reaching this conclusion were essentially two-fold, namely:

·                    the finding made as to Mr Robertson being “not happy” with his prior position in India and his “strong motive for accepting the Winnebago position …”;

and also what the Federal Magistrate described as “the stronger ground for coming to my conclusion about reliance”, namely:

·                    the findings made as to “what occurred in relation to the negotiation of the contract”. 

31                                          Grounds 2, 3, and 4 of the Notice of Appeal are each directed to the challenge made to these findings and conclusion of the Federal Magistrate. Ground 2, however, remains the principal Ground relied upon.

32                                          It may be accepted that the Federal Magistrate may well have been in error in stating that Mr Robertson “is a US citizen by birth”. Leave was sought at the outset of the hearing to adduce further evidence, namely an affidavit of Mr Robertson deposing to the fact that he was born in Bangalore in India and annexing a copy of his Australian passport. The affidavit went to Ground 1. The question of whether such leave should be granted was then reserved. But nothing, with respect, really turns upon the statement of the Federal Magistrate. The relevance of the statement (if any) to the Federal Magistrate’s subsequent conclusions, including the conclusion that Mr Robertson was “clearly not happy” with his position in Chennai, remained elusive. This Court can unquestionably admit further evidence on appeal: Federal Court of Australia Act 1976, s 27 (Cth). But the discretion to admit such evidence is exercised adversely to Mr Robertson where the relevance of such evidence is neither apparent nor determinative of the issues to be resolved. Leave to adduce further evidence is refused and Ground 1 is rejected.

33                                          It may equally be accepted that such evidence as was relied upon by the Federal Magistrate to conclude that Mr Robertson was “clearly not happy” with his position in Chennai was less than unequivocal. In support of the conclusion reached was the following note (extracted in part) prepared by Mr Higgins on 2 July 2007 following a telephone call from Mr Robertson:

I received a call from Karl Robertson late last week. He also tells me he contacted you.

It seems as though Karl is not completely happy in his current role in India. He tells me, he and one of his sons are both working with the same company in the Automotive Industry in India.

He wants to revisit opportunities with you at Winnebago. He understands the role of Design Manager has been filled, however he believes he could still add value to Winnebago.

Karl was proposing he would be prepared to take say a Friday and/or Monday off work and travel out to meet with you for further discussions. He was asking if you were prepared to cover his costs coming from India. I understand a return airfare from India is approx $1200 A.

He sounds very genuine and I can hear in his voice his displeasure with his current position. We would now be able to negotiate with Karl from a position of strength. …

Mr Robertson did in fact travel to Australia and met with Messrs Binns and Higgins on 22 and 23 October 2007. Mr Binns also gave evidence in his affidavit that he had a conversation with Mr Robertson in October 2008 during which Mr Robertson said:

I didn’t like being in India. I got into a rut of working long hours and had no life. I was working morning to night.

During the course of the cross-examination of Mr Binns, the following exchange also occurred:

Yes. Now, he didn’t tell you, did he, sir, that his role in India had failed?---He – he eventually told me that he wasn’t happy over in India. But are you referring to when he came onboard or ---

Well, sir, you’ve written:

His role in India had somehow failed.

?---I---

That was never told to you, was it, sir?---The way that it was brought across to me was that he wasn’t happy in India.

Well, you didn’t write that, did you, sir? You wrote:

His role in India had somehow failed.

?---Well, that was – I believe – yes.

Mr Robertson, however, in his affidavit denied that he “disliked being in India”. And at the conclusion of the cross-examination of Mr Robertson, there was the following exchange:

Mr Robertson, you weren’t happy in your employment in India, were you?---No, I wouldn’t say that. It was a challenge.

You told Mr Higgins that you weren’t happy in your employment in India, didn’t you?---I may have mentioned it, part of my assignment. That is about it.

And you renewed discussions with Winnebago because you were unhappy in your employment in India and you wanted to come to Australia?--- As I said, I always wanted to come to Australia.

Yes. Nothing further, your Honour.

