Beattie v Digga Excavations and Demolition Pty Ltd
[2023] FedCFamC2G 337
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Beattie v Digga Excavations and Demolition Pty Ltd [2023] FedCFamC2G 337
File number(s): MLG 2035 of 2022 Judgment of: JUDGE MANSINI Date of judgment: 8 May 2023 Catchwords: INDUSTRIAL LAW – application for an interlocutory injunction in the nature of an anti-suit injunction.
Where applicant was formerly employed by the respondent company and dismissed by reason of serious misconduct involving transfer of confidential information and intellectual property to competitors – applicant commenced proceeding in this Court, including for payment of alleged statutory and contractual entitlements to notice of termination arising in the course of employment (“first proceeding”) – respondent company defended the first proceeding, including in reliance on alleged serious misconduct as justification for termination without notice pay, and simultaneously made application to County Court of Victoria in connection with same subject matter but as against the applicant and a third party (“second proceeding”) – applicant sought interlocutory relief preventing the respondent company from taking steps in the second proceeding pending resolution of the first proceeding.
Where power of this Court to grant interlocutory relief to restrain the respondent from taking steps in the second proceeding in relation to the applicant is not disputed but the exercise of such power is opposed – whether Court empowered to restrain pursuit of second proceeding in relation to the third party – consideration of factors to be considered in determining whether interlocutory relief ought to be given.
Findings that it is in the interests of justice that the first proceeding be determined before the second proceeding – exercise of discretion – injunctive relief granted in part.
Legislation: County Court Act 1958 (Vic) s.78A
Fair Work Act 2009 (Cth) ss.323, 566, 567, 568, 570
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss.10, 140
Federal Court of Australia Act 1976 (Cth)s.43
Cases cited: Allstate Life Insurance Co v ANZ Banking Group Ltd [No 2] (1996) 64 FCR 44
Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council [2006] HCA 27
CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Fencott v Muller (1983) 152 CLR 570
Jackson v Sterling Industries (1987) 162 CLR 612
Mahmood v Chohan [2021] FCA 973
Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20
National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209
Palmer v Ayres [2017] HCA 5
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1
Pegasus Leasing Limited v Cadoroll Pty Limited (1996) 59 FCR 152
Pioneer Concrete(Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460
Re Wakim Ex Parte McNally [1999] HCA 27
Sahni & Kamdar [2018] FCCA 937
“An Introduction to the Jurisdiction of the Federal Court of Australia” by Chief Justice Allsop (dated 1 October 2007)
Division: Division 2 General Federal Law Number of paragraphs: 44 Date of hearing: 29 March 2023 & 18 April 2023 Place: Melbourne Counsel for the Applicant: Mr J Fetter Solicitor for the Applicant: Stal Employment Lawyers Counsel for the Respondent: Mr J Levine Solicitor for the Respondent: Matrix Legal ORDERS
MLG 2035 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: LEIGH MCGREGOR BEATTIE
ApplicantAND: DIGGA EXCAVATIONS AND DEMOLITION PTY LTD
Respondent
order made by:
JUDGE MANSINI
DATE OF ORDER:
8 May 2023
THE COURT ORDERS THAT:
1.The Respondent be restrained from taking any steps in proceedings CI-22-04390 in the County Court of Victoria.
2.The Respondent have leave to file any cross claim and related interlocutory application within 28 days of these orders.
3.Costs be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE MANSINI
IN SUMMARY
This is an interlocutory application for relief in the nature of an anti-suit injunction.
The Applicant to this matter, Mr Leigh McGregor Beattie, was employed by the respondent (Company), initially as a casual labourer and then as a full-time operations manager. The employment came to an end by reason of serious misconduct. More specifically, the termination letter cited Mr Beattie’s actions in transferring Company information and intellectual property to gain personal profit or advantage to which Mr Beattie was not entitled.
The substantive matter before this Court is Mr Beattie’s claim in the Fair Work jurisdiction for payment of alleged: statutory entitlements to annual leave and notice of termination and an implied contractual entitlement to reasonable notice on termination (the first proceeding). Mr Beattie seeks relief in the form of pecuniary penalties for the alleged contraventions, compensation and damages.
The Company filed a defence to the substantive claim in the first proceeding which, among other things, alleged that Mr Beattie engaged in serious misconduct which justified termination without payment of notice.
