Hermens v Acacia Group Limited [2011] FCA 1286

Hermens v Acacia Group Limited [2011] FCA 1286

The Court held that there was no contract in the terms alleged because the conversations relied on were not accepted in their entirety and, even taken at their highest, were too fleeting and inconclusive to establish a concluded bargain that Acacia would employ Mr Hermens as CEO at $1,000 per week net. The objective records treated payments as drawings against loan accounts, not wages, and contained no ordinary indicia of employment wages. Although Mr Hermens was CEO and performed CEO functions, that did not establish an agreement to pay him $1,000 net per week or any other amount. There was no implied term to pay a reasonable wage because the circumstances indicated the incorporators...

Jurisdiction
Australia
Judgment Date
11 November 2011
Procedural Posture
Application Claiming Back Pay for Alleged Employment Contract, Misleading or Deceptive Conduct, and Repayment of Capital Contributions / Final Judgment
Outcome
Application dismissed; First Applicant ordered to pay the costs of the proceedings.
Legal Topics
['alleged Oral Employment Agreement' 'formation of Contract by Conduct' 'implied Term to Pay Reasonable Wage' 'misleading or Deceptive Conduct Under S 52 of the Trade Practices Act 1974 (cth)' 'company Limited by Guarantee Capital Contributions']
['contract' 'trade Practices' 'employment' 'corporations'] ['alleged Oral Employment Agreement' 'formation of Contract by Conduct' 'implied Term to Pay Reasonable Wage' 'misleading or Deceptive Conduct Under S 52 of the Trade Practices Act 1974 (cth)' 'company Limited by Guarantee Capital Contributions']

Case Brief

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Procedural Posture

Application Claiming Back Pay for Alleged Employment Contract, Misleading or Deceptive Conduct, and Repayment of Capital Contributions / Final Judgment

Legal Issues

  1. 1 ['Whether Acacia employed Mr Hermens as CEO at a wage of $1,000 per week net pursuant to an oral agreement.' 'Whether the conduct of the parties, viewed as a whole, established all essential elements of the alleged bargain.' 'Whether there was an implied agreement that Acacia would pay Mr Hermens a reasonable wage.' 'Whether statements by Mr McCauley amounted to misleading or deceptive conduct for the purposes of s 52 of the Trade Practices Act 1974 (Cth).' 'Whether Mr and Mrs Hermens were entitled to repayment of their $30,000 contribution to Acacia.']

Ratio Decidendi

The Court held that there was no contract in the terms alleged because the conversations relied on were not accepted in their entirety and, even taken at their highest, were too fleeting and inconclusive to establish a concluded bargain that Acacia would employ Mr Hermens as CEO at $1,000 per week net. The objective records treated payments as drawings against loan accounts, not wages, and contained no ordinary indicia of employment wages. Although Mr Hermens was CEO and performed CEO functions, that did not establish an agreement to pay him $1,000 net per week or any other amount. There was no implied term to pay a reasonable wage because the circumstances indicated the incorporators...

Court Disposition

Application dismissed; First Applicant ordered to pay the costs of the proceedings.

Orders

  • ['The application be dismissed.' 'The First Applicant pay the costs of the proceedings.']