Canavan v Shred-X Pty Ltd

Case [2023] QDC 37

DISTRICT COURT OF QUEENSLAND

CITATION:

Canavan v Shred-X Pty Ltd & Anor [2023] QDC 37

PARTIES:

MARK CANAVAN

(plaintiff)

v

SHRED-X PTY LTD  
ACN 123 767 153

(first defendant)

and

EVANGELOS KARATHANSOPOULOS
(second defendant)

FILE NO/S:

1988/2022

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

Brisbane District Court

DELIVERED ON:

15 March 2023

DELIVERED AT:

Brisbane

HEARING DATE:

26 September 2022. Further written submissions received 30 January 2023.

JUDGE:

Byrne KC DCJ

ORDERS:

1.     Paragraphs 17 to 21 of the statement of claim filed 17 August 2022 be struck out.

2.     The plaintiff has leave to replead within 28 days of the date of this Order.

3.     No order as to costs.

4.     Liberty to apply on two days’ written notice.

CATCHWORDS:

APPLICATION TO STRIKE OUT PARAGRAPHS OF STATEMENT OF CLAIM – PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – GENERALLY – COSTS – facts not contained in the statement of claim – when a reply will be considered as part of the scope of the matters in contest – striking out paragraphs of a statement of claim – pleading of matters in the Reply that should have been in the SOC –where there is no requirement for the defendants to respond to the Reply – no order as to costs – costs regulated by s 570 of the Fair Work Act

LEGISLATION:

Uniform Civil Procedure Rules 1999, r 149, r 164, r 169, r 171, r 367, r 476

Fair Work Act 2009 (Cth) s 117, 570

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)

CASES:

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Kirby v Sanderson Motors Pty Ltd [2002] NSWCA 44
Mio Art Pty Ltd v Macequest Pty Ltd [2013] QSC 211
Morrison v Australian Postal Corporation [2001] QDC 301
New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68
Orchid Avenue Pty Ltd v Parniczky & Anor [2015] QSC 207

Stowe v Johnson [2018] QSC 278

COUNSEL:

Mr. A.C. Harding for the plaintiff.

Mr. B.W.J. Kidston for the defendant.

SOLICITORS:

Wotton Kearney for the plaintiff.

Thomson Geer for the defendant.

Introduction

  1. The defendants apply, pursuant to r 171(1)(a) of the UCPR, to strike out paragraphs 17 to 21 inclusive, and the associated paragraph of the prayer for relief, in the Statement of Claim (“SOC”) filed on 17 August 2021.  The application is opposed. 

    Background

  2. In essence, the proceedings arise out of the termination of the plaintiff’s employment by the first defendant.  The second defendant is the general manager of the first defendant.  The extent of his control of the first defendant is in dispute. 

  3. The plaintiff’s claim seeks various declarations for contraventions of the Fair Work Act 2009 (Cth) (“FW Act”), orders for pecuniary penalties under the FW Act, orders for compensation under the FW Act and, relevantly, damages for breach of contract.

  4. The plaintiff was employed by the first…

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Details
AGLC
Canavan v Shred-X Pty Ltd [2023] QDC 37
Case
[2023] QDC 37
Decision Date

CaseChat Overview and Summary

In Canavan v Shred-X Pty Ltd, the defendants sought to strike out specific paragraphs of the Statement of Claim filed by the plaintiff on the basis that they were not properly pleaded. The application was contested by the plaintiff, who argued that the reply should be considered alongside the Statement of Claim and the defence to properly understand the issues to be tried. The case hinged on the interpretation of certain clauses in the contract of employment, particularly those concerning the notice period for termination. The defendants contended that the plaintiff should have included certain facts in the Statement of Claim and that the reply should not be considered in determining the application.

The court examined whether the reply should be considered as part of the scope of the matters in contest, considering previous cases where the reply was taken into account in different contexts. It was noted that while there have been instances where the reply has been considered, the current case did not fit neatly into any precedent. The court found that some of the matters raised in the reply, which were not included in the Statement of Claim, were material facts that should have been pleaded in the original pleading. The court acknowledged that the ambiguity in clause 16.1 of the contract necessitated evidence of the surrounding circumstances, but emphasised that certain facts required to be pleaded in the Statement of Claim to avoid a strike out application.

Ultimately, the court accepted that at least some of the matters raised in the reply should have been included in the Statement of Claim. These facts were necessary to understand the plaintiff's assertion that a term concerning reasonable notice of termination should be implied into the contract. The court concluded that the reply should not be considered in the context of this application, leading to the decision to strike out the specified paragraphs of the Statement of Claim. The plaintiff was granted leave to replead within 28 days, and no order was made as to costs.