The Company simultaneously filed a writ in the County Court of Victoria in which Mr Beattie and a Ms Deborah Piccolo (an alleged competitor of the Company) are named defendants (the second proceeding). In the second proceeding it is alleged that: Mr Beattie disclosed confidential information and intellectual property to Ms Piccolo during the course of the employment, in breach of his contract of employment; and as against Ms Piccolo, that she conspired with Mr Beattie to deprive the Company of its intellectual property and to conceal such unlawful acts and the resulting proceeds from the Company. The Company seeks compensation and damages.
By this application, Mr Beattie seeks interlocutory relief in the nature of an anti-suit injunction to restrain the Company from taking any steps in the second proceeding. In summary, on the ground(s) that the second proceeding is vexatious and oppressive and it is not in the interests of justice that it continues in parallel with the first proceeding. Ms Piccolo indicated her support of that position.
The Company opposed any kind of injunction essentially because the second proceeding is different, there are two parties to it and something more to be gained by it. The Company further said, without reference to any authority, that this Court is not empowered: to restrain the Company from pursuit of the second proceeding as it relates to Ms Piccolo as she is not a party to the first proceeding that is before this Court; and/or to restrain Ms Piccolo from taking steps in the second proceeding.
For the reasons that follow, I have determined to grant relief in the nature of an anti-suit injunction to restrain the Company from taking any further steps in the second proceeding in relation to Mr Beattie.
PROCEDURAL CONTEXT
On 6 September 2022, Mr Beattie filed his initiating application in the Fair Work jurisdiction of this Court.
On 18 October 2022, the Company filed its defence.
Also on 18 October 2022, the Company filed a writ in the County Court of Victoria against Mr Beattie and Ms Piccolo (in CI-22-04390, earlier defined as the second proceeding). At the time of these reasons, the Company had not filed further and better particulars of its defence in accordance with those orders or at all.
On 26 October 2022, orders were made in this first proceeding requiring the Company to file and serve further particulars in support of its defence by 13 November 2022.
On 25 January 2023, Mr Beattie filed this interlocutory application. By the interlocutory application, Mr Beattie sought an order for a stay of the second proceeding as it relates to Mr Beattie.
On 31 January 2023, a procedural mention was held. The parties declined the opportunity to attempt to resolve the matters between them by independent mediation prior to a determination of this interlocutory application and a program was fixed for filing of materials in relation to the interlocutory issue.
At the first interlocutory hearing on 29 March 2023, both parties were represented by Counsel. Mr Beattie sought to amend the form of injunction as to “restrain the Respondent from taking any steps in proceeding CI-22-04390 in the County Court of Victoria”, essentially to stay the second proceeding in its entirety including as relates to Ms Piccolo. The matter was adjourned on that day so that Ms Piccolo (who had not at that time been served with the originating materials in the second proceeding to which she is a defendant) could be notified of these proceedings (to which she is not a party) and invited to address the Court about this interlocutory application at a further hearing on 18 April 2023 which was fixed for that purpose.
On 13 April 2023, my chambers received an email from “Deborah Piccolo” which essentially conveyed the writer’s support of Mr Beattie’s position in the interlocutory application for “a stay of the County Court proceedings”. That email acknowledged the hearing listed on 18 April 2023 and invited chambers to be in contact directly if further information was required.
On the morning of 18 April 2023, the solicitor for Mr Beattie sent an email to my chambers which attached a letter of same date from a lawyer who confirmed their instructions to act on behalf of Ms Piccolo in relation to the second proceeding. In that letter, the lawyer outlined a number of objections to the second proceeding as it relates (or purports to relate) to Ms Piccolo including: that the second proceeding was not served in accordance with the procedural requirements of that jurisdiction; that the named second defendant is a business name that is not registered to Ms Piccolo; and the Company has failed to properly identify a potential defendant. The letter included a statement that “..it is not clear why you have added the Second Defendant to these proceedings given it is the First Defendant you had previously contracted with” and further alleged that the pleadings in the second proceeding do not disclose a valid cause of action against Ms Piccolo, are frivolous and vexatious, an embarrassment, defective, misconstrued and an abuse of process.
In reply, also on the morning of 18 April 2023 and just prior to the commencement of the hearing on that day, my chambers was provided with an email from the lawyer for the Company which asserted the matters raised in the letter of Ms Piccolo’s lawyer was a “pleadings issue”, amendments of which would be dealt with in the second proceeding and further said:
..for all intents and purposes (Ms Piccolo) is and will continue to be in that proceeding irrespective of the trust constitution are my current instructions. The business NOT sued directly in the County Court hence the main argument is mute in my view.
(sic.)
