Goldman Sachs JBWere Services Pty Limited v Nikolich

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 07 August 2007
• Neutral Citation: [2007] FCAFC 120

FEDERAL COURT OF AUSTRALIA

Goldman Sachs JBWere Services Pty Limited v Nikolich [2007] FCAFC 120

CONTRACT – incorporation of terms – employment contract – whether particular representations in policy and procedures manual were terms of employment contract.

CONTRACT – breach – whether employment contract breached by employer failing to comply with term found to have its source in policy and procedures manual.

CONTRACT – causation – psychiatric injury – whether open to the trial judge to find that employer’s breach caused employee’s injury.

COSTS – Workplace Relations Act 1996 (Cth) – whether s 170CS applies to the whole of a proceeding or only to that part that relates to s 170CP.

COSTS – Workplace Relations Act 1996 (Cth) – whether s 347 applies to appeals from proceedings under s 170CP.

Workplace Relations Act 1996 (Cth), ss 170CK, 170CP, 170CR, 170CS, 347

Baltic Shipping Company v Dillon (1993) 176 CLR 344 cited

Barber v Somerset County Council [2004] 1 WLR 1089 cited

Bostik v Gorgevski (1992) 36 FCR 439 considered

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 considered

Gogay v Hertfordshire County Council [2000] IRLR 703 followed

Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 considered

Hawkins v Clayton (1988) 164 CLR 539 considered

Johnson v Unisys [2003] 1 AC 518 considered

Koehler v Cerebos (2005) 222 CLR 44 cited

Lister v Romford Ice and Cold Storage Co Limited [1957] AC 555 referred to

Loftus v Roberts (1902) 18 TLR 532 cited

Malik v BCCI [1998] AC 20 cited

Maritime Union of Australia v Geraldton Port Authority [2000] FCA 16 cited

McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 referred to

Naidu v Group 4 Securitas [2005] NSWSC 618 cited

New South Wales v Mannall [2005] NSWCA 367 cited

Riverwood International Australia Ltd v McCormick (2000) 177 ALR 133 considered

Scally v Southern Health and Social Services Board [1992] 1 AC 294 cited

State of New South Wales v Paige (2002) 60 NSWLR 371 distinguished

Tai Hing Cotton Mill Limited v Lui Chong Hing Bank Limited [1986] AC 80 cited

Thorby v Goldberg (1965) 112 CLR 597 cited

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 applied

Waters v Commissioner of Police of The Metropolis [2000] 1 WLR 1607 cited

GOLDMAN SACHS J B WERE SERVICES PTY LIMITED v PETER NIKOLICH

NSD 1361 OF 2006

BLACK CJ, MARSHALL & JESSUP JJ

7 AUGUST 2007

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1361 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	GOLDMAN SACHS JBWERE SERVICES PTY LIMITED Appellant
AND:	PETER NIKOLICH Respondent

JUDGE:	BLACK CJ, marshall & jessup jj
DATE OF ORDER:	7 AUGUST 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal be allowed in part.

2. Order 3 made by the trial judge on 23 June 2006 be set aside.

3. The appeal be otherwise dismissed.

4. The appellant pay 90% of the respondent’s costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1361 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	GOLDMAN SACHS JBWERE SERVICES PTY LIMITED Appellant
AND:	PETER NIKOLICH Respondent

JUDGE:	BLACK CJ, marshall & jessup JJ
DATE:	7 AUGUST 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

BLACK CJ

1 This is an appeal against a judgment for damages for breach by the appellant (“GSJBW” or “the firm”) of a contract of employment between it and a former employee, the respondent Mr Peter Nikolich.

2 The appeal raises issues about the content of the employment contract, which the trial judge found to be contained in part in a formal letter of offer and in part in a lengthy document entitled “Working with Us” (“WWU”). The appellant submits that the judge erred in finding that sections of WWU were terms of the contract of employment.

3 The appellant argues, in the alternative, that even if there were terms as found by the trial judge, there was no proper basis for his finding that they were broken. Alternatively again, it argues that if GSJBW was in breach, the breaches were not causative of the respondent’s loss which was, in any event, too remote.