Irrespective of whether this exchange constituted a “denial” of the proposition being advanced, as submitted on behalf of Mr Robertson, the exchange and the other evidence supported the conclusion reached by the Federal Magistrate.

34                                          It may be accepted that a conclusion that Mr Robertson may not have been “happy” in India does not of itself preclude a finding that he may nevertheless have relied upon the representations being made to him as to the length of his employment with the Respondent. But it was nevertheless open to the Federal Magistrate to reach his finding as to a lack of reliance taking into account all of the evidence – including Mr Robertson’s dissatisfaction with his being in India. No appellable error is discernible in the finding reached by the Federal Magistrate that Mr Robertson “was clearly not happy” with his circumstances in Chennai and his reliance upon that finding to support a conclusion that Mr Robertson had not relied upon the representations made to him.

35                                          Nor is any appellable error discernible in the second of the two matters relied upon by the Federal Magistrate to support that conclusion, namely what the Federal Magistrate regarded as the “stronger ground” being “what occurred in relation to the negotiation of the contract”.

36                                          Two of the matters taken into account by the Federal Magistrate in forming a view as to what he perceived as the “stronger ground” for reaching his conclusion were:

·                    the fact that Mr Robertson “sought but did not receive a three year contract” and signed a contract “when the terms of the representations were not translated into the contractual document”; and

·                    “the fact that Mr Robertson signed the agreement containing Clause 23 indicates to me that he did not rely on the representations as to length of  employment”.

37                                          As to the former of these two reasons, the evolution of the terms upon which Mr Robertson was ultimately employed emerged during October and November 2007. In October 2007 there were a number of discussions and an exchange of correspondence between Mr Robertson and Mr Higgins and either Mr Binns or his sister Ms Samantha Binns.

38                                          On 26 October 2007 a Letter of Offer was forwarded to Mr Robertson by Ms Binns, albeit over the name of Mr Binns. The letter contained a reference to a “probation period” and to the rights of “termination” by both the Respondent and the “employee”. Thereafter, on 30 October 2007 Mr Higgins sent an e-mail to Mr Binns including the following statement:

Duration of Employment

Karl is not comfortable with a probation period. Karl perceives a probation period as the need for him to demonstrate his abilities in doing what he says he can do. He believes at this stage in his career he does not need to ‘prove’ himself. He tells me he is prepared to ‘pack up’ his life and move to Penrith and is seeking a minimum 3 year contract. He has no problem in this contract being terminated due to a serious breach such as a sexual harassment or something else as serious of this nature.

There was also annexed to that e-mail a draft letter accepted as having been drafted by Mr Robertson. That letter contained the following proposed term of the contract under discussion:

Duration of contract:

The contract will be valid for a minimum period of three (3) years from date of commencement. It could be extended thereafter by mutual consent

The letter also included 11 matters proposed to be included in any contract under the heading of “Scope of Contract and Reporting relationship”.

39                                          Amendments were made and a revised Letter of Offer of Employment was sent to Mr Robertson on 5 November 2007. That letter contained no provision as to the “duration of the contract” but included the following provision as to termination:

Termination

In the event of serious misconduct or persistent breach of the employee obligations under this contract, or wilful neglect, this contract may be terminated without notice. The Employee may terminate this agreement by giving notice in writing, please refer to attached AWA for further information.

This was the same term as previously included in the earlier 26 October 2007 letter. The November letter also included a provision as to a “probation period” of six months, also in the same terms as that previously sent. This letter was thus in much the same terms as the earlier letter forwarded on 26 October 2007 – apart from the inclusion in the November letter of the 11 matters which Mr Robertson wanted included. This letter thus incorporated part of what was being sought by Mr Robertson but not the proposed clause as to the duration of the contract. The form of the employment contract remained the same.

40                                          Intervening between the draft letter sent on 30 October 2007 and the subsequent letter on 5 November 2007 was a conversation between Mr Higgins and Mr Robertson “[i]n or about the first few days of November 2007”. Mr Higgins in his affidavit set forth the text of this conversation as follows:

KR:     They have a six month probationary period. If I sign a contract does that mean that I come all the way to Australia and they can get rid of me in six months?

