WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES HOTCOPPER AUSTRALIA LTD

APPELLANT

 -v-

 DAVID SAAB

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  COMMISSIONER J H SMITH

  COMMISSIONER S WOOD

DELIVERED FRIDAY, 21 SEPTEMBER 2001

FILE NO/S FBA 15 OF 2001

CITATION NO. 2001 WAIRC 03827

_______________________________________________________________________________

Decision  Appeal dismissed.

Appearances

Appellant   Mr R L Le Miere (of Queens Counsel), by leave

Respondent   Mr A D Lucev (of Counsel), by leave

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1                 This is an appeal against the whole of the decision of the Commission, constituted by a single Commissioner, given on 14 March 2001 in matter No 774A of 1999 and brought pursuant to s.49 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”).  The Commission at first instance declared that it had jurisdiction and power to deal with the applicant’s claim and granted leave to appeal against that decision pursuant to s.24(2) of  the Act.

2                 The decision appealed against, therefore, is a decision made pursuant to s.24 of the Act and is final and conclusive, for the purposes of the proceedings before the Commission.  It was not submitted to the Full Bench that the decision appealed against was a “finding”, as defined in s.7 of the Act, and therefore requiring the leave of the Full Bench, as required by s.49(2a) of the Act.  In this case, the decision as to jurisdiction became a decision, for the purposes of s.49 of the Act, when leave to appeal was granted by the Commission making the finding as to jurisdiction pursuant to s.24(2) of the Act.

GROUNDS OF APPEAL

3                 It is against the decision as to jurisdiction that the appellant employer now appeals on the following grounds:-

  “1. The Commissioner erred in law in holding that the Commission has jurisdiction and power to deal with the claim.

      Particulars

   (a) The Commission does not have jurisdiction to hear and determine the matter because the respondent’s application in the matter (“the application”) is not a claim that the respondent has not been allowed by the applicant a benefit to which he is entitled under his contract of service and hence the matter may not be referred to the Commission by the respondent pursuant to section 29(1)(b)(ii) of the Industrial Relations Act 1979 (“the Act”); and

   (b) The Commission does not have power to make the orders sought by the respondent because the application is not an industrial matter as defined in section 7(1) and section 7(1a) of the Act and hence is not within the jurisdiction of the Commission under section 23 of the Act.

  2. The applicant has leave to appeal pursuant to section 24(2)(b) of the Act.

       Particulars

   (a) The Commissioner granted the applicant leave to appeal by order (2) of his decision made 14 March 2001 in the matter.”

BACKGROUND

4                 The respondent employee, Mr David Saab, applied for orders pursuant to s.29(1)(b)(i) of the Act, by an application for relief filed in the Commission on 8 June 1999.  He claimed that he had been unfairly dismissed from his employment with the abovenamed appellant on 25 May 1999.  He sought reinstatement to the position of Chief Executive Officer of the appellant and also claimed, pursuant to s.29(1)(b)(ii) of the Act, that he had been denied contractual benefits by his employer to which benefits he was entitled under his contract of employment and which were not benefits due under an award.

5                 On 15 June 2000, the Commission, after a hearing, ordered that the abovenamed respondent be reinstated to his former employment, with effect of and from 6 June 2000 without loss of earnings and benefits as if he had not been dismissed, having found that he was harshly, oppressively or unfairly dismissed.

6                 Further, the Commissioner directed in the order that application No 774 of 1999 be divided, and granted liberty to Mr Saab to apply in respect to shares and options to buy shares, the subject of a claim for contractual benefits against the appellant.  This was then pursued by application No 774A of 1999.

7                 The substantial background was that the relevant terms of Mr Saab’s employment with the appellant were set out in a letter from the appellant to Mr Saab dated 9 March 1999, signed by Mr Saab and by Mr Ross Arancini on behalf of the appellant. 

8                 Clause 4 of that contract provided, inter alia, that, on commencement of Mr Saab’s employment on 17 February 1999, he would be issued with 3.5 million fully paid ordinary shares in the capital of the appellant at an issue price of 0.0001 per share (the issue price).  The shares were subject to a call option in favour of a Mr Ron Gully which was to expire on 16 February 2003.  (That call option is not relevant to a determination of this appeal.)

9                 Clause 4 provided further that, within five business days of the acceptance by Mr Saab of the terms of the contract, i.e. in fact by 16 March 1999, the appellant was to issue Mr Saab with options to purchase 6 million fully paid ordinary shares in the capital of the appellant, details of which are listed at page 5 of the appeal book (hereinafter referred to as “AB”).

10              Mr Saab’s claim is for a benefit it was alleged was denied to him, it being a sum of money equal to the value of the shares and options as set out in paragraphs 4 and 5 of the Particulars of Claim. 

11              For convenience, I reproduce Clause 4.1 to 4.7 and paragraph 5 of the particulars hereunder:-

  4.1 The Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their highest listing price amounting to a total of $2.24 million and calculated as follows:-

   3.5 million shares x $0.64 cents on 8 February 2000    = $2.24 million.

   See paragraph 145(e) of the Witness Statement of the Applicant dated 29 February 2000 (the Statement).

  4.2 Alternatively, the Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their market value on 28 February 2000 (some 2 days prior to the resumption of the hearing of this matter on 1 March 2000) amounting to a total of $1.75 million and calculated as follows:-

   3.5 million shares x $0.50 cents as at 28/2/2000 = $1.75 million.

   See paragraph 145(e) of the Statement.

  4.3 Alternatively, the Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their market value on 11 January 2000 (when trading in the shares was halted pending the announcement of the takeover) amounting to a total of $1.575 million and calculated as follows:-

   3.5 million shares x $0.45 cents as at 11/1/2000 = $1.575 million.

  4.4 Alternatively, the Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their market value on 12 January 2000 (on the first announcement of the takeover) amounting to a total of $1.645 million and calculated as follows:-

   3.5 million shares x $0.47 cents as at 12/1/2000 = $1.645 million.

  4.5 Alternatively, the Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their market value on 8 February 2000 (when St George’s Bank increased its stake in Bourse Data) amounting to a total of $1.820 million and calculated as follows:-

   3.5 million shares x $0.52 cents as at 8/2/2000 = $1.820 million.

  4.6 Alternatively, the Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their market value on 27 April 2000 (when the takeover offer became unconditional) amounting to a total of $1.120 million and calculated as follows:-

   3.5 million shares x $0.32 cents as at 27/4/2000 = $1.120 million.

  4.7 Alternatively, the Applicant claims a sum of money equal to the loss of the benefit of the Shares based on their market value on 15 June 2000 (the last day of trading) amounting to a total of $840 thousand and calculated as follows:-

   3.5 million shares x $0.24 cents as at 15/6/2000 = $840 thousand.

   Particulars

   The Applicant says that had the Respondent properly performed the terms of the Contract then the Applicant would have had the opportunity of realising the value of the Shares at their respective prices on the respective dates as set out in paragraphs 4.1 - 4.7 above and which was denied by the Respondent.

   The Applicant says that he would have availed himself of that opportunity no later than 28 February 2000.

  5. Quantum of the Options

  5.1 The Applicant claims a sum of money equal to the lost opportunity to him of entering into the market, exercising his options and realising their value during the exercise period (from 9 March 1999 to 9 March 2003), further particulars of which will be provided by way of expert evidence, prior to and at the hearing of this matter.”

 (See pages 6-7 (AB).)

12              Clause 6.1 of the applicant’s particulars, which contains particulars of the orders sought, reads as follows:-

  “6.1 The Applicant seeks an order for the benefit denied to him namely a sum of money equal to the value of the benefit of the Shares and the Options as set out in paragraphs 4 and 5 above.”

