AMENLEY PTY LTD v JOBSON SUPREME COURT OF NEW SOUTH WALES — CouRT OF APPEAL MEAGHER JA, HANDLEY JA and SHEPPARD AJA 7 October 1998 [1998] NSWCA 14 APPEAL — evidence — unsupportable finding of fact by trial Judge The late Mr Wood had been a casual employee of the appellant at the time of his death. His legal personal representative successfully argued at trial that there had been a breach of a term in Mr Wood's contract of employment which required his employer to have superannuation arrangements in place for Mr Wood's benefit, which included life insurance. HELD: Allowing the appeal: The trial Judge's finding of the existence of the above term was not supportable. Handley JA. This is an appeal by an employer from a judgment for $50,000 plus interest entered by Craigie DCJ in an action for breach of contract. The late Paul John Wood, whom I will call the deceased, was a casual employee of the appellant from 8 July 1992 to 23 July, and from 5 August until his death on 2 September 1992. The plaintiff, who had been the de facto wife of the deceased in his life time, sued as the administrator of his estate for breach of a term in his contract of employment which it was said bound the employer to have superannuation arrangements in place for the deceased's benefit, including life insurance. The events which the trial Judge held led to an express term being included in his contract of employment took place against the background of the new Superannuation Guarantee Administration Act 1992 (C'wlth). This effectively made it compulsory for all employers to provide superannuation for their employees. The Act was assented to on 21 August of that year andcame into force immediately with retrospective effect from 1 July. Without imposing an enforceable legal obligation on employers, it effectively required them to make payments to an approved superannuation fund based on wages paid to employees from and after 1 July 1992. However those arrangements did not have to be in place and the first payment of superannuation contributions did not have to be made until 14 August 1993, nearly a year after the death of the deceased. There was no direct evidence of any communication, written or verbal, between the deceased and the appellant relevant to the contractual term found by the Judge. The appellant was a small company in the earthmoving business conducted by Mr and Mrs Liliandale, both of whom gave evidence. The only evidence to support the existence of the contractual terms sued upon was that given by the plaintiff, Michelle Jobson and her sister, Carolyn Bray. Michelle Jobson's evidence was that she and the deceased were together in their home not long before his death. He said he was filling out forms and had put their daughter Kristie down 'so I wouldn't get anything if he died'. She did not actually see him filling out any form and had no idea what the forms were. Her sister remembered that the deceased said, 'his boss was going to put him into a super fund and he 2 UNREPORTED JUDGMENTS had to fill out the forms'. She also remembered his statement that Michelle was not going to get a thing as it was all going to Kristie. This hearsay evidence was admitted, over objection, as evidence of the truth of the statements it proved and its admissibility was not challenged upon appeal. The evidence was challenged directly and indirectly at the trial but was accepted by the Judge who proceeded to find that it established the existence of the express contractual term relied upon. The plaintiff did not rely upon the terms of the Commonwealth Act as establishing the obligation sued upon, nor did she rely on the existence of an implied term. The Judge made his finding as to the existence of the expressterm as follows: I conclude that the defendant had in mind the variation of the terms of the employment of the deceased as asserted by the plaintiff. It may well be that the MLC as the plan manager was not so contemplated but certainly a plan with the automatic insurance cover ... the defendant failed to carry out its obligations under the terms of employment with the deceased. The deceased continued working until his death. The estate of the deceased can look to the defendant to put into effect what it was obliged to do and so I have come to the conclusion that the defendant is liable for the payment of a sum of $50,000. In my opinion these conclusions cannot be supported. The evidence for the plaintiff already referred to, taken at its very highest, does no more than establish that the deceased had been given forms by the appellant relating to membership of an employer-sponsored superannuation fund which he had filled in, nominating his daughter as sole beneficiary. There was one further piece of evidence relied upon by Mr Errington for the respondent, namely an admission by Mrs Liliandale, in a letter of 20 October 1993 written to the MLC which became the manager of the appellant's superannuation fund. The MLC had written to the appellant on 24 September 1993 seeking, 'Confirmation from you that the deceased was actively at work at the time of joining the fund'. It does not appear that the MLC then knew the date of the death of the deceased and this is not referred to in the letter. Mrs Liliandale replied, again without identifying the date of the death of the deceased, on 20 October stating, 'The deceased was at work at the time of joining the fund'. She said in the witness box that this statement was not true. The objective facts are that the appellant did not apply to the MLC to become an employer-member of the fund known as the Employment Retirement Plan until 17 February 1993 and the first payment to the MLC was not made until 26 March that year. It is clear that the deceased was not in fact a member of the MLC fund at the date of his death and the contrary was not argued. However it was submitted that the admission recognised that there was an arrangement or contract with the deceased for such membership prior to his death. I cannot read the admission in this way. The correspondence relates to the deceased's membership of the MLC's fund and the admission related to that fund. The deceased was not a member of that fund in his lifetime and the admission was mistaken. The trial Judge himself did not rely on this evidence in coming to his conclusions. There remains the hearsay evidence accepted by the Judge as establishing indirectly the express term of the contract sued upon. In my judgment it is not capable of establishing any such term. There is no evidence that the deceased returned the form to the appellant. The form was never located after his death. That of course cannot be decisive, but it was not produced from the custody URJ AMENLEY PTY LTD v JOBSON (Handley JA) 3 either of the appellant or from the MLC. But even if he had returned the form prior to his death, there is no evidence that the appellant undertook an obligation to the deceased that he would become a member of a superannuation fund carrying life insurance benefits prior to the date of his death. There is moreover no evidence that the appellant had any intention to contract in these circumstances. It was under statutory obligations of a special kind, enforceable in default by a penalty rate of income tax and not directly, to have superannuation arrangements for the deceased in place prior to 14 August the following year. Whatever the appellant did in these circumstances can readily be referred to its intention to comply in due course with its statutory obligations in order to avoid the penal rate of tax. There is nothing to suggest in the meagre evidence available that the appellant intended to enter into any contractual obligations in addition to the statutory obligations which had been imposed on it by Parliament. In these circumstances, in my judgment, the appeal succeeds. The judgment entered by the trial Judge should be set aside. I would enter judgment for the defendant with costs. The respondent is to pay the appellant's costs of the appeal but is to have a certificate under the Suitors" Fund Act. Meagher JA. I agree. Sheppard AJA. I agree with the reasons and orders proposed by Mr Justice Handley. Meagher JA. The orders of the Court therefore are the orders proposed by Mr Justice Handley. Handley JA. There is nothing of the interim arrangements to stay that we need be concerned about? HATCHER: There is a bank guarantee in place that we would wish released immediately. I think the Court's orders will have that effect. (1) Appeal allowed. (2) Judgment entered by the trial Judge set aside. (3) Judgment for defendant (appellant) with costs. (4) Respondent to pay appellant's costs of appeal. (5) Respondent to have a certificate under the Suitors' Fund Act. Counsel for the appellant: G J Hatcher/R Moore Solicitors for the appellant: Marsdens Counsel for the respondent: M R Errington Solicitors for the respondent: Mulally Mylott