MH:    No, that is not their intention. That is just common practice in all contracts for employment we have here in Australia. Even I have that in my contract with SouthTech. And Karl, that can give you the opportunity to renegotiate your salary package in six months.

KR:     I don’t know if I can start on 3 December as I have to give Ashok Leyland some notice.

MH:    I will have to talk to Ben about that.

41                                          The inference drawn from this exchange of correspondence and the conversation was expressed by the Federal Magistrate as follows:

[23] … But the stronger ground for coming to my conclusion about reliance is what occurred in relation to the negotiation for the contract. I accept that Mr Robertson wanted a three year term. I also accept that Mr Binns did not want to commit to such a term and wanted Mr Robertson to sign the standard form of contract that all his employees had signed. I think that Mr Binns thought that Mr Robertson would be a permanent employee but did not want to lose the ability to dismiss him upon notice that was contained in the contract. Mr Robertson tried to obtain the assurance that he felt he needed by submitting the draft contract through Mr Higgins. The draft contract was rejected. The length of service was not the only issue with which Mr Robertson was concerned. He was rightly concerned about the probation period contained in the contract. He sought and obtained what I believe were firm representations that the probation period would not apply to him. He sought but did not receive a three year contract. But even the contract he sought contained a one month’s notice period and so was not a contract that carried the right to be employed for the full term. He now seeks to say that he signed the contract relying on the previous representations. How could he have done that when the terms of the representations were not translated into the contractual document and when he had received no further representations? He had received that type of assurance in relation to the probation period from Mr Higgins ... but he neither asked for nor received that assurance in relation to the term. In my view Mr Robertson signed the contract because he had no reason to believe that he could not competently carry out the demands of the position and because he believed that this would add to the success of the Winnebago company who would have no reason not to continue to employ him. This is not the same as signing it on the basis of the representations that he claims he relied upon.

42                                          These inferences and the conclusion reached were clearly open to the Federal Magistrate. Moreover, they are considered to be correct.

43                                          As to the latter of the two reasons relied upon by the Federal Magistrate when reaching his conclusion as to what he perceived as the “stronger ground”, namely the fact that the contract as signed contained clause 23, it may be noted that that clause provided as follows:

“23. Pre Contractual Negotiation

This document and your letter of offer

(a)    supersede and exclude any prior or collateral negotiation, understanding, communication or agreement or term of agreement by or between the parties;

and

(b)     without limiting the generality of (a) above, supersede and exclude any (or any alleged) references on length of service, promotion, career path or increases in remuneration by the Company, its agents, contractors or employees, or any Recruitment Agency on the Company’s behalf.”

44                                          There is no doubt that Mr Robertson was seeking a three year contract. At the time he was 64 years of age and was looking for a contract to see him through to retirement. He was also seeking an opportunity to return to Australia. Notwithstanding the fact that Mr Robertson was seeking a contract for three years, the fact remains that he signed the contract in the terms that he did.

45                                          And, in placing weight upon Clause 23 the Federal Magistrate clearly “acknowledged that the authorities recognised that reliance is a question of fact and that the existence of an exclusion or qualification clause is relevant to a determination of the question of whether an applicant has established reliance”. He referred to the decision of the Full Court in Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131 at [101] to [102], 220 ALR 211 at 232.

46                                          Although it may have been open for the Federal Magistrate to have placed more weight upon the content of the conversations as recounted by Mr Robertson and to have placed less weight upon the form of the contract as executed (including Clause 23), the contrary conclusion was one equally available to him. In reaching the finding that he did, the Federal Magistrate canvassed the evidence that had been adduced and made his findings based upon that evidence. In doing so it is respectfully considered that his decision exposes no appellable error.