 (See page 8 (AB).)

13              This application was opposed by the respondent employer for various reasons.  In particular, it was contended that there was no jurisdiction in that the claim was not an industrial matter and was, therefore, beyond the jurisdiction of this Commission.  It was also contended that this Commission does not have the jurisdiction or power under s.29(1)(b)(ii) of the Act or otherwise to award Mr Saab a sum of money equal to the value of the benefit of the shares and options as set out in paragraphs 4 and 5 of Mr Saab’s Particulars of Claim.

14              The Commissioner referred to the decision of the Full Bench in Perth Finishing College Pty Ltd v Watts 69 WAIG 2307 (FB).  Based on that authority, the Commissioner found that what was claimed were benefits and that the Commission had jurisdiction and power to deal with the claim, saying that the circumstances in this case were so similar to the circumstances described to the Full Bench in Perth Finishing College Pty Ltd v Watts (FB) (op cit) that it was right to apply the ratio of the decision in that case.

15              The Commissioner held that he did have jurisdiction and power to deal with the claim in full, as particularised, as I have said.

16              In his written reasons for decision issued on 7 June 2000, the Commissioner found that:-

(a) Mr Saab was entitled to a benefit of the contract with respect to the shares and options.

(b) He was unable to order specific performance of the shares and options.

(c) That he needed further submissions to:-

(i) Determine whether the Commission has the power to make an award of “damages” if the specific terms of the contract cannot be ordered; and

(ii) Assess the benefit of the shares and options.

17              It was conceded by the applicant at first instance that the Commission was unable to order specific performance of the agreement to effect a transfer of shares and to enable the option to be exercised by Mr Saab.  Further, the Commissioner accepted the applicant’s submissions that “the Commission is unable to order that the shares and options provisions in the contract be issued” (see page 83(AB)).

18              The Commissioner then went on to make these observations as to the reason for the non availability of the remedy of specific performance as follows:-

“Finally the evidence of a call option in favour of Mr Gully is irrelevant to whether the applicant is entitled to be awarded damages or other compensation as distinct from the quantum.  The applicant says that by reason of Clause 3.5 of the respondent’s Constitution and given that shareholder approval had not been obtained for share issues and options sought by the applicant, there are grounds that ought lead to a refusal to grant specific performance of the shares and options provisions in the employment contract.  Not to do so would compel the respondent to issue shares and options in breach of it’s Constitution and the Rules of the ASX.  However, the applicable provisions of the contract were not at the relevant time in contravention of the respondent’s constitution, Section 208 of the Corporations Law or the listing rules, but even if they were, they are not rendered void or otherwise unenforceable.  This does not mean that there should not be an award of damages or other compensation made to the applicant.  The other matter upon which comment should be made is the suggestion by Counsel for the respondent that the Commission is not a Court for the purposes of the Corporations Law.  These matters have been discussed before the Industrial Appeal Court in Helm v Hansley Holdings Pty Ltd in liquidation (1999) 79 WAIG 1860, which concluded the Commission is a Court for those purposes.”

(See pages 82-83(AB).)

19              That observation and Mr Saab’s concession raises the question whether that term of the contract was unlawful, void or voidable as being beyond the power of the company to agree to or perform and the further question whether, if the contract was not able to be performed, there was any benefit to which Mr Saab was entitled, or to which he could be entitled under the contract of employment.

20              A further interesting question is then raised as to whether, because specific performance was conceded to be achievable, i.e. that transfers of the shares directly or following the exercise of an option was not within power or lawfully achievable, there was a denial of any benefit by the appellant; given that, in my opinion, a denial would constitute a refusal or omission by the appellant employer and not an inability to transfer arising from its constitution or some external rules by which it was bound.  That question was not before us on appeal, but it may have some influence on how this Full Bench ought to view questions of jurisdiction and power in this appeal. 

21              There is a further interesting question as to whether there are any conditions precedent, in time in particular, for the performance of the contract by Mr Saab, but again, that is not an issue on this appeal.

ISSUES AND CONCLUSIONS

22              The appellant’s case on this appeal is that the Commissioner erred in finding that he had jurisdiction to hear the claim of Mr Saab for an order for a sum of money equal to the value of shares and options which the appellant was required, by the contract of employment, to issue to Mr Saab but which it failed to issue.

23              Second, it was submitted that there was no power in the Commission to order that the appellant to pay to Mr Saab a sum of money equal to the value of the shares and of the options.

24              The nature of the errors submitted to have been made were as follows:-

  (a) the Commission does not have jurisdiction to hear and determine the matter because the application is not a claim that the applicant has not been allowed by HotCopper a benefit to which he is entitled under his contract of service and hence the matter may not be referred to the Commission by the applicant pursuant to section 29(1)(b)(ii); and

  (b) the Commission does not have power to make the orders sought by the applicant because the application is not an industrial matter as defined in section 7(1) and section 7(1a) and hence is not within the jurisdiction of the Commission under section 23.”

25              S.23(1) of the Act confers jurisdiction on the Commission, in broad terms, in relation to any industrial matter, and reads as follows:-

  “Subject to this Act, the Commission has cognizance of and authority to enquire into and deal with any industrial matter.”

Some Authorities

26              Before I turn to the consideration of these issues, I wish to deal with some of the authorities which were cited, principally RRIA v ADSTE 68 WAIG 11 (IAC) (Pepler’s Case) and Sakal v T O’Connor & Sons Pty Ltd 75 WAIG 1509 (IAC).

27              Pepler’s Case is authority for the proposition that there is nothing in the Act to justify the exercise of jurisdiction to award a dismissed employee compensation or any other money payment, except as an incident to an order for reinstatement or re-employment.  That ratio decidendi, identified by Kennedy J in Sakal v T O’Connor & Sons Pty Ltd (IAC)(op cit) at page 1509, was held to apply to claims for contractual benefits where the contract of employment was no longer afoot and there was no order sought for reinstatement.  Of course, as I observed above, a claim for contractual benefits, which would once have been outside jurisdiction on that basis, is now within jurisdiction since the insertion in the Act of s.7(1a). 

28              I would also observe, as Kennedy J observed in Sakal v T O’Connor & Sons Pty Ltd (IAC)(op cit) at page 1509, that “A rule enunciated by a judge as the rule upon which he has acted will be the best guide of all to the ratio.”

Was there jurisdiction and power to make the orders sought?

29              This was an application brought under s.29(1)(b)(ii) of the Act whereby Mr Saab sought an order that he be paid the monetary value of shares and options to purchase shares which the appellant bound itself to provide, transfer and afford and did not, pursuant to the contract of employment.

30              There is also a claim for lost opportunity to realise the value of the shares at their respective prices, which is alleged to be a benefit denied to Mr Saab (see the particulars in the last two paragraphs of No 4 of the Particulars of Claim (page 7(AB))).  Further, there is a claim, in paragraph 5.1 and in part in paragraph 6.1 of the Particulars of Claim, for a sum of money equal to the lost opportunity to Mr Saab of entering the market, exercising his options and realising their value during the exercise period.

31              The Commissioner found that Mr Saab was entitled, under his contract of service, to a benefit with respect to the shares and options.  That benefit is the entitlement under paragraph 4 of the contract of employment (see pages 55-56 (AB)) to be issued with the shares and options.

The Nature of s.29(1)(b)(ii) Applications – This Claim

32              S.29(1)(b)(ii) of the Act reads as follows:-

  “(1) An industrial matter may be referred to the Commission — 

   ....