4 The damages awarded by the trial judge reflected his Honour’s finding that Mr Nikolich suffered a serious psychological injury resulting in loss of income, including loss of future income. The judge awarded $435,896 under this head. His Honour awarded a further $80,000 by way of general damages for pain and suffering. The appeal also raises an issue about the award of damages of such a character for breach of contract.

5 The case at trial included claims based upon s 52 and/or s 53B of the Trade Practices Act 1974 (Cth) and s 170CK(2)(a) and (f) of the Workplace Relations Act 1996 (Cth). These claims were rejected by the trial judge and have not been further pursued. The claim under the Workplace Relations Act is, however, relevant to an issue about costs, for the trial judge awarded costs to the respondent notwithstanding s 170CS of the Workplace Relations Act.

6 Mr Nikolich did not argue at trial that GSJBW had been in breach of any common law duty to take reasonable care not to subject him to working conditions reasonably likely to cause him psychiatric injury. He did submit, however, that GSJBW had broken what could be seen as a broadly equivalent term, said to be implied in the employment contract. Having found for Mr Nikolich on the footing that the express terms had been broken, the primary judge made no finding about any such implied term and that matter was not raised on the appeal.

Contract of Employment

7 In May 2000, Mr Nikolich accepted an offer of employment as an associate investment adviser in the Canberra office of GSJBW. It was common ground that the contract of employment was constituted at least in part by a letter of offer dated 4 May 2000. The letter began:

“We are pleased to confirm our verbal offer of employment to you …”

It then set out various terms under headings such as Remuneration, Incentive and Annual Leave, covering the essential elements of the employment relationship. It required a signature confirming “acceptance of the details and conditions of employment as outlined above”. It concluded: “I hereby accept your offer of employment as detailed in the above letter” with a space for Mr Nikolich’s signature.

8 Mr Nikolich accepted GSJBW’s offer by signing the letter in their Canberra office. When he did so he had in his possession the document titled “Working with Us”. The trial judge’s findings as to precisely when WWU came into his possession are not altogether clear, but it was admitted in the appellant’s defence, and it seems not contested at trial, that Mr Nikolich was given the document when he was first offered employment. This was some days before he signed the letter of offer.

“Working With Us”

9 WWU contains 119 pages and covers many topics. It is prefaced with a welcome by the Executive Chairman and by the Group Manager of Human Resources and includes a brief overview of the history of J B Were from its foundation by Jonathan Binns Were in Melbourne in the mid-19^th century. Evidently this section had its origins prior to GSJBW being constituted in its present form.

10 Under the heading “JBWere Team Purpose – Culture In Practice” the document addresses the culture and business philosophy of the firm. This section stresses the importance of a shared purpose. Statements about the culture of the firm include the following:

“Respect and Courtesy

We treat each other with respect and courtesy, as individuals who want the opportunity to contribute, learn and succeed in a positive, safe, secure and inclusive environment that respects diversity. Although we are aggressive in the market place, we are not aggressive with each other.”

The section concludes with the observation:

“It is this team purpose that sets the standard for our practices, behaviour and conduct.”

11 The next section, headed “Overview of our main services”, is largely descriptive and draws on such matters as a commitment “to maintain a culture of compliance within the organisation”. A one page section “Steps to Creating Client Value” is followed by a very lengthy section entitled “Code of Conduct”.

12 The Code of Conduct section covers a large and diverse range of topics, arranged alphabetically and ranging from “Chinese Walls” to “Welcoming Diversity and Preventing Discrimination”. It concludes with quotations by senior people within the firm about diversity, the prevention of discrimination and the value placed by the firm on respect for its people.

13 Within the Code of Conduct section some provisions are expressed in the language of advice, others in the language of direction and some in the language of contract. As an example of the latter, the section headed “Other Employment” begins:

“It is a condition of employment with the firm that no person who is employed on a full-time basis may engage in work for anyone else…”

This particular matter was not dealt with in the letter of offer. Less emphatically contractual in language, but nevertheless more than merely advisory, the “General Obligations” concerning electronic mail are prefaced by “For the duration of your employment… you will agree to…”

14 Under the separate heading “Harassment” it is said that

“The JBWere culture and ‘family’ approach means each person is able to work positively and is treated with respect and courtesy. It is within the context of our culture that all people within the JBWere team will work together to prevent any unwelcome, uninvited and unwanted conduct which makes...