47                                          Grounds 1, 2, 3 and 4 of the Notice of Appeal are rejected.

A Question of Timing

48                  Grounds 6 and 7 of the Notice of Appeal seek to place emphasis upon:

·                    the fact that the contract of employment was not signed until after Mr Robertson had resigned from Ashok Leyland and until after he had commenced employment with the Respondent; and

·                    the statement made by the Federal Magistrate that the course of the negotiation “negates any reliance upon” earlier representations which had not found their way into the contract.

These grounds were dealt with in the written submissions of the Appellant together. The two Grounds, however, seem to be directed to different considerations – the former seems more directed to a question of timing; the latter more directed to the course of negotiations. But, however they were dealt with in submissions, both Grounds are to be rejected.

49                                          The chronology relevant to Ground 6 is within a short compass. It was in October 2007 that Mr Robertson received the first Letter of Offer. This letter was then superseded by the 5 November 2007 letter and it was after this November letter that Mr Robertson on 30 November 2007 resigned his position in India. He signed the employment contract shortly after he commenced employment with the Respondent in January 2008.

50                                          Ground 7, it was understood, was directed to paragraph [35] of the reasons for decision of the Federal Magistrate where the Federal Magistrate expressed his final conclusion as follows:

[35] … The course of the negotiations between [Mr Robertson] and the respondent negates any reliance upon such earlier representations as were made …

The Ground contends that the Federal Magistrate “erred in finding that the Appellant could not rely upon representations which did not find their way into the contract between the Appellant and the Respondent”. Left to one side is whether the Federal Magistrate erred in the manner alleged. The conclusion of the Federal Magistrate is not one that Mr Robertson “could not” rely upon any representation that had not found its way into the contract; the conclusion reached by the Federal Magistrate was one that Mr Robertson had not relied upon those representations.

51                                          Neither Ground 6 nor Ground 7 expose any appellable error.

52                                          The findings of fact as to reliance made by the Federal Magistrate and his reasons for decision, when construed in their entirety, reflect a careful analysis of the evidence presented.

53                                          The conclusions of the Federal Magistrate as to the basis of reliance on the part of Mr Robertson, it is considered, are conclusions properly based upon an assessment of both the terms of the contract and all of the “surrounding facts and circumstances”: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 at [109], 218 CLR 592 at 625 per McHugh J. Those “facts and circumstances” considered by the Federal Magistrate took into account all of the evidence, including a consideration of when the contract was signed and the terms of the contract and, specifically, clause 23.

The Findings as to Reasonable Grounds  

54                                          The “second point” which the Federal Magistrate regarded as “fatal to the applicant’s case is that Mr Binns appears to have had reasonable grounds for making the representations that Mr Robertson would remain with the company for three or more years”: [2010] FMCA 142 at [25]. 

55                                          Given the rejection of Grounds 1, 2, 3, 4, 6 and 7 of the Notice of Appeal it is unnecessary to address the remaining Ground of Appeal. But it has been fully argued and addressed and it is thus appropriate that some short comments should also be addressed to the outstanding Ground 5.

56                                          The relevant conclusions of the Federal Magistrate included the following:

[26] Section 51A shifts the onus of proof to the maker of the representation to establish that the representation was made on reasonable grounds. The applicant submitted that the respondent had produced no such evidence since the respondent’s case has been that Mr Binns did not make the representations alleged. …

The Federal Magistrate then set forth the facts of some authorities which addressed the question whether s 51A can be satisfied where a respondent maintains that he did not make the representations alleged, including both Cummings v Lewis, supra, and O’Neill v Medical Benefits Fund [2001] FMCA 61, and continued (without alteration):

[29] The applicant submits that O’Neill is on all fours with the instant case. However, there are elements present in that case which are absent from this one. First, the status of the applicant’s termination as a redundancy is not in issue. Second, whereas O’Neill had been “head hunted” by MBF to leave secure employment in a move to disadvantage a competitor, Mr Robertson had made the initial approaches to the respondent through Mr Higgins. In the absence of these elements, there is no reason to suspect the genuine intentions of Mr Binns when he indicated that the applicant’s employment would be long term. The fact that the respondent had been experiencing growth when it employed Mr Robertson also supports this conclusion. The evidence annexed to the affidavit of Benjamin Bruce Binns dated 4 December 2009, indicates that prior to about June 2008, Winnebago was experiencing growth in sales, production and employment. The advertisement for the position of Design Manager alluded to this growth, noting that “a restructure” and “ever growing demands” were the reasons for the new role. If all had gone to plan and the company had continued to expand as it appeared to be doing there would be no reason to dismiss Mr Robertson. Mr Binns could not be expected to foresee the coming of the global financial crisis or its affect upon his business when he was negotiating with Mr Robertson in October 2007.