At the further interlocutory hearing on 18 April 2023, Mr Beattie was represented by a lawyer and the Company was represented by Counsel. There was no appearance by or on behalf of Ms Piccolo. The lawyer for Mr Beattie handed up an amended form of words for the injunction sought (outlined below).
After the further interlocutory hearing and also on 18 April 2023, Mr Beattie’s lawyer sent an email to my chambers which stated:
We are instructed to offer the Court an undertaking on behalf of the Applicant, as to damages incurred by the Respondent, in the event the Court grants the anti-suit order (in so far as the order applies to our client, Leigh Beattie), and in the event it is found that the anti-suit order ought not have been made.
STATUTORY AND LEGAL FRAMEWORK
Power to grant an anti-suit injunction
This Court has a broad statutory power to make orders of such kinds as the Court considers appropriate in relation to matters in which it has jurisdiction: s.140 of the Federal Circuit and Family Court of Australia Act 2021 (FCFCOA Act). Such orders may include an injunction in the nature of an anti-suit injunction, not being excluded as a remedy under the Fair Work Act 2009 (Cth) (FW Act): ss.567(b) and 568 of the FW Act, Sahni & Kamdar [2018] FCCA 937 and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 (Patrick Stevedores). There is also an equitable jurisdiction to grant an injunction in the nature of an anti-suit injunction: s.10(1)(b) of the FCFCOA Act.
A statutory anti-suit injunction lies to protect the administration of justice and the Court’s own processes, the Court gaining exclusive right to control the proceeding once a claim is brought before it: CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 and Pioneer Concrete(Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460. Such remedy in the equitable jurisdiction also lies to restrain the vexatious, oppressive, unconscionable or unconscientious exercise of legal rights and conduct which tends to interfere with due process of the court: National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209.
It is established on the authorities that the interests of justice are the paramount consideration: Pegasus Leasing Limited v Cadoroll Pty Limited (1996) 59 FCR 152 at [156]:
Foreign proceedings may be restrained, not only when they are vexatious, in the sense of frivolous or useless, but also where they are oppressive. However, vexation or oppression should not be regarded as the only grounds on which the jurisdiction is to be exercised. See Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 at 894. … The fundamental requirement is that an injunction will be granted only where the interests of justice so require.
In the context of an application for an anti-suit injunction, the focus is on the “foreign” proceedings, and whether those proceedings are vexatious or oppressive from the forum perspective. More precisely, the focus is on the conduct of the party pursuing the foreign proceedings, and the impact on the other litigant: Allstate Life Insurance Co v ANZ Banking Group Ltd (No 2) (1996) 64 FCR 44 at [52].
The power to exercise broad discretion is restricted to the making of the kinds of order, whether final or interlocutory, which are capable of properly being seen as appropriate in the exercise of its jurisdiction. If an order has the effect, or may have the effect, of preventing or mitigating the harm that will or may be suffered by an applicant as a result of alleged wrongdoing of a particular person, it is an “appropriate” order in this sense. The power to grant an injunction does not support the making of an order which goes beyond what is in reasonable protection of a legal and equitable right which the court may enforce by judgment: Patrick Stevedores at [176]; Jackson v Sterling Industries (1987) 162 CLR 612.
Jurisdiction
Relevant to the arguments raised by the parties are matters that go to the breadth of the jurisdiction of this Court to hear and determine the relevant controversy as between the parties and as to any differences in the treatment of costs in the two proceedings.
Section 566 of the FW Act confers jurisdiction on this Court in relation to any civil “matter” arising under the FW Act. For the purposes of s.566, the identification of a “matter” proceeds by reference to principles upon which federal jurisdiction is engaged under the Constitution. The applicable principles were restated by the plurality in Palmer v Ayres [2017] HCA 5 at [26]-[27]. For example, a claim for the underpayment of employee entitlements pursuant to s.323 of the FW Act will attract the accrued jurisdiction of this Court to hear and determine a breach of contract claim: Mahmood v Chohan [2021] FCA 973.
In considering whether a matter is within the accrued jurisdiction of the court, the High Court of Australia in Fencott v Muller (1983) 152 CLR 570 (Fencott) at [34] stated:
the question … is whether the claim under the relevant federal law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the court vested with jurisdiction in matters arising under that law.
In Re Wakim Ex Parte McNally [1999] HCA 27, the Court found that accrued disputes must have one common substratum of individual facts and that the determination of one dispute is essential to the determination of the other. Hayne J said in Re Wakim at [139]:
The central task is to identify the justiciable controversy. In civil proceedings, that will ordinarily require a close attention to the pleadings (if any) and to the factual basis of each claim.