   (b) in the case of a claim by an employee — 

    ....

    (ii) that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of service,

    by the employee.”

33              I observe that a claim made under s.29(1)(b)(ii) of the Act is not a claim for breach of contract of employment, in the common law sense, because the ability to make the claim, the nature of the claim and the remedies available are limited by and also stem from the wording of the sub-section.  S.29(1)(b)(ii) prescribes and defines a particular statutory breach of contract within those limitations.

34              The limitations (and/or conditions precedent to the exercise of jurisdiction and/or power) include the following:-

(a) The claim must relate to an “industrial matter”, as defined in s.7 of the Act.

(b) The claim must be made by an “employee”, as defined in s.7 of the Act.

(c) The benefit claimed must be a contractual benefit, i.e. the claimant must be entitled to the claim under his/her contract of service.

(d) The subject contract must be a contract of service.

(e) The benefit must not arise under an award or order of the Commission.

(f) The benefit must have been denied by the employer.

 (See also the discussion of the nature of s.29(1)(b)(ii) claims in Ahern v AFTPI  79 WAIG 1867 (FB).)

35              In this case, there were no issues concerning (a), (b), (c), (d), (e) and (f), it being common ground that the parties were employer and employee bound by a written contract of service and that, if there were “benefits” claimed, they had been denied.  It was also not suggested that the “benefits” claimed and said to be denied arose under an award or order of this Commission.  It is also clear that the denial of the benefits (if denial of benefits there were) is alleged to have been caused, to some extent at least, as it was, by Mr Saab’s unfair dismissal.

36              It is true that Mr Saab did not seek an order that the appellant transfer to him the shares and options in accordance with paragraph 4 of the employment contract.  It is also true that Mr Saab claims a sum of money equal to the value of the shares and options.  (Clause 6.1 makes that clear.)

“Entitled”?

37              Whilst a discussion of the meaning of “entitled” or “entitlement” occurred in Poulos v Walters 72 ALR 136 (FCFC), in the context of an award, nonetheless, similar terminology is, in my opinion, applicable to rights and obligations under a contract of employment and I adopt that terminology.  To be entitled to a benefit can be understood in the context of this principle, namely that, where there is a contract of employment, the rights and obligations created by that contract are “enforceable” between the parties (see also the discussion in Perth Finishing College Pty Ltd v Watts (FB) (op cit)).

38              In the case of contractual benefits (as rights and obligations) and which have been denied, these are “enforceable” under the Act and within the limitations which I have mentioned above, by proceedings under s.29(1)(b)(ii).  I do not use the word “enforceable” here, in the sense in which it is used in relation to proceedings brought under s.83 and s.84A of the Act.

39              Mr Le Miere QC, on behalf of the appellant, submitted that the contract must be the immediate and direct source of the entitlement to the benefit (see Elmslie v Federal Commissioner of Taxation (1993) 118 ALR 357 per Wilcox J at 370-371 and 373).

40              The question of whether a claimant is entitled to a benefit under a contract depends on the benefit being a benefit, and also a benefit to which he is entitled under a contract.

41              In Perth Finishing College Pty Ltd v Watts (FB)(op cit), the Full Bench held at page 2315 that “under” is synonymous with “by virtue of” or “pursuant to” and that “pursuant to” means “in accordance with and consequent and conformable to”.  I apply those definitions.

42              If one is entitled to a benefit “under” a contract, therefore, one is entitled, by virtue of, pursuant to, or in accordance with and consequent upon and conformable to it (see also Garbin v Wild (1965) WAR 72 at 75 (FC)).  In this case, the “benefits” to which Mr Saab was entitled were the shares and the right to exercise the options to purchase.  That was what was prescribed in the contract and what he was entitled to claim “specific performance” of under the contract, subject of course to the availability of that remedy and to what I have said above concerning actual entitlement.

43              Subject to the question of inability to transfer shares, as I have observed, there is no doubt, and it is quite clear that there was an entitlement in those terms in the employee, Mr Saab, contained in and existing because of, the contract of employment to the transfer of shares and the transfer of any shares which he exercised an option to acquire.

44              It is quite clear that, if the rights to acquire shares directly or by option were benefits then, as an employee, a party to a contract of employment conferring those “benefits”, Mr Saab was entitled to them and could “enforce” that right pursuant to s.29(1)(b)(ii) of the Act.  Since that was the case, he was “entitled”, within the meaning of the sub-section and the contract was the direct source of the benefits.

Was a Benefit Claimed?

45              The first question raised by Mr Le Miere QC was whether what was claimed and what was sought to be ordered constituted a “benefit”, within the meaning of s.29(1)(b)(ii) of the Act.

46              On a proper construction of the contract of service, which was in written form, or substantially in written form, and applying the ordinary natural meaning to the words, read in the context of the whole of the instrument, the benefit which the appellant agreed to confer was:-

(a) 3,500,000 fully paid ordinary shares.

(b) Within five days of the compliance of the terms and conditions of employment, i.e. on or before 16 March 2000, Mr Saab would be issued with options to purchase shares as particularised in the agreement (see pages 55-56(AB)) over a period of four years at the values expressed and agreed.

Those are the “benefits” conferred, no more and no less.

47              The Commission’s source of jurisdiction and power in relation to contractual benefits is, as was submitted, s.29(1)(b)(ii) of the Act.  The section is also meant to provide a means, pursuant to s.23(1) and s.29(1)(b)(ii), to resolve disputes between employers and employees with a maximum of expedition and a minimum of legal form in relation to claims for contractual benefits (see s.7(1), s.7(1a), s.26(1)(a) and (c), s.26(2), and s.6(b) and (c) of the Act) (see also Kennedy J’s observations as to the width of jurisdiction conferred by s.23 of the Act in RRIA v ADSTE 68 WAIG 11 (IAC) (Pepler’s Case) at page 18).

48              In that context, in my opinion, the meaning of s.29(1)(b)(ii) of the Act must be ascertained by reading it in the context of the whole of the Act, having particular regard to s.6(b) and s.6(c) of the Act, which read as follows:-

 “The principal objects of this Act are — 

  .....

 (b) to encourage, and provide means for, conciliation with a view to amicable agreement, thereby preventing and settling industrial disputes;

 (c) to provide means for preventing and settling industrial disputes not resolved by amicable agreement, including threatened, impending and probable industrial disputes, with the maximum of expedition and the minimum of legal form and technicality;”

 (See also s.26(1)(a) of the Act.)

49              Some emphasis should be laid on the following words in s.6(c) of the Act, “to provide means for preventing and settling disputes” and “the maximum of expedition and the minimum of legal form and technicality”.  Further, a generous or liberal interpretation should be applied to s.29(1)(b)(ii) which is, like s.29(1)(b)(i) of the Act, remedial legislation providing a remedy for that class of persons being employees who are denied contractual benefits to which they are entitled (see Bogunovich v Bayside Western Australia Pty Ltd 79 WAIG 8 (FB) and see Bull and Others  v Attorney-General for New South Wales [1913] 17 CLR 370)).

50              I would also add that, in the interpretation of a provision of a written law, a contention that would promote the purpose or object, including the written law, (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object (see s.18 of the Interpretation Act 1984 (as amended)).  The express relevant purpose of the Act, in this case, is evidenced by s.6(b) and (c), which are the two most relevant written objects.