[30] I am satisfied that these circumstances indicate that the respondent had reasonable grounds for making the representation that the Mr Robertson’s employment would be long term.

The Federal Magistrate then addressed some extracts from the evidence given during the hearing.

57                                          The submission advanced on behalf of Mr Robertson that the Federal Magistrate “failed to appreciate that the onus of proof was on the Respondent to rebut the presumption in s.51A(2)” is rejected. Paragraph [26] of the reasons for decision, however, is an express statement as to where the onus lay.

58                                          The subsequent reasoning of the Federal Magistrate, however, is open to serious reservation. It may well be questioned whether the onus imposed by s 51A may be discharged simply by reason of the person making the representation having a genuine belief in the accuracy of the representation being made. Even though it may be accepted that Mr Binns may well have had a genuine belief that the business was growing, and growing to the extent that the new position being advertised was warranted, it is queried whether such matters are capable of providing the “reasonable grounds” required by s 51A(2). Reservation is also expressed as to whether the “evidence annexed to the affidavit” of Mr Binns could fill any void and itself constitute “reasonable grounds”. That evidence was understood to include a document, amongst others, headed “Forecast Sales” for the period from July 2008 through to at least June 2009 and a document headed “Actual Sales” for the period from July 2007 to 2009. There was also some evidence from the sales and marketing manager of the Respondent, Mr Mayo, that “the issue at the time was we weren’t making enough product”. The time to which reference was being made would appear to be August 2008.

59                                          There remained, however, little evidence that at the time the representations were being made to Mr Robertson there were “reasonable grounds” for those representations. “Forecast Sales” and an analysis of “Actual Sales” prepared subsequent to the making of those representations, it is considered, would not satisfy the requirements of s 51A(2). It may, however, be assumed that Mr Binns was aware of the volume of actual sales that had occurred subsequent to July 2007. Those figures, extracted from the document headed “Actual Sales”, and continuing through to December 2007, were as follows:

Assuming that Mr Binns was aware of an increasing volume of sales at the time he made the representations to Mr Robertson, these figures may provide at least the starting point for a contention that he had “reasonable grounds” for making the representations he did.

60                                          Had it been necessary to reach a conclusion in respect to Ground 5, it would have been necessary to consider this evidence more closely. But reservation is expressed as to whether there were “reasonable grounds” for the making of the representations.

61                                          It is, however, unnecessary to resolve Ground 5 of the Notice of Appeal since reliance on the representations was not made out.

Conclusions

62                                          It is considered that Grounds 1, 2, 3, 4, 6 and 7 of the Notice of Appeal have not been made out. Accordingly, it is unnecessary to resolve Ground 5. To employ the language repeated by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy, supra, the conclusions of the Federal Magistrate are not “glaringly improbable” or “contrary to compelling inferences”. Having again considered the evidence, the conclusions of the Federal Magistrate as to the absence of reliance placed by Mr Robertson upon the representations is correct. Certainly no appellable error is discernible in reaching that conclusion.

63                                          In order to succeed on the appeal, it was correctly accepted on behalf of Mr Robertson that he had to win on these Grounds, together with Ground 5, if the appeal was to be allowed.

64                                          The appeal is to be dismissed.

65                                          There is no reason why costs should not follow the event. The Appellant should therefore pay the costs of the Respondent.

ORDERS

66                                          The Orders of the Court are:

1.                  The appeal is dismissed.

2.                  The Appellant is to pay the costs of the Respondent, including reserved costs.

Associate:

Dated:         1 October 2010