Cavanagh v Lexastar Pty Ltd

Case [2021] FCCA 2001

FEDERAL CIRCUIT COURT OF AUSTRALIA

Cavanagh v Lexastar Pty Ltd [2021] FCCA 2001

File number(s): BRG 292 of 2020
Judgment of: JUDGE TONKIN
Date of judgment: 26 August 2021
Catchwords:

PRACTICE AND PROCEDURE – application for leave to further amend claim pursuant to r 7.01 of Federal Circuit Court Rules2001 – whether Court should exercise discretion to grant leave to amend claim

PRACTICE AND PROCEDURE – application by respondents to strike out pleadings – consideration of the principles relating to striking out pleadings
Legislation:

Fair Work Act2009 (Cth), ss.117, 340, 351, 352, 536 (1), 536 (3), 570

Federal Circuit Court Rules 2001 (Cth), r.7.01(1))
Cases cited:

Aon Risk Services Australia Limited v Australian National University [2009] HCA 2

Cai v Tiy Loy & Co Ltd (No 2) [2015] FCC 2924

Fair Work Ombudsman v Nerd Group Australia Pty Ltd & Anor [2010] FMCA 569

Kalayzich v Santa Sabina College & Anor [2020] FCCA 11

Kramer & Anor v Punthill Apartment Hotels Pty Ltd & Anor [2020] FCCA 1617

Lynch v Cash Converters Personal Finance Pty Ltd [2016] FCA 1536

Pietrobon v BMD Constructions Pty Ltd & Ors [2017] FCCA 1730

Rahman v Commonwealth of Australia as represented by the Australian Taxation Office [2013] FCCA 388

Takemoto v Moody’s Investors Service Pty Limited

Thomas v Powercor Australia Limited (Ruling No 3) [2011] VSC 391
Number of paragraphs: 72
Date of hearing: 18 August 2021
Place: Brisbane
Counsel for the Applicant: Mr Latham
Solicitor for the Applicant: Anderson Gray Lawyers
Counsel for the Respondent: Mr Pratt
Solicitor for the Respondent: Franklin Athanasellis Cullen

ORDERS

BRG 292 of 2020
BETWEEN:

JAMES CAVANAGH

Applicant
AND:

TURSA EMPLOYMENT & TRAINING LIMITED

Respondent

ORDER MADE BY:

JUDGE TONKIN

DATE OF ORDER:

26 AUGUST 2021

THE COURT ORDERS THAT:

1.The applicant is granted leave to further amend his claim in accordance with the proposed further amended claim[1]and is to file and serve a further amended claim by 4.00 p.m. 27 August 2021.

[1] Affidavit or Leanne Tacey affirmed 23 July 2021 LT - 1

2.The respondents are granted leave to amend the response and to file and serve an amended response by 4 .00 p.m. 1 September 2021.

3.The applicant is granted leave to amend his reply and is to file and serve an amended reply by 4 .00 p.m. 6 September 2021.

4.The respondents are granted leave to file and serve any further evidence limited to the amended pleadings at paragraphs 33A, 33B, 33C and 33C (1) by 4.00 p.m. 10 September 2021:

(a)concerning the applicant’s further amended claim referred to in order 1 above; and

(b)arising from the amended response referred to in order 2 above; and

(c)concerning any matters arising from any amended reply referred to in order 3 above.

5.The applicant is granted leave to file and serve any further evidence in reply to the respondents' further evidence limited to the amended pleadings at paragraphs 33A, 33B, 33C and 33C (1) by no later than 13 September 2021

6.No later than…

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Cavanagh v Lexastar Pty Ltd [2021] FCCA 2001
Case
[2021] FCCA 2001
Decision Date

CaseChat Overview and Summary

In *Cavanagh v Lexastar Pty Ltd*, heard in the Federal Circuit Court of Australia, the applicant, James Cavanagh, sought leave to further amend his claim under the Fair Work Act 2009 (Cth). The respondents, Lexastar Pty Ltd and its directors, sought to strike out certain paragraphs of the applicant's proposed amended claim and sought costs on an indemnity basis. The dispute arose from the applicant's employment with Lexastar, his subsequent diagnosis of depression and anxiety, his use of personal and annual leave, and the alleged detrimental changes to his employment status and pay, culminating in the termination of his employment.

The court was required to determine two primary legal issues. Firstly, whether to exercise its discretion to grant the applicant leave to further amend his claim pursuant to rule 7.01 of the Federal Circuit Court Rules 2001. Secondly, the court had to consider the principles relating to striking out pleadings in determining the respondents' application to strike out specific paragraphs of the applicant's amended claim.