51              First of all, what is claimed must be a benefit.  The word “benefit” has not been defined in the Act.

52              However, the word “benefit” was defined by Johnson C in Balfour v Travelstrength Ltd (1980) 60 WAIG 1015 as follows:-

  “Benefit ought to be wide enough to allow an employee to bring to the Commission a matter in which the employee believes that he/she has been deprived of an advantage, entitlement, right, superiority, favour, good or perquisite by the action of an employer in contravention of a provision of the contract of service.”

 This definition was approved and applied by the Full Bench in Perth Finishing College Pty Ltd v Watts (FB)(op cit) at page 2313, and I apply it here.  The lack of limitation on the meaning of the word “benefit”, or more accurately, the breadth of meaning permitted, is emphasised by the Full Bench in Perth Finishing College Pty Ltd v Watts (FB)(op cit) at pages 2313-2314 (see also Welsh v Hills (1982) 72 WAIG 2708 (FB)).  That sort of liberality and breadth in interpretation is consonant with the approach required by s.6(b) and (c) of the Act, because the provisions are remedial and because such an interpretation, in terms of the above definition of the word by Johnson C (supra) in Balfour v Travelstrength Ltd (op cit), further promotes the objects of the Act.

53              In my opinion, the word “benefit” should be construed widely, having regard to s.23 of the Act and the power to “deal with” an “industrial matter”, to s.29(1)(b)(ii) of the Act and to the objects of the Act, s.6(b) and (c) and s.26(1)(a) of the Act, to include not only a claim but an order for the value of the “benefit”.  S.23A of the Act also confers power in the Commission to “deal” with industrial matters – again words of breadth.

54              It is noteworthy that, even in contracts of employment, where remedies are sought within the narrower confines of the common law, amounts equivalent to the period required to terminate a contract, equivalent to the loss of tips, a share of profits or bonuses above the amount of salary, use of a car, relocation expenses and pension or superannuation entitlements, are accounted as recoverable benefits.  (See Macken, McCarry and Sappideen, “The Law of Employment”, 4th Edition at pages 299-306.)

55              The contention for the appellant was that Mr Saab did not seek an order that the appellant issue to him the shares and options which it was bound to do pursuant to the contract of employment.  It was submitted that what was sought was not a benefit entitlement which arose from the contract.

56              It was conceded, as I have observed above, that the benefits claimed could not be obtained by an effective order for “specific performance”.  (In fact, the reason for such a remedy not being available may also be because it is not available as a matter of law.)  If that concession had not been made, of course, such an order would plainly be competent and would be the order which, subject to the merits, was required to be made to confer the benefits denied to Mr Saab and to which he was entitled.  The remedies which Mr Saab now seeks are sought because the prime and arguably most apposite remedy was conceded not to be and held not to be available.

57              It is, however, a little misleading to refer to an order that a contractual benefit claimed pursuant to s.29(1)(b)(ii) of the Act as an order for specific performance, although that phrase is sometimes used as convenient shorthand in this jurisdiction.  An order for “specific performance” in this context would plainly be an order relating to rights conferred on an employer by an employee pursuant to a contract of employment and the obligations of the employee thereunder, and thus an order providing to the employee the benefit to which he was entitled and which he claimed.  However, such an order is not to be read as or treated as an order for specific performance made in the civil courts in the exercise of their equitable jurisdiction.  It is an order made within power, pursuant to s.29(1)(b)(ii) of the Act, to confer upon an applicant a benefit to which he or she was entitled and which he or she was denied.

58              The claim of Mr Saab is for a benefit denied him, namely a sum of money equal to the value of the shares and also the value of the shares, the subject of options, in the absence of a conceded inability to order the performance of the contract so as to confer the benefits.  The claim was for that sum of money to be assessed in a number of specified ways.  Mr Saab also claimed, as I have observed, an order that there be paid to him a sum of money equal to the lost opportunity to him of entering into the market, exercising his options and realising their value during the period within which he was entitled to exercise the option, namely 9 March 1999 to 9 March 2003 (see pages 6-7(AB)).

59              The rights which the contract conferred upon Mr Saab which he could enforce at law and in equity, and obligations in respect of the provision of such entitlements to him were placed upon the appellant by the contract were rights to property in shares by direct transfer of shares and by the exercise of an option to acquire shares.  Such entitlements and obligations were also clearly “enforceable” by virtue of s.29(1)(b)(ii) of the Act.  What was claimed, subject to the exceptions referred to hereinafter, was a “benefit”.

60              The right given to the employee to obtain property in shares and the right to do the same upon the exercise of an option to purchase shares were rights (and benefits) expressly conferred, and benefits existing pursuant to, or in accordance with, and consequent upon, and conformable to, the contract of employment.  The direct source of the right to property in the shares directly, or by option and the obligation to effect this was conferred on Mr Saab, by virtue of and conferrable with the contract of service.  Put shortly, Mr Saab was thereby entitled to shares and to shares by exercise of an option to purchase them at the prescribed dates or within prescribed times.

61              To interpret the word “benefit” to exclude the monetary value of the “benefit” would be to deny the intention of the legislature and to torture the word “benefit”.  It would lead to absurdity and be quite inconsonant with the letter and/or the purpose of the Act (see s.6(b) and (c) in particular).  In many cases, the benefit sought, such as the use of a car or the provision of a house, would be unrecoverable as a benefit, if its value could not be ordered to be paid.  Nothing in the statute forbids this approach.  The section, read in the context of the whole of the Act, leads inexorably to such an approach.

62              Further, such a construction effects no absurdity, ambiguity and leads to consonance with the Act as a whole, or furthers the objects of the Act and is consistent with the clear purpose of the Act, as expressed in s.29(1)(b)(ii) and in the objects and tenor thereof  (see Pearce and Geddes, in their book “Statutory Interpretation in Australia” (4th edition) Chapter 2; and s.18 of the Interpretation Act 1984 (as amended)) (see also per Higgins J in The Australian Boot Trade Employés’ Federation v Whybrow & Co and Others 11 CLR 311 at 341-342; and Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 35 ALR 151 at 169-170 per Mason and Wilson JJ).

63              It was submitted by the appellant that a civil court may award damages but the Commission, under s.29(1)(b)(ii) of the Act, may not, i.e. in relation to the claim for breach of contract for failing to issue shares and options, but that this is not a benefit to which Mr Saab is entitled under his contract of employment.  Indeed, he was claiming part of his “remuneration”, as that is defined in Capewell v Cadbury Schweppes Australia Ltd 78 WAIG 299 (FB).  The Act recognises and clearly marks the distinction between a benefit under an employee’s contract of service, i.e. a benefit which has its genesis in the contract and is identified by the contract in an express or implied term thereof or a collateral agreement thereto and an amount to which a claimant is entitled on the one hand, and a claim for compensation for loss or injury caused by the wrongful act of unfair dismissal which is, in fact, a statutory tort and attracts a remedy in compensation akin to but not to be characterised as damages on the other.

64              Therefore, s.29(1)(b)(ii) of the Act does not confer a “right of action” in damages for loss occasioned by a denial of contractual benefits.  The section creates a limited right of action to apply for a limited remedy for statutory breach of contract.  It is not limited, though, to an action to be taken after the contract has ended.  One can claim a benefit during the course of the contract.

65              However, the “cause of action” and the remedy are limited to a claim of benefit denied.  Further, there is a distinct difference between the value of the shares for the purposes of determining the amount of the benefit and for the assessment of damages.  Mr Saab was entitled to the transfer of shares or their value under s.29(1)(b)(ii) of the Act.

66              Otherwise, he was entitled to their value as quantification of a benefit (but not to damages), if Mr Saab is able to establish the value.  If the shares were not, by option or otherwise, transferable because they were unable at law to be so transferred, that goes to the question of entitlement and whether there was any and not to the quantum or nature of the benefit.

