Case: Lubidineuse v Bevanere Pty Ltd [1984] FCA 252 ; (1984) 55 ALR 273
Outcome: distinguished
In this context, the facts demonstrate that to the extent that the first respondent (through Mr Breed) had knowledge of Mr Burns' views in relation to leaving his employment, at most it was knowledge that Mr Burns was contemplating leaving once the orchards had sold, and that it was likely that he would if he did not receive an attractive offer to stay. I do not consider that Mr Burns had a firm intention to resign in 2004 - that intention crystallised after Mr Burns had met Mr Tracy and formed a view of Mr Tracy. This was made clear during the following exchange: HER HONOUR: I have a question for the witness, Mr Perry. Mr Burns?---Yes. Was the I'm trying to think of a way to put this question. Was it anything to do with Mr Tracy's acquisition of the orchards which caused you to decide to leave?---Yes. Can you tell us what that was?---Simply because the manner in which he - he spoke to me. Like, if - if that - that conversation was obviously a crux, I could have gone either way, but that conversation reinforced that I didn't--- Although you'd already resigned by then--- MR PERRY: He'd already resigned by then. ?---Yes, but I - you can--- HER HONOUR: You can change your mind?---You can still take up employment with someone afterwards. I was still working in the house. Yes, no, the - the - he was too business-like. It was as if there was never going to be any - I don't think he understood the world of farming, and I never want to work under someone who doesn't have an understanding or an empathy of farming. So the people you had worked with, Mr Breed and others, they did understanding farming?---Yes, or--- In your view?---Yes, or they have a feeling and understanding and - yes. Yes. (TS 730-731) (Contrast, for example, the situation in Lubidineuse v Bevanere Pty Ltd [1984] FCA 252 ; (1984) 55 ALR 273 where the relevant employee had planned to leave prior to the sale of the employer's business and had already organised new premises for herself.) 216 While the knowledge of Mr Breed and through him, the first respondent that there was a possibility that Mr Burns might resign after the sale of the properties could have been communicated to Mr Tracy during negotiations to purchase the properties, it is difficult to describe what that communication might have been other than vague information that Mr Burns was considering leaving his employment, but would more likely stay if he endorsed the circumstances of the sale and/or received an attractive offer to stay. 217 Accordingly I do not consider that the applicants' case is substantiated in relation to this claim so far as they allege that Mr Burns had an intention to resign in 2004. In the interests of completeness however, I propose to consider whether the respondents were under an obligation to disclose information to the applicants concerning the possibility that Mr Burns might resign after the sale of the properties. Did the circumstances give rise to an obligation in the respondents to disclose this information to the applicants? 223 Second, notwithstanding Mr Tracy's lack of experience in citrus, there is no evidence before the Court that Mr Burns' resignation would affect Mr Tracy or the other applicants adversely any more than would the resignation of any other employee of the orchards. This is because: &#8226; As Mr Tracy had no experience of citrus, all employees of the respondents at the relevant properties would have had more experience in the citrus industry than him. Although Mr Tracy was prepared to hire the staff already employed by the respondents, negotiations between Mr Strahley and Mr Tracy did not proceed on the basis that all staff (or indeed any staff) would stay rather the contract between the parties provided that the new entity would employ employees nominated by the respondents. I note, and accept the submission of Mr Bell QC during cross-examination, that this was more for the benefit of the employees, whom the first respondent was keen to ensure retained their positions, than Mr Tracy or the applicants (TS 290 ll 11-24) This position can be contrasted with, for example, the events in Lubidineuse v Bevanere Pty Ltd [1984] FCA 252 ; (1984) 55 ALR 273 where negotiations did proceed on that basis. In that case discussions between the vendor and proposed purchaser of a beauty salon proceeded on the basis that all staff of the salon would stay, in particular the senior employee who, after the completion of the sale, resigned and opened her own competing business nearby. Wilcox J found that, on the balance of probabilities, the vendor was aware, prior to the date of contract, that the senior employee intended to resign in the near future and establish a competing business in the near vicinity and that, despite this awareness, the vendor allowed the purchasers to purchase the business in the belief that the senior employee would stay on indefinitely ( Lubidineuse [1984] FCA 252 ; 55 ALR 273 at 283). &#8226; Although it is not in dispute that, prior to Mr Burns' arrival at the orchards, there had been no full-time horticulturalist, and that he had been employed to improve the cultural practices at the orchards with a view to improving the yields (Burns affidavit sworn 11 July 2006 at [32]), there was no evidence that Mr Burns was an employee critical to the business such that he could not be replaced in his role, or that other agricultural consultants available to the business (in particular Mr Owen-Turner and Mr Papacek) could not assist. Mr Tracy regarded Mr Burns as a "so-called expert horticulturalist who was an expert in citrus" however: o the evidence demonstrated that Mr Burns was a relatively recent graduate in horticulture at the time and appeared to have no particular expertise in citrus at the time of his engagement with the first respondent; o Mr Burns' evidence was that another horticulturalist could come later to the property, examine the orchard, recognise the history of the orchards including cultural practices at the orchards and continue the work in the orchards even in the absence of a handover of duties (TS 683 ll 1-15). Again, the role of Mr Burns can be contrasted with that of the senior employee in Lubidineuse v Bevanere Pty Ltd [1984] FCA 252 ; (1984) 55 ALR 273 whose primary role was one of client liaison and customer support, whose knowledge was important in securing the smooth transfer of customer goodwill to the new owners, and whose establishment of a new business resulted in the defection of customers and undermining of the business the subject of the sale. 224 Third, as emerged during cross-examination, Mr Tracy gave evidence that he was told by Mr Breed, and believed, that Mr Strahley had known of Mr Burns' intention to resign, and had instructed Mr Breed not to tell Mr Tracy of this intention (TS 261 ll 42-46, 262 ll 1-2). Mr Tracy said that he believed this deliberate concealment "was consistent with the misinformation that had been given or perpetrated upon me through the whole process" (TS 260 ll 18-20). However other than what appears to be a statement in Mr Breed's unsigned statement, which for reasons I have already given is of little evidentiary value, there is no evidence that Mr Strahley ever gave anyone instructions to conceal such information from Mr Tracy, or indeed that he had known of Mr Burns' state of mind prior to February 2005. 225 I do not find the claim of the applicants in para 17A(a) substantiated.