Judge Tonkin granted the applicant leave to further amend his claim and also granted the respondents leave to amend their response and the applicant leave to amend his reply, setting strict timelines for these filings. The court also made orders regarding the filing of further evidence and outlines of argument by both parties. Crucially, the respondents' application to strike out proposed amended pleadings was dismissed, and their application for costs was also dismissed. The matter was to remain listed for trial on 20 September 2021. The court's decision on costs was informed by the principles established in cases such as *Rahman v Commonwealth of Australia* and *Construction, Forestry, Mining and Energy Union v Clarke*, which outline the criteria for awarding costs in matters arising under the Fair Work Act, requiring an unreasonable act or omission by a party that causes the other party to incur costs.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. The applicant is granted leave to further amend his claim in accordance with the proposed further amended claim[1]and is to file and serve a further amended claim by 4.00 p.m. 27 August 2021.

[1] Affidavit or Leanne Tacey affirmed 23 July 2021 LT - 1

2. The respondents are granted leave to amend the response and to file and serve an amended response by 4 .00 p.m. 1 September 2021.

3. The applicant is granted leave to amend his reply and is to file and serve an amended reply by 4 .00 p.m. 6 September 2021.

4. The respondents are granted leave to file and serve any further evidence limited to the amended pleadings at paragraphs 33A, 33B, 33C and 33C (1) by 4.00 p.m. 10 September 2021:

(a) concerning the applicant’s further amended claim referred to in order 1 above; and

(b) arising from the amended response referred to in order 2 above; and

(c) concerning any matters arising from any amended reply referred to in order 3 above.

5. The applicant is granted leave to file and serve any further evidence in reply to the respondents' further evidence limited to the amended pleadings at paragraphs 33A, 33B, 33C and 33C (1) by no later than 13 September 2021

6. No later than 4.00 p.m. 13 September 2021 the applicant shall file and serve upon the respondents an outline of argument setting out:

(a) all issues of fact and law that the applicant contends are raised by the application and the response thereto;

(b) the findings of fact and conclusions of law contended for by the applicant; and

(c) all relevant authorities (including references to particular passages of those authorities) relied upon by the applicant.

7. No later than 4.00 p.m. 15 September 2021 the respondents shall file and serve upon the applicant an outline of argument setting out:

(a) all issues of fact and law that the respondent contends are raised by the application and the response thereto;

(b) any agreed findings of fact or conclusions of law the Court will be invited to make having regard to the applicant’s outline; and

(c) the finding of fact or conclusion of law otherwise contended for by the respondent; and

(d) all relevant authorities (including references to particular passages of those authorities) relied upon by the respondent.

8. No later than 4.00 p.m. 17 September 2021 the applicant shall file and serve upon the respondents a further document setting out any agreed findings of fact or conclusions of law the Court will be invited to make having regard to the respondent’s outline.

9. The respondents application filed on 6 August 2021 to strike out proposed amended pleadings 54A (b) to 54F is dismissed.

10. The respondents’ application for costs is dismissed.

11. The matter remains listed for trial on 20 September 2021.

Background

Background to the litigation

By application in a case filed on 27 July 2021 the applicant seeks leave to further amend his claim under the FW Act. In his application in a case filed on 6 August the respondent sought orders to strike out paragraphs 53F to 54F of the applicant’s further amended claim. The respondent seeks costs on an indemnity basis. BACKGROUND The applicant (James Cavanagh) was diagnosed with depression and a generalised anxiety disorder in 2018. The applicant commenced working for the First Respondent (Lexastar) on 3 December 2018 initially on a casual basis as a machinist, fitter and turner and was paid an hourly rate of $37.50 for ordinary hours worked. The First Respondent is operated and managed by the Second Respondent (Ranald Cilento), the Third Respondent (Peter Cilento) and the Fourth Respondent (Mary Cilento). On 28 March 2019 the applicant transitioned to full time employment and was paid an hourly rate for ordinary hours worked.[2][2] Applicant’s affidavit filed 11 September 2020 [21] On 19 December 2019 the applicant received a pay slip from the First Respondent that recorded 22 hours of accrued annual leave.[3] After proceedings commenced the applicant received an amended version of the same pay slip that recorded 9.54 hours of accrued annual leave.[3] Applicant’s affidavit filed 11 September 2020 [35] The applicant took personal and annual leave during his employment to manage his anxiety and depression including leave on 10 January 2020. On 13 January 2020 the applicant was called to a meeting with the Second and Fourth Respondents and was told his use of personal and annual leave was costing the First Respondent money. Concerned that he may be dismissed the applicant contacted a provider of disability employment services (TURSA Employment and Training) and was assigned a case worker (Jeanette Beattie). On 14 and 15 January 2020 the applicant took personal leave. On 15 January 2020 the First Respondent met with Ms Beattie and agreed to engage with TURSA and put in place a flexible working arrangement signed by the Second Respondent. On 17 January 2020 the applicant’s employment was converted from full time to casual. The applicant contends this had not been agreed to or foreshadowed during the discussion between Beattie and the