67              However, I emphasise that the establishment of the value of the benefit is not to be confused with the question of whether jurisdiction or powers to make the orders sought exists.  The two questions are entirely separate, of course.  If there is power and jurisdiction, the Commission decides the quantum value of the benefit for the purposes of any order.

68              It might, of course, have been contended, but it was not, that the benefit to which Mr Saab was entitled and which he was denied was not merely the shares and the shares transferable after the exercise of the option, but the profit derivable from them, too, upon sale and as is claimed in the alternative and also outright.  (Incidentally, it is not clear, of course, interestingly, how one would describe a “loss” incurred upon the sale of the shares so acquired.) 

69              I think that such a contention, were it made, could be answered in the following way.  First, that is not what the agreement says and it is unambiguous.  Second, any loss of profit upon sale is and was not part of the benefit conferred by the contract.  All that the employer could do and did do was to provide a benefit in the form of chattels, namely shares of a certain value and an option to acquire other shares.  The end result is that he would acquire shares at particular times and because he was an employee.  Whether the shares were sold by Mr Saab, or retained by him, sold at a profit or at a loss were matters dependent upon his acts.  Such a change in the ownership of the shares was not part of the nature, quality or substance of the benefit conferred on him, but depended on a transaction between him and third parties.

70              A claim for loss of opportunity or for damages for the inability to realise the value of the shares is not a claim for a benefit (see Commonwealth of Australia v Amann Aviation Pty Ltd 104 ALR 1 (HC)).

71              The nature of the claim and of claims for damages for breach of contract at common law and the difference of such claims and remedies for claims under s.29(1)(b)(ii) of the Act was well illustrated.

72              The expressions “expectation damages”, “damages for loss of profits”, “reliance damages” and “damages for wasted expenditure”, are simply manifestations of the principle that a person who has sustained loss by reason of a breach of contract is entitled to be placed in the same position, so far as money can do it, as if the contract had been performed.  An award of reliance damages or damages for wasted expenditure does not represent direct recovery of the wasted nett expenditure (see per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ).

73              Where it is not possible for a plaintiff to demonstrate to what extent the performance of a contract would have resulted in a profit, he/she can seek to recover expenses reasonably incurred.

74              The claim for the shares, insofar as it relates to the loss of opportunity to realise their value at various prices on the dates in question, is a claim for damages, as Commonwealth of Australia v Amann Aviation Pty Ltd (HC) (op cit) makes them.  Insofar, however, as the claim is a claim equal to the market value of the shares property which was denied Mr Saab at the date when he would have obtained property in the shares, it is not but a claim for the value of the benefit, i.e. property in the shares, which was denied Mr Saab.  In my opinion, Pepler’s Case (op cit) is authority for the proposition that compensation, as such, cannot be claimed.

75              What the sub-section does do is to confer on an employee, entitled to contractual benefits under a contract of employment and denied them, to seek and obtain orders to obtain those benefits.   It is right to say that s.29(1)(b)(ii) of the Act gives no power to order compensation at large; or , if it does, I am not persuaded upon the submissions made on this appeal.

76              The claim for benefits cannot be a claim for compensation nor can the order sought be one for compensation (see Belo Fisheries v Froggett 63 WAIG 2394 (IAC) per Olney J).

77              As to the claim in respect of the option, the benefit to be conferred was the right to acquire shares which should have been transferred to Mr Saab had he exercised an option at particular times; the denial occurred when the contract was terminated by the employer before the date for transfer, because of the termination of the contract of employment, so that it was no longer open to Mr Saab to exercise the option so that property would pass in the shares before 2003.  He was, therefore, denied the opportunity to exercise the option and denied the benefit of property in the shares, had he exercised the option, which was the benefit of which the contract was the direct source.  A claim in that respect and orders to pay the value of the shares so assessed were also within power and jurisdiction.

78              The contract cannot be read as conferring a benefit manifested in an opportunity to sell the shares for profit, for those reasons.

79              The profit allegedly denied on the putative sale of any of the shares was not a benefit denied.  The only benefit was a right to take property in shares by transfer, or by transfer following the exercise of an option, which benefit was denied by the termination of the contract of employment.  Those benefits were quantifiable in money terms and within power and jurisdiction for the reasons which I have outlined above.

80              Further, a claim for the loss of opportunity to sell the shares at a profit was and is a claim for damages at large or compensation, which is not a claim within jurisdiction or power within s.29(1)(b)(ii) of the Act (see per Kennedy J in Pepler’s Case (op cit) at page 18). (See also the characteristics of a claim for damages for lost opportunity referred to in Commonwealth of Australia v Amann Aviation Pty Ltd (HC)(op cit).)

81              The only benefits which the contracts purported to confer were a right to property in shares, directly by transfer or indirectly by the exercise of an option.  These are the benefits which had their source in the contract.  The benefit did not include a right of action based on their profitability or otherwise.  The only entitlement relevant to the claim under the contract was to the remuneration, of which those benefits were part.  They were, and I would find, benefits within the meaning of s.29(1)(b)(ii) of the Act and they were claimed as such.

82              Accordingly, for those reasons, I hold that this was a claim for a benefit to which Mr Saab was entitled under his/her contract of employment and which he was denied and that an order that he be paid the value of the shares required to be transferred to him be made, whether by option, if it is able to be established, is within power and jurisdiction, pursuant to s.29(1)(b)(ii) of the Act.  (I refer again to the question whether there was a benefit under the contract because of the conceded inability to effect a transfer of shares.)

83              I would add that it may be necessary to pray in aid s.26(2) of the Act if there is no need to provide relief, other than that sought, but that is a matter for the Commission constituted to hear and determine the matter.  Further, I do agree and it should always be borne in mind that s.26(2) of the Act is procedural and cannot confer jurisdiction or power where jurisdiction or power does not exist (see Pepler’s Case (op cit) and the comments therein in relation to s.26(1)(a) of the Act, which, in my opinion, are applicable to the whole of s.26).

84              However, the matter before the Commission, save and except for the claim for and the orders sought in relation to the loss of opportunity to sell the shares at a profit, or any claim for lost profit, however expressed, was within jurisdiction and power.

Jurisdiction – Industrial Matter or Not?

85              Was the application within jurisdiction, as relating to an “industrial matter” and was the remedy sought within jurisdiction for the same reason?

86              The second head of argument was that the claim for “damages”, as it was characterised in submissions, is not an “industrial matter”, as defined in s.7(1) of the Act.  Most appositely, s.7(1) of the Act defines an industrial matter, most relevantly for the purposes of this appeal, as follows:-

  ““industrial matter” means, subject to section 7C, any matter affecting or relating to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter relating to — 

  (a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment;”

87              S.7(1a) of the Act expressly provides that an industrial matter is, inter alia, a matter relating to the failure of an employer to allow an employee a benefit under his contract of service (employment).  It does not provide that an industrial matter includes a claim for compensation or damages for failure to allow an employee a benefit under his contract of service.

88              Olney J in Pepler’s Case (op cit) held that the Act does not empower the award of compensation at large.  Kennedy J held that s.29(1)(b) of the Act, now s.29(1)b)(ii), is restricted to the employee’s contractual rights and does not empower the award of compensation at large.

89              In Sakal v T O’Connor & Sons Pty Ltd (IAC)(op cit), the appellant sought compensation for the balance of a fixed term employment and a redundancy payment pursuant to s.29(b)(ii), now s.29(1)(b)(ii) of the Act.  The Industrial Appeal Court held that the Commission did not have jurisdiction or power to make an order awarding compensation or any other monetary payment, and that this principle applied to cases concerned with existing contractual entitlements.