Orders

Orders of the court

1. Paragraphs 17 to 21 of the statement of claim filed 17 August 2022 be struck out.

2. The plaintiff has leave to replead within 28 days of the date of this Order.

3. No order as to costs.

4. Liberty to apply on two days’ written notice.

Background

Background to the litigation

The defendants apply, pursuant to r 171(1)(a) of the UCPR, to strike out paragraphs 17 to 21 inclusive, and the associated paragraph of the prayer for relief, in the Statement of Claim (“SOC”) filed on 17 August 2021. The application is opposed. Background In essence, the proceedings arise out of the termination of the plaintiff’s employment by the first defendant. The second defendant is the general manager of the first defendant. The extent of his control of the first defendant is in dispute. The plaintiff’s claim seeks various declarations for contraventions of the Fair Work Act 2009 (Cth) (“FW Act”), orders for pecuniary penalties under the FW Act, orders for compensation under the FW Act and, relevantly, damages for breach of contract. The plaintiff was employed by the first defendant in 2019 or 2020 in a particular capacity, but entered into a written contract of employment with the first defendant for an upgraded position on 12 February 2021. His employment was terminated by written notice on 5 July 2022. The plaintiff was entitled to a minimum period of three weeks’ notice pursuant to s 117 of the FW Act, or payment of the equivalent wages for that period. As the termination was expressed to be effective immediately, he received a payment as a consequence of the termination, the details of which are of no moment for the purposes of this application. As an issue in the application is said to be the construction of part of the contract of employment, reference should be made to some of its provisions. Clauses 16.1 and 16.2 of the contract provided:“16.1 … the Employment may be terminated by either Party on the giving of the minimum notice period determined on the period of continuous service according to Fair Work.16.2 The Employer may elect to provide the Employee with payment of the equivalent salary, in part or totally in lieu of notice.” There are other sub-clauses of clause 16 but they need not be reproduced. Clause 36.1(1) of the Contract specifically defined “Act” to mean “the Fair Work Act 2009 (Cth) and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), and their regulations, and includes any amendment to, or replacement of, them.” The term “Fair Work” is not defined for the purposes of the contract. Clause 29 provides for the severability of any provision of the contract that is unenforceable, illegal or void and allows the other clauses to remain in force. Clause 33 is an “entire understanding clause” that purports to state that the whole of the agreement and understanding between the parties is contained in the Contract, and that each party has entered into the Contract without relying on any representation by any other party or person purporting to represent that party. At paragraphs 5 and 6 of the SOC, the plaintiff pleaded reliance on the entire written Contract, but specifically repeated clauses 16.1 and 16.2. In their defence, the defendants referred to clause 33 of the Contract and asserted that clause 16.1 of the Contract allowed the first defendant to terminate the plaintiff’s employment by giving the minimum period of notice as calculated under s 117 of the FW Act. It is uncontentious that the plaintiff was paid the equivalent of the minimum notice period under s 117 of the FW Act.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The plaintiff submits that the purpose of pleadings is to define the issues, and as such the reply needs to be considered alongside the SOC and the defence to understand the issues to be tried. As such the reply should be considered and, when that is done, the factual matrix demonstrates that the allegations at paragraphs 17 – 21 should not be struck out. It is emphasised that the function of the Reply is, when necessary, to answer the facts pleaded in the defence. As such it is submitted that the plaintiff has acted in accordance with the UCPR and the application should be dismissed.Consideration At face value, the meaning of clause 16.1 of the Contract is unclear; the words “Fair Work” create the ambiguity. Both parties’ arguments as to the approach to that issue have some merit, but it is an issue that does not need to be decided. The fact there is ambiguity means that evidence of the surrounding circumstances of the making of the Contract is admissible to assist in the interpretation of it.[5] It is now clear that there are evidential matters available to the plaintiff which may bear on the interpretation of clause 16.1, and which, once pleaded, must necessarily frustrate a strike out application based on r. 171(1)(a), regardless of whether they are accepted or not.[5]Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 352. The defendants contend that these matters should have been pleaded in the SOC as they are material facts. It was argued in anticipation of a reply being filed, and prior to the later submissions from both parties, that even if something were raised in the Reply, the subject paragraphs should be struck out with leave to replead. The plaintiff denied the need to have pleaded the “common understanding” in the SOC and says that it would be appropriately pleaded in the Reply, so the defendants were not taken by surprise. Both parties later submissions have been summarised above. I accept that at least some of the matters raised in the Reply, should have been pleaded in the SOC, although some of the things pleaded in the Reply are likely evidence and hence should not be pleaded in a SOC. The assertion that there is to be implied a term concerning reasonable notice of termination, in the face of an apparently express term covering the period of notice to be given, is the asserted consequence of the matters raised in the Reply. They, or at least some of them, therefore amount to material facts[6] and were required to have been pleaded in the SOC.[7] Put another way, the reason why it is said that a term of reasonable notice should be implied into the contract in the face of clause 16.1 is not apparent without the material facts contained in the Reply being pleaded in the SOC.[6]Mio Art Pty Ltd v Macequest Pty Ltd [2013] QSC 211, [64]; Kirby v Sanderson Motors Pty Ltd [2002] NSWCA 44, [20]-[21].[7]Rule 149(1)(b) of the UCPR. While there have been instances where the Reply has been considered as part of the scope of the matters in contest, each of the examples put before me by the plaintiff has been in a different context. In Orchid Avenue Pty Ltd v Parniczky & Anor[8] Burns J was considering the availability of granting judgment in default of the defendant’s appearance at trial pursuant to r. 476 of the UCPR. Whereas in Morrison v Australian Postal Corporation,[9] McGill DCJ, sitting on appeal from the Magistrates Court, was considering a complaint about the sufficiency of the pleadings to sustain the judgment under appeal in circumstances where there had not been any application below to strike out the pleading in the SOC. His Honour found that the pleading of matters in the Reply that should have been in the SOC was an irregularity rather than rendering the proceeding invalid. He did not endorse the practice and specifically referred to the availability of a power to strike out the offending pleading. [8][2015] QSC 207, [9] cited in Stowe v Johnson [2018] QSC 278, [9].[9][2001] QDC 301, [31].