TANAKA v. TOKYO NETWORK COMPUTING P/L [2003] NSWSC 1114

TANAKA v. TOKYO NETWORK COMPUTING P/L [2003] NSWSC 1114

The board resolution to reduce Mr Tanaka’s salary, passed without his consent and not shown to be conditional, was objectively a fundamental and anticipatory breach of his employment contract. The plaintiff validly accepted repudiation and was entitled to damages for loss of employment and to exercise the Early Put Option for sale of his shares under the Share Sale Agreement. His termination did not amount to resignation, and the contractual conditions for exercising the Put Option were satisfied.

Jurisdiction
Australia
Judgment Date
11 December 2003
Procedural Posture
Equity / Final Judgment
Outcome
Judgment for the plaintiff
Legal Topics
['repudiation of Contract' 'anticipatory Breach' 'employment Termination' 'damages' 'specific Performance' 'share Sale Options']
['contract Law' 'employment Law' 'equity'] ['repudiation of Contract' 'anticipatory Breach' 'employment Termination' 'damages' 'specific Performance' 'share Sale Options']

Case Brief

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Procedural Posture

Equity / Final Judgment

Legal Issues

  1. 1 ['Whether the board resolution to reduce plaintiff’s salary constituted repudiation of the employment contract' 'Whether acceptance of repudiation by the plaintiff entitled him to exercise the Early Put Option under the Share Sale Agreement' 'Calculation and entitlement of damages for breach of contract' 'Whether plaintiff’s termination amounted to resignation under the agreements']

Ratio Decidendi

The board resolution to reduce Mr Tanaka’s salary, passed without his consent and not shown to be conditional, was objectively a fundamental and anticipatory breach of his employment contract. The plaintiff validly accepted repudiation and was entitled to damages for loss of employment and to exercise the Early Put Option for sale of his shares under the Share Sale Agreement. His termination did not amount to resignation, and the contractual conditions for exercising the Put Option were satisfied.

Court Disposition

Judgment for the plaintiff

Orders

  • ['Judgment for plaintiff against the first defendant for damages and interest to be assessed' 'Order for inquiry and certification of damages and interest by a Master; judgment to be entered for the certified amounts' 'Declaration of validity and effectiveness of Early Put Option exercise for sale of 49 shares in...