90              It was submitted that this was not a claim for a sum of money equal to the value of Mr Saab’s benefit under his contract of service.  It is a claim for a sum of money equal to the value of the benefit he was entitled to under the contract of service.  Further, the orders the Commission may make are restricted to the industrial matter, which gives it jurisdiction if the application was a claim that he had not been allowed a benefit to which he was entitled under his contract of service.

91              I have already given reasons why those authorities are not apposite.  I would add that, for the reasons which I have expressed above, the claim, insofar as it was restricted to a claim for the value of the shares to be transferred direct or after exercise of an option, was not a claim for compensation, but a claim for benefits as a claim in lieu of specific performance, or for the value of the benefits.

92              This case, too, it was submitted by the appellant, was different from Welsh v Hills (FB) (op cit) and Perth Finishing College Pty Ltd v Watts (FB)(op cit) because those cases were concerned with claims for wages to which the employees were entitled under their contracts of employment.  I am not persuaded that those cases were materially distinguishable.  The claims, except for the claims for lost profit, were claims for benefits, too, arising from and pursuant to the contract of employment, and expressly prescribed by it.

93              An order in lieu of performance is an “industrial matter”, as defined, it was submitted by Mr Lucev on behalf of the respondent.

94              Properly, of course, it was submitted, too, following the approach of Parker J in RGC Mineral Sands Ltd and Another v CMETSWU 80 WAIG 2437 (IAC), when one looks at the language of the definition of “industrial matter”; an order in lieu of “specific performance”, made within the definition of industrial matter, is an “industrial matter”.

95              Further, it was submitted by the respondent that the shares and options are a contractual right vested in Mr Saab and that therefore a right for the purposes of the definition of “industrial matter” under the Act.  I do not think that it is accurate to describe the shares and options as a contractual right vested in Mr Saab.  However, as I have observed, there was a duty or obligation imposed by the contract of employment on the appellant (and it was a condition of the contract) to transfer shares in the appellant to Mr Saab and to transfer other shares upon his exercise of his option to purchase them, by certain dates.  That might have formed part of his remuneration.  Accordingly, there is a right in Mr Saab to those shares and options by virtue of the contract of employment.  They are the subject of an employer’s obligation and an employee’s right under the contract of employment.  An obligation is a duty, too, in terms of the definition of “industrial matter” in s.7 of the Act.

96              Further, as Mr Lucev submitted, the shares and options are part of the “remuneration” provided for by the contract of employment (see Capewell v Cadbury Schweppes Australia Ltd (FB)(op cit).

97              Further, they are “prices to be paid in respect of [their] employment”, within the meaning of the definition of “industrial matter” in s.7 of the Act.

98              This claim for a sum of money “in lieu of specific performance” is a claim relating to the rights of Mr Saab and the duties of the employer, for remuneration, and for the price to be paid in respect of employment, as defined.  Thus, the subject matter of the claim is a matter relating to the right or duties of an employer and an employee in an “industry”, as defined, and to the remuneration of an employee or the price to be paid in respect of his employment, and expressly under his contract of employment.  All of these, too, were directly contained in a contract of employment which provided the relevant mutuality between employer and employee, insofar as that was a requirement.

99              In my opinion, Rosser v Donges [1990] 1 Qd R 490 treats the phrase “relating to”, as it appears in the definition of “industrial matter” in s.7 of the Act, too narrowly.  The term “industrial matter” is and always has been interpreted to confer a wide jurisdiction on the Commission to enable it, inter alia, to expeditiously resolve disputes, in accordance with the Act, read as a whole and the objects contained in s.6(a), (b) and (c) of the Act.  I agree with and respectfully apply the dicta in R v Deputy Public Service Arbitrator and Others; Ex parte Administrative and Clerical Officers’ Association and Another (1978) 19 ALR 464 and in Fountain and Another v Alexander and Another 150 CLR 615; and Commissioner of Inland Revenue v Maple & Co (Paris) Limited [1908] AC 22, that the phrase “relating to” requires no more than a connection with the subject matter which is not remote or tenuous and also that the phrase signifies great width of association and ought not to be read down without a compelling reason.

100           In this case, even if “relating to” were given a restricted meaning, the claim in this matter clearly, unequivocally and directly “relates to” the rights, duties, remuneration and the price of employment “in an industry” of an “employer” and an “employee”, as defined in s.7 of the Act.  The claim and the matter before the Commission at first instance plainly and without doubt relates to an “industrial matter”, as defined, pursuant to Mr Saab’s contract of employment and as part of his remuneration.  Mr Saab was entitled as a right to the shares derived directly or by option, and the appellant employer was required to transfer property in them as an obligation under the contract.

101           Further, this was, for the reasons which I have expressed, an industrial matter because it was a matter within s.7(1a) and s.29(1)(b)(ii) of the Act, relating to the refusal or failure of an employer to allow an employee a benefit under his contract of service.

102           It was submitted, however, by Mr Le Miere QC on behalf of the appellant, that this was not a matter relating to an industrial matter because the claim was one for compensation or damages for failure to allow an employee a benefit under the contract of service.  Thus, characterised, the matter is not and was not an industrial matter, because s.7(1a) of the Act does not provide that an industrial matter includes a claim for compensation or damages.  It is restricted to the employee’s rights and does not empower the award of compensation at large.

103           I am not of opinion that either Pepler’s Case or Sakal v T O’Connor & Sons Pty Ltd (IAC)(op cit) supports that proposition.  Both cases were authority for the proposition that compensation is not awardable in claims of unfair dismissals and, in particular, where no reinstatement was ordered after the contract of employment had ended.  They are not authority for the proposition that a claim for a contractual benefit, to which the claimant was entitled and which entitlement was denied, cannot be met by an order that the contract be performed or that the value of the benefit be paid, if an order for performance is not made.

104           This was not a claim for compensation, but a claim for a benefit.  It was an “industrial matter”.

105           Insofar as the denial of the benefit occurred as at the termination of the employment, and subject to unequivocal credible evidence that the option would have been exercised but for that act, the value of the shares transferable pursuant to that option at the times prescribed is a proper expression of the benefit and its value; and there is jurisdiction to so order.

106           The claim, however, for a lost opportunity in not being able to sell the shares, whether the subject of the option or not, was not a claim for a contractual benefit, nor was it a claim in relation to an industrial matter, as I have said.  Such a claim is properly characterised as a claim for damages for breach of contract.  Such a claim relates to a matter which does not relate to rights, privileges or duties, etc. arising out of the contract of employment and employment relationship, as such, within the meaning of the definition of “industrial matter” in s.7 of the Act (see RGC Mineral Sands Ltd and Another v CMETSWU 80 WAIG 2437 (IAC)).  It was a claim for damages based on a breach of contract.

CONCLUSION

107           The claim made and the orders sought, save and except the claim for lost opportunity to realise the value of the shares or otherwise or dispose of them at a profit, were an industrial matter and were a claim for contractual benefits, within the power conferred by s.29(1)(b)(ii) of the Act.  They were also within jurisdiction.

108           I would emphasise that the case is now one to be determined on the evidence and it is for the appellant to establish the value of the shares as a benefit denied.  Particular 4, the last two paragraphs, Particular 5 and Particular 6, in part, of the Particulars of Claim offend in this respect and will require amendment in compliance with these reasons.