The Court will commonly, as here, have limited information on which to make this assessment of accrued jurisdiction: “An Introduction to the Jurisdiction of the Federal Court of Australia” by Chief Justice Allsop (dated 1 October 2007); Re Wakim at [585]-[586]; CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345; Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council [2006] HCA 27.
In relation to costs, typically a claim in the Fair Work jurisdiction of this Court is subject of a statutory limitation on the otherwise broad discretion to award costs: see s.570 of the FW Act and s.43 of the Federal Court of Australia Act 1976 (Cth) cf. s.78A of the County Court Act 1958 (Vic). A claim in another jurisdiction will invoke s.570 of the FW Act where there is a single proceeding, with claims made under the FW Act and at common law: Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20 (Melbourne Stadiums).
CONSIDERATION
The Company properly accepted that this Court can grant an anti-suit injunction to restrain other proceedings no matter where they are brought: in order to prevent its processes being abused; because another proceeding has the capacity to interfere with this Court’s proceedings; and/or to prevent the unconscionable or unconscientious exercise of legal rights. And that it has the broad discretionary power to do so if it were satisfied that the two proceedings are part of the same substratum of fact and therefore the same justiciable controversy in the Re Wakim sense.
However, the Company emphasised that even in the case of multiple, parallel proceedings concerning the same subject matter, a proceeding would only be restrained where there is nothing to be gained from it. The Company did not accept that this was such a case – not least because there is a difference to the approach on costs and therefore an advantage to be gained by the second proceeding and it would be a rare case where such restraint extended to a third party.
In the present case, there was no issue taken and I am satisfied that the requisite jurisdiction to determine Mr Beattie’s substantive claim in the first proceeding exists.
It falls then to consider what the interests of justice require and whether to exercise the discretion. By way of preliminary observation, this interlocutory judgment proceeds on what can be ascertained having regard to the substance of the pleadings filed to date in this first proceeding and the writ in the second proceeding which is in evidence before this Court. There were some limitations in comprehending the Company’s case because it had (and still has) not complied with Court orders to particularise its defence in this proceeding. Nonetheless, it did not appear to be contentious that the basis for the defence in this first proceeding (ie. “serious misconduct” disentitling Mr Beattie to notice pay) was the factual allegation that Mr Beattie had disclosed confidential information and intellectual property to competitors as provided in the termination letter.
On the material before the Court and adopting the undisputed principles from the authorities, the following factors are relevant to consideration of the interests of justice in the present case:
(a)The first proceeding was filed by Mr Beattie in this Court, first in time. The second proceeding was filed by the Company in the County Court of Victoria, some one and a half months later.
(b)The parties to the first proceeding and the second proceeding are not identical in that Ms Piccolo is party only to the second proceeding.
(c)Common parties to the first and second proceedings are, respectively, Mr Beattie and the Company.
(d)The subject matter of the first proceeding and the second proceeding is not identical to the extent that Mr Beattie claims underpayment of annual leave in the first proceeding and otherwise the cause of action and forms of relief are differently expressed.
(e)The subject matter of the first proceeding and the second proceeding is common to the extent that both involve allegations of express and implied breaches of Mr Beattie’s employment contract with the Company. On the limited information presently before this Court, both proceedings require determination of common factual issues, including at least (and perhaps not limited to): the commencement date of Mr Beattie’s relevant employment with the Company; whether there was a written or oral contractual agreement as between Mr Beattie and the Company; the express and implied terms and conditions of Mr Beattie’s employment with the Company; and whether Mr Beattie disclosed the Company’s confidential information and/or intellectual property to a competitor. To the extent there was such disclosure, both proceedings require a finding as to whether such disclosure contravened the terms and conditions of Mr Beattie’s employment.
(f)By the Company’s election to commence the second proceeding in another jurisdiction, Mr Beattie is presently required to litigate the parallel proceedings in two places: this Court and the County Court of Victoria. Having regard to the nature of the claims and that subject matter I have found to be in common, I consider the two claims or proceedings are part of the same substratum of fact as to constitute “a single justiciable controversy” within the meaning of the authorities. It follows that this Court would, through its accrued jurisdiction, have jurisdiction over the whole “matter” in dispute were the Company to bring a cross claim in the first proceeding in the terms of the second proceeding and could also seek to join Ms Piccolo: pursuant to s.566 of the FW Act, see also Fencott. That the Company has not (or at least not yet) elected to do so is a matter for it which is not explained before this Court although, it may be noted, Mr Beattie accepted that the first proceeding would be an appropriate case in which to grant leave to do both (by a particular time). In any event, the opportunity to have both matters dealt with in one jurisdiction is relevant to the consideration of the interests of justice having regard to the established principles.
