Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Willis Australia Group Services Pty Ltd v Mitchell-Innes (No 2) [2016] NSWCA 43 Hearing dates: On the papers Decision date: 15 March 2016 Before: Macfarlan JA; Ward JA; Leeming JA Decision: The parties are directed to file in the Registry a minute of judgment to give effect to these reasons. Catchwords: PRACTICE AND PROCEDURE – principal judgment on appeal delivered previously – consequential findings concerning quantification of damages and costs orders now made Category: Procedural and other rulings Parties: Willis Australia Group Services Pty Ltd (First Appellant) Willis Australia Ltd (Second Appellant) Donald Mitchell-Innes (Respondent) Representation: Counsel: J Kirk SC/M Seck (Appellants) J Pearce (Respondent) Solicitors: Allens (Appellants) Paul Murphy & Associates (Respondent) File Number(s): CA 2014/376443 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: [2014] NSWDC 250 Date of Decision: 8 December 2014 Before: P Taylor SC DCJ File Number(s): DC 2013/148638 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. THE COURT: The Court delivered judgment on this appeal on 2 December 2015 ([2015] NSWCA 381). In accordance with directions made on that date, the parties filed and served written submissions concerning the quantification of damages and the costs orders that should be made. The issues between the parties that emerged are as indicated below. 2. Through inadvertence no reference was made in the Court's principal judgment to the second appellant which, whilst not Mr Mitchell-Innes' employer, was a related company for whom he performed services. The judgment and orders below were against both appellants and the written submissions on appeal have proceeded upon the basis that that will also be the case with the judgment and orders to be entered and made on appeal. As a result no distinction is drawn in what follows between the roles of the two appellants. Clawback of retention award payments 1. In its principal judgment the Court held that the appellants' summary termination of Mr Mitchell-Innes' employment was in breach of his contract of employment. However it also held that, if that summary dismissal had not occurred, the appellants would have terminated his employment by giving him six months' notice, as they were entitled to do under his contract. On that basis, lawful termination of the contract would have taken effect on 9 May 2013. In these circumstances, the damages to which Mr Mitchell-Innes is entitled as a result of his wrongful summary dismissal must take into account the fact that, but for that wrongful dismissal, his employment would in any event have been terminated lawfully six months later. This requires that any repayments that Mr Mitchell-Innes would have been obliged to make to the appellants at the end of that six month period be deducted from his damages. 2. In 2011 the appellants made a retention award payment of $50,000 to Mr Mitchell-Innes and in 2012 they made a payment of $45,000. These payments were made upon the basis that Mr Mitchell-Innes would repay an identified proportion of them if his employment was terminated prior to certain dates "for any reason other than his physical incapacity, death, redundancy or retirement". As termination on notice would have occurred prior to these dates and would not have fallen within these excepted categories, he would have been obliged to repay $9,722.22 in respect of the 2011 award and $23,750 in respect of the 2012 award on expiration of his six months' notice. 3. Mr Mitchell-Innes' only ground of opposition to these repayment obligations being deducted from his damages was the submission that the appellants' cross-claim by which repayments were sought referred only to his employment's summary termination, which has now been held to have been in breach of contract. However this is not a sufficient answer as it would not have been necessary on expiration of the notice period for the appellants to sue for repayment because the relevant contractual terms entitled them to deduct the retention award repayments from any amounts otherwise due to Mr Mitchell-Innes. The repayments thus fall for consideration in relation to the calculation of Mr Mitchell-Innes' damages rather than as a distinct claim of the appellants by way of cross-claim. This is the way the repayments were approached in argument before the primary judge. 4. As a result, the two amounts should be deducted from Mr Mitchell-Innes' damages. Quantum of damages 1. By reason of this conclusion, Mr Mitchell-Innes' damages should be $89,571.61, as calculated by the appellants. In his submissions Mr Mitchell-Innes indicated that the omission from the appellants' calculation of his damages of an additional element, namely "retention bonus scheme", was not agreed but he advanced no submissions to contradict those of the appellants. The omission must therefore be accepted as correct. Costs 1. The parties agree that costs at first instance should be awarded to the respondent on a party/party basis and not on the indemnity basis, as previously ordered. The indemnity costs order made below was based on an offer of compromise which became irrelevant in light of the result on appeal. Further, as the appellants submit, there is no reason to disturb costs orders made in the District Court on 21 June 2013 in relation to interlocutory matters. 2. The appellants submit that there should be no order as to the costs of the appeal because, although their appeal on liability failed, their appeal on damages succeeded, with the result that Mr Mitchell-Innes' damages were substantially reduced. On the other hand, Mr Mitchell-Innes submits that the appellants should pay his costs of the appeal because he succeeded on the appellants' liability appeal and the time devoted on appeal to the appellants' successful damages point was very limited. 3. The Court has concluded that, as submitted by the appellants, there should be no order for costs of the appeal. The appellants had substantial success in reducing the damages award (from $296,650.75 to $89,571.61 plus interest) and, whilst they failed on their liability appeal, they were able to have reversed the finding at first instance that the appellants had not proved that Mr Mitchell-Innes had engaged in serious misconduct, albeit that this Court took the view that that serious misconduct did not occur in the "serious circumstances" to which the contract of employment referred. Overall both sides therefore had a significant measure of success and no costs order is warranted. Orders 1. The parties should agree upon the amount of interest to which Mr Mitchell-Innes is entitled on his judgment of $89,571.61 and submit a form of judgment providing for the following orders to be made in lieu of orders (1), (2) and (3) made by this Court on 2 December 2015: 1. Appeal allowed in part. 2. Set aside orders 1 and 3 made in the District Court on 8 December 2014 and order 1 made on 12 February 2015. 3. Judgment for Mr Mitchell-Innes against the appellants in the amount of $ [AMOUNT TO BE CALCULATED]. 4. Order the appellants to pay Mr Mitchell-Innes' costs at first instance save for those the subject of costs orders made in the District Court on 21 June 2013. 5. Note that the Court makes no order as to the costs of the appeal. 6. Mr Mitchell-Innes is to have a certificate under the Suitors' Fund Act 1951 (NSW). 1. The only order that the Court makes at this stage is that the parties are directed to file in the Registry a minute of judgment to give effect to these reasons. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 March 2016