Carter v Orix Australia Corporation Ltd

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FEDERAL COURT OF AUSTRALIA

Carter v Orix Australia Corporation Ltd [2022] FCA 784

File number(s): NSD 559 of 2021
Judgment of: KATZMANN J
Date of judgment: 8 July 2022
Catchwords:

PRACTICE AND PROCEDURE — interlocutory application to file amended originating application — where amendments identify statutory bases for claims with respect to unpaid accrued annual leave already made in amended statement of claim previously filed — where respondent did not oppose amendments or claim to be prejudiced by them, whether leave should be granted and when the amendments should take effect

PRACTICE AND PROCEDURE — interlocutory application to strike out part of respondent’s defence which raises a claim of equitable set-off — whether set-off claim should be struck out because it fails to disclose a reasonable defence — whether question appropriate for determination on strike-out application

PRACTICE AND PROCEDURE — interlocutory application for summary judgment of claim for unpaid long service leave — where applicant had been employed by respondent for three decades and respondent admitted that no long service leave had been paid to applicant but claimed to be entitled to set off the amount owing against damages to which it claimed to be entitled as a result of applicant’s conduct, whether no reasonable defence disclosed

Legislation:

Long Service Leave Act 1955 (NSW) ss 4, 7, 12

Fair Work Act 2009 (Cth) ss 61(1), 90(2), 544, 570

Federal Court of Australia Act 1976 (Cth) ss 31A, 32, 37M, 59(2B), 570

Federal Court Rules 2011 (Cth) rr 1.41, 8.21, 16.53, 26.01

Cases cited:

Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (1994) 217 ALR 226

Australian Beverage Distributors Pty Ltd v Evans & Tate Premium Wines Pty Ltd (2007) 69 NSWLR 364

Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326

Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559

AWA Ltd v Exicom Australia Pty Ltd (1990) 19 NSWLR 705

D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10

James v Commonwealth Bank of Australia (1992) 37 FCR 445

Joseph v Parnell Corporate Services Pty Ltd [2020] FCA 426; 295 IR 49

Joseph v Parnell Corporate Services Pty Ltd (2021) 284 FCR 546

Kernaghan v Neffray Pty Ltd [2020] FCCA 1141

Krajniw v Newman (No 2) [2015] FCA 673

McGraw-Hill Financial, Inc v Clurname Pty Ltd [2017] FCAFC 211; 123 ACSR 467

Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221

Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 203 FCR 325

Polar Aviation Pty Ltd v Civil Aviation Safety Authority(No 4) (2011) 203 FCR 293

Rawson v Samuel (1841) Cr & Ph 161; 41 ER 451

Resolute Corporate Services Pty Ltd (formerly Goudhurst Pty Ltd) v Wearing [2020] WADC 132

Spencer v The Commonwealth (2010) 241 CLR 118

Stanley v Service to Youth Council Inc (No 3) (2014) 225 FCR 357

Walker v Secretary, Department of Social Security (1995) 56 FCR 354

Western Australia v Fazeldean…

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Details
Case
[2022] FCA 784
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Carter, the applicant, brought a case against Orix Australia Corporation Ltd, the respondent, concerning unpaid accrued annual leave and long service leave. The applicant sought leave to amend his originating application and statement of claim to clarify the statutory bases for his claims. Additionally, the applicant applied for summary judgment on his claim for unpaid long service leave, while the respondent sought to strike out part of the applicant’s defence related to an equitable set-off.

The court considered several legal issues, including whether leave should be granted for the applicant to amend his originating application and statement of claim, whether the respondent’s claim of equitable set-off should be struck out, and whether the applicant’s summary judgment application should be granted. The court noted that the respondent had not opposed the amendments or claimed to be prejudiced by them, suggesting that the amendments should be allowed. Regarding the summary judgment application, the court held that the applicant needed to demonstrate that the respondent had no reasonable prospect of successfully defending the claim. The court was cautious in exercising its discretion to grant summary judgment, mindful of the need to avoid stultifying the development of the law.

The court declined the application for summary judgment, stating that the success of the proceedings depended on propositions of law that were not precluded by existing authority. The court found that the determination of the respondent’s claim for equitable set-off involved a factually intense inquiry spanning over a decade and required consideration of both lay and expert evidence. The court concluded that the matter was not appropriate for summary judgment, as the success of the proceedings was critically dependent on a proposition of law that could be subject to further exploration. The court also noted that the decision in Walker was not binding and that there was a powerful dissent. The court granted leave for the applicant to file an amended originating application and ordered that the amendments take effect from the date the proceeding was commenced. The interlocutory application was otherwise dismissed, and costs were reserved.

Orders

Orders of the court

1. Leave be granted to the applicant to file an amended originating application in the form exhibited to the affidavit of Michael Zwar sworn on 5 April 2022.

2. The amendments made in the amended originating application and the amended statement of claim filed on 20 October 2021 take effect from 11 June 2021, being the date this proceeding was commenced.

3. The interlocutory application (as amended on 24 May 2022) otherwise be dismissed.

4. Costs be reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

For these reasons I decline the application.The summary judgment application Mr Carter applies for summary judgment on his long service leave claim pursuant to s 31A of the FCA Act and/or r 26.01. Section 31A relevantly provides:(1)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a)the first party is prosecuting the proceeding or that part of the proceeding; and(b)the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. Rule 26.01(1) allows a party to apply to the Court for an order that judgment be given against another party because, amongst other things, the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. The same principles apply, regardless of which power is exercised. First, the party seeking the order bears the burden of persuading the court that the power should be exercised: Krajniw v Newman (No 2) [2015] FCA 673 at [12] (Reeves J). Second, it is necessary to proceed with caution: Spencer v The Commonwealth (2010) 241 CLR 118 at [24] (French CJ and Gummow J); [60] (Hayne, Crennan, Kiefel and Bell JJ). Third, the development of the law should not be stultified by the exercise of the power: Spencer at [25] (French CJ and Gummow J); Western Australia v Fazeldean (No 2) (2013) 211 FCR 150 at [35] (Allsop CJ, Marshall and Mansfield JJ). In Spencer at [25], French CJ and Gummow J observed that:Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success. For the reasons given above in connection with the strike-out application, I am not persuaded that this is a proper case in which to grant summary judgment. Whether an equitable set-off is available will largely turn on the facts. As OACL submitted, the inquiry into whether OACL’s claim against Mr Carter impeaches his title to demand payment of his statutory entitlements is factually intense. The factual inquiry spans a period of more than a decade. OACL submitted, without demur, that the determination of its claim involves many contested matters and will require consideration of both lay and expert evidence. As I have already observed, s 12 of the LSL Act gives the Court a very broad discretion to make any order it thinks just. Walker is not binding, not least because it is concerned with a different statutory scheme. In any case, there was a powerful dissent. If, contrary to my conclusion, Walker is not distinguishable, while a judge at first instance would be bound by the majority’s view if it were indistinguishable, an appellate court might be persuaded that Drummond J was correct. Should it come to that, I do not consider that OACL should be shut out from putting the argument, formally at first instance and fully on appeal.

Ratio Decidendi

Legal Principle Established

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