(g)On the current state of the pleadings, the Company may “gain” a form of relief against Ms Piccolo which is not presently available in the first proceeding because the Company has not elected to apply to file a cross claim in and join Ms Piccolo to the first proceeding.
(h)There is otherwise nothing discernible to be gained by the second proceeding to the extent that I have found it to concern the same subject matter as the first proceeding. There is no basis to find that either jurisdiction would necessarily produce a faster or more efficient result. The approach to costs would, on the authority in Melbourne Stadiums and the above findings as to the common subject matter, appear to attract the application of s.570 of the FW Act to the second proceeding and ameliorate any perceived advantage that the Company held in that respect.
(i)Mr Beattie has, through his lawyers, given an undertaking as to damages incurred by the Company, in the event the Court grants the anti-suit order (so far as the order applied to him), and in the event it is found that the anti-suit order ought not have been made. There is no equivalent undertaking in relation to Ms Piccolo.
Having weighed the relevant factors, I consider that the interests of justice require that the first proceeding be determined before the second proceeding.
It remains for the Court to consider whether this is an appropriate case to exercise the broad discretion to grant an injunction in the nature of an anti-suit injunction on the established principles.
Where a cross claim could and properly should have been brought in the accrued jurisdiction of this Court thereby reducing duplication of proceedings, cost and resources of the parties and the public, it is at the very least unconscientious (if not unconscionable) for the Company to pursue that subject matter in another jurisdiction. The undesirability of parallel proceedings about substantively the same subject matter and the associated cost to the parties and the public in administration of the justice system weigh strongly in favour of the exercise of such discretion. Further, that there is nothing to be gained by the second proceeding as it relates to Mr Beattie is a highly persuasive consideration. The only gain in the second proceeding as it relates to Ms Piccolo arises from the Company’s election to initiate proceedings against her in another forum. I have had regard to the absence of an undertaking as to damages on behalf of Ms Piccolo to the extent that the anti-suit injunction ought not have been made but do not consider this of itself determinative. Taking into account all of the relevant factors, this is an appropriate case to the restrain the Company from pursuit of the second proceeding pending determination of the first proceeding in this Court without distinction as between the defendants to the second proceeding. I will order accordingly. To address the Company’s concern about perceived hurdles in joining Ms Piccolo to the first proceeding, there will also be an order that the Company be allowed a further period in which to file a cross-claim.
There remains the question of whether to exercise the discretion so that Ms Piccolo be so restrained from taking steps in relation to the second proceeding. The Company’s Counsel emphasised the complexity that would arise from an order which restrained only the Company from taking any steps in the second proceeding (without limitation) and did not prevent Ms Piccolo from taking steps (for example, she could apply to have the second proceeding struck out as against her as foreshadowed in her lawyer’s 18 April 2023 letter).
Ms Piccolo is not party to the first proceeding before this Court and declined the opportunity to appear before the Court at the second interlocutory hearing. However, Ms Piccolo availed of the opportunity to inform this Court that she supported Mr Beattie in his interlocutory application for a stay of the proceedings in terms that were without limitation. By the 18 April 2023 correspondence of Ms Piccolo’s lawyers, it is apparent that she may oppose the second proceeding including to seek that it be struck out as against her but had not formally taken any such steps. Whilst ultimately a matter for the other jurisdiction, in circumstances where the Company is restrained from taking any steps in the second proceeding pending determination of the first proceeding, and in light of her position on the stay of the second proceeding as communicated to this Court, it would appear both futile and improper for Ms Piccolo to initiate or seek to pursue applications in the second proceeding.
Without being persuaded that an effective stay of the second proceeding in its entirety is beyond power, I decline to exercise the discretion to make an order in relation to Ms Piccolo.
CONCLUSION
For the above reasons, I am satisfied that it is in the interests of justice and an appropriate case for this Court to exercise the discretion to grant an anti-suit injunction as sought by Mr Beattie.
An order will issue that, until the hearing and determination of the first proceeding or further order of this Court, the Company be restrained from taking steps in relation to the second proceeding. The Company will be afforded leave to file any cross claim and related interlocutory application within 28 days of these orders. The matter of costs will be reserved.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 8 May 2023
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