109           I would uphold the appeal, insofar as it relates to the claim for compensation or damages for lost opportunity, or damages at all, or for inability to realise the value of the shares, and vary the order accordingly.  I would otherwise dismiss the appeal.

COMMISSIONER J H SMITH:

110           The relevant facts and the grounds of appeal are set out in the President’s reasons for decision.

The contractual obligations

111           Clause 4 of Mr Saab’s contract of employment is set out in the Commissioner’s reasons for decision as follows:

  “On commencement of your employment, you will be issued with 3,500,000 fully paid ordinary shares in the capital of HotCopper at an issue price of $0.0001 per share.  These shares will be the subject of a call option in favour of Mr Ron Mr Gully (sic).  The option will expire 16 February 2003.  The option may only be exercised if there is a unanimous resolution of the Board that, in the reasonable opinion of the Board, you have been negligent and incompetent in your employment as Chief Executive Officer of HotCopper.

  Within 5 business days of your acceptance of the terms and conditions of this letter you will also be issued with the following options to purchase fully paid ordinary shares in the capital of HotCopper.

The nature of the remedy sought

112           The central issue in this appeal is whether the Commission has jurisdiction to make an order that the HotCopper Australia Ltd pay Mr Saab a sum of money equal to the value of the shares and options, in circumstances where the Commission was unable to make an order that shares be transferred and the options be issued to Mr Saab. The Commissioner had earlier determined in reasons for decision given on 7 June 2000, that to order the shares be transferred and the options be granted would compel HotCopper Australia Ltd to breach its constitution and the rules of the Australian Stock Exchange.

113           The matter raises the issue whether the relief sought in paragraphs 4, 5 and 6 of the particulars filed on behalf of Mr Saab on 3 November 2000 is within the jurisdiction of the Commission.  The relevant paragraphs of the particulars are set out in the President’s reasons.  When regard is had to those particulars it is apparent that the claims made on behalf of Mr Saab can in each case be characterised as a loss of a chance that results from the failure to transfer the shares and grant the options.  Clauses 4 of the particulars claims a sum of money equal to the “loss of the benefit” of the shares based on the highest listing price or market value of the shares of HotCopper Australia Ltd on specified dates.  Clause 5 of the particulars claims a sum of money equal to the opportunity lost by Mr Saab of entering the market, exercising the options and realising the value (presumably by selling the shares) during the exercise period (from 9 March 1999 to 9 March 2003).  Accordingly Mr Saab seeks an order requiring HotCopper Australia Ltd to pay him a sum of money for the shares and another sum for the options after the Commission has assessed the value of the shares and options.  In assessing the value of the shares and options the Commission is required to apply the common law principles of assessment of damages by assessing the value of the lost opportunity or commercial advantage to sell the shares at specified dates. 

114           Where a contract provides a chance and a breach of contract results in the loss of a chance, the common law does not permit difficulties of estimating the loss in money to defeat an award in damages.  The damages are ascertained by reference to the degree of probabilities, or possibilities, inherent in the claimant succeeding had the claimant been given the chance which the contract promised (Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 per Mason CJ, Dawson, Toohey and Gaudron JJ at 349).

115           The process of assessing damages for lost opportunities was explained by Brennan J in The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 102-103:

  “In evaluating a plaintiff’s benefits under a contract, the court does not look solely at the express terms of the contract but evaluates the plaintiff’s rights to benefits of any kind, whether those benefits are expressed by the terms of the contract or are ascertainable by reference to circumstances extrinsic to those terms.  Thus a hairdresser's assistant who was wrongfully dismissed was held entitled to recover not only damages for lost wages but also a sum representing the tips which he would have received (87), and an artist’s opportunity of gaining fame and reputation by performing a theatrical engagement must be evaluated in assessing damages when the engagement is wrongfully terminated (88).  In cases of this kind, the contract is found to contain by implication a promise to give the plaintiff an opportunity to acquire the unexpressed benefit (89), and damages are awarded for breach of that promise.  They are not awarded in respect of benefits which the plaintiff has no contractual right to receive (90).

  Unexpressed benefits are frequently of an intangible kind or are otherwise of uncertain value but difficulty in evaluating a contractual benefit is no barrier to recovery of damages where the defendant is bound to provide the benefit but has failed to do so (91).  Their Honours observed that “if the contract had been performed, the plaintiff would have had a real chance of winning the prize, and it seems proper enough to say that that chance was worth something”.  In Fink v Fink (92), Dixon and McTiernan JJ said:

“Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages.”

When a commercial contract is breached, it would be erroneous to evaluate the benefits which a plaintiff would have been entitled to receive had the contract been performed by reference solely to the stipulated remuneration for performance if the plaintiff is entitled to acquire, by performance of the contract, other commercial advantages.  The hairdresser's assistant in Manubens v Leon was contractually entitled to be employed and it would not have been full compensation for his loss of employment to give him his wages without giving him his tips.  An evaluation limited to benefits expressly stipulated would not truly reflect the situation in which the plaintiff would have been if the contract had been performed, nor would it lead to an award of damages which would place the plaintiff in that situation.  The other commercial advantages must be evaluated, and evaluation may require consideration of the nature of the plaintiff’s business, the opportunities available to the plaintiff to exploit the advantage and, if there be a market for a particular advantage, that market.”

Whether the claims are within jurisdiction

116           In the decision the subject of this appeal, the Commissioner held that Mr Saab’s claim that he has been denied a sum of money equal to the value of the benefit of shares and option is a matter the Commission has jurisdiction and power to deal with as an industrial matter under s.29(1)(b)(ii) of the Industrial Relations Act 1979 (“the Act”).

117           Section 29(1)(b)(ii) of the Act provides:

  “(1) An industrial matter may be referred to the Commission

   …

   (b) in the case of a claim by an employee — 

    …

    (ii) that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of service,

   by the employee.”

118           Section 7(1) of the Act defines an “industrial matter” to mean inter alia:

“… subject to Section 7C, any matter affecting or relating to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter relating to —

(a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment;”

119           Whether the orders sought are within jurisdiction depends upon the construction of the terms of the specific contract.  The question whether Mr Saab's claim for a sum of money equal to the value of the shares and options can be dealt with by the Commission, turns on whether the claim can be characterised as an entitlement to a benefit under a contract of service, that is whether the nature of the contractual obligations invoke the Commission’s jurisdiction to make the orders sought.  Prima facie, the benefits to which Mr Saab was expressly entitled to, were the shares and the right to be issued with the options to purchase shares. 

120           For the reasons expressed by the President, when regard is had to the principal objects of the Act in s.6(b) and s.6(c), and to the definition of industrial matter in s.7(1), s.7(1a), s.23(1), s.26(1)(a), s.26(1)(c) and s.26(2) of the Act, I agree that a generous or liberal interpretation should be applied to s.29(1)(b)(ii) of the Act.  Claims under s.29(1)(b) of the Act do not extend to all contractual obligations but to a “benefit”.  The word “benefit” is very wide.  In Balfour v Travelstrength Limited (1980) 60 WAIG 1015 at 1015 Johnson C observed:

“… the word “benefit” ought to be wide enough to allow an employee to bring to the Commission a matter in which the employee believes he has been deprived of some advantage, entitlement, right, superiority, favour, good or perquisite by the action of the employer in contravention of a provision of the contract of service.”

121           The nature of shares and options to purchase shares is that shares are a form of property, which are accompanied by a bundle of rights and obligations.  To acquire the shares in HotCopper Australia Ltd is a right to a specified amount of the share capital of the company which carries certain rights and liabilities, including the right to sell the shares.  In my view, part and parcel of the "benefit" in is the right to not only have the property transferred, namely the shares and exercise the options to purchase shares, but also any advantage that accrues from the shares and options.  This includes the right to sell the shares, as that advantage is part of the entire bundle of rights that accrue to the property.  In this case the benefit to which Mr Saab is entitled under his contract of service includes not only a claim for an order for shares to be transferred and for options to be granted but also includes an order for the value of the shares and options that are valued as lost opportunities to sell. 

122           Alternatively, it is my view that the Commission having found that Mr Saab was entitled to benefits of the contract with respect to the shares and options but that to make an order for specific performance would be unlawful, the matter is within the jurisdiction of the Commission, as the Commission has a matter before it which can be characterised as benefits to which Mr Saab is entitled.  As the matter is within jurisdiction, the Commission is empowered to exercise its discretion to make the orders sought under s.26(1)(a) and s.26(2)of the Act.  Section 26(1)(a) provides:

  “(1) In the exercise of its jurisdiction under this Act the Commission — 

   (a) shall act according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms;”

123           Section 26(2) provides:

“(2) In granting relief or redress under this Act the Commission is not restricted to the specific claim made or to the subject matter of the claim.”

124           The nature and extent of the Commission’s jurisdiction under s.29(1)(b)(ii) and s.26 of the Act was considered by the Full Bench in Welsh v Hills (1982) 62 WAIG 2708 where the Commission observed at 2709 that:

  “… where a claim under s.29(2)(b) is established the Commission is empowered by s.23 to enquire into and make an order relating to such matter, in the exercise of its discretionary judgement, in accordance with the provisions of s.26 and in granting relief or redress the Commission is not restricted to the specific claim made or to the subject matter of the claim but of course without going to anything that an individual may not bring to the Commission.  This follows because the matter with which the Commission is dealing in such a case is an industrial matter and where such a matter is referred to the Commission, whether under s.29(1) or by an individual employee, the Commission is empowered to act so as to resolve conflict in respect of the matter referred.  I think therefore there is no reason to doubt that, in a given case the Commission could order an employer to make compensation to an employee in money terms for a benefit to which he was entitled under his contract of service and has not been allowed. … Were that done its purpose and its limitation would be to redress the matter by resolving the conflict in relation to the industrial matter.”

125           The Commission’s duty to act according to equity, good conscience and the substantial merits of the case pursuant to s.26(1)(a) of the Act was considered by the Industrial Appeal Court in Belo Fisheries v Froggett (1983) 63 WAIG 2394.  In that matter, the Commission at first instance found that an employee was entitled to recover a reasonable sum for work done in respect of which payment was not made on the basis of quantum meruit.  Olney J, with whom Brinsden J agreed, held the Commission had not erred in applying the principles that apply to the doctrine of quantum meruit to a claim by an employee that he had been denied a contractual benefit.  At page 2396 Olney J observed:

“Although the Commissioner purported to assess the respondent's entitlement on the basis of quantum meruit his obligation under the Act was of course to “act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms” (see section 26(1)(a)) which is not necessarily the same as awarding the respondent payment calculated on the basis of quantum meruit.  In my opinion the Commissioner did in fact observe the statutory direction I have quoted and this is evidenced by his setting off against the amount that would otherwise have been the respondent’s entitlement of the air fare and a further amount which can only be classified as damages for negligence.”

126           A claim for quantum meruit may be made where a contractual provision is unenforceable.  The basis of a claim for quantum meruit is the concept of unjust enrichment and a claim for restitution (Pavey & Matthews Pty Ltd v Paul (1986) 162 CLR 221).  Whilst the common law principles applying to quantum meruit have no application to this matter, when regard is had to the reasoning applied by the court in Belo Fisheries v Froggett, it follows that:

(i) The Commission in making an order that an employee has been denied a benefit to which he is entitled under a contract of service may have regard to the fact that the parties entered into a contract to transfer shares and grant options to Mr Saab (that is within jurisdiction as benefit under a contract of employment) but cannot be the subject of an order in the nature of specific performance; and

(ii) Having made that finding it is to the Commission to exercise its discretion under s.26(1)(a) and s.26(2) of the Act to make an order requiring HotCopper Australia Ltd to pay a sum or sums of money to Mr Saab, whereby the sums are calculated by the Commission after applying the principles that apply at common law for assessment of damages which would include an assessment of the loss of an opportunity to sell shares at specified dates.

127           For these reasons I would dismiss the appeal.  I observe however that although I have concluded that the Commissioner has not erred in declaring that the Commission has jurisdiction and power to deal with the claim, whether the Commission should make any order sought by Mr Saab in respect of the 3,500,000 shares referred to in the first paragraph of clause 4 of the contract of employment in light of the call option in favour of Mr Ron Gully is a matter that may require consideration by the Commission.

COMMISSIONER S WOOD:

128           I have kindly had the benefit of reading the reasons for decision of his Honour, the President and Commissioner Smith.  I agree that the appeal should be dismissed for the following reasons. 

129           I adopt the reasoning of Commissioner Smith and in doing so would say the following.  I concur with the reasoning expressed by the President that the term “benefit” within s.29(1)(b)(ii) should be given a generous interpretation.  The shares and options claimed are clearly expressed in the contract and Mr Saab is entitled to these under his contract of service.  The shares and options not being a benefit under an award or order.  Similarly, as expressed by the President, to not be able to convert the benefit to a monetary value, as specific performance was conceded to be not possible, would be against the intent of the Act and would lead to the absurdity of a proven but unrecoverable, denied contractual benefit.

130           Likewise I agree with the reasoning of the President, that there is an interesting question, not before the Full Bench, as to whether there was a denial of any benefit by the appellant as opposed to an inability to transfer the shares due to the employer’s constitution or some external rules.

131           The Particulars of Claim as expressed in clauses 4.1 to 4.7, 5 and 6 are all, in my view, best described as a claim for a lost opportunity or lost chance.  However, once the “benefit” that is due under the contract, namely the shares and options, has crossed the jurisdictional threshold then a method for assessing value in accordance with the Commission’s duty under s.26(1)(a) should be determined and exercised.  The remedy sought is no more than a valuation of the benefit.  I observe in particular the reasoning of the Full Bench in Tony Welsh v Laurence Hills (1982) 62 WAIG 2708 @ 2709 that:

 “…where a claim under s.29(2)(b) is established the Commission is empowered by s.23 to enquire into and make an order relating to such matter, in the exercise of its discretionary judgement, in accordance with the provisions of s.26 and in granting relief or redress the Commission is not restricted to the specific claim made or to the subject matter of the claim but of course without going to anything that an individual may not bring to the Commission.”

132           Commissioner Smith in her reasoning refers to the decisions in The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 102-103; and Belo Fisheries v Dennis Terence Froggett (1983) 63 WAIG 2394.  Without reciting again those passages referred to, I follow that approach and adopt her reasoning.

133           Mr Saab is entitled to the monetary value of the benefit if he can establish the value.  Whether Mr Saab can establish a value on the 3,500,000 shares conditioned by a callback option by Mr Ron Gully by 16 February 2003 is another issue, not for the Full Bench.  The difficulty in this matter appears, in part, to relate to the time of transfer of the benefit and hence whether any profit may be derived.  With respect to the options, if the exercise price allows for no profit then there would be no value, and there is no buyback by the employer specified in the contract.  That is a matter for further evidence before the Commission. It is not a matter for this appeal.

THE PRESIDENT:

134           For those reasons, the appeal is dismissed.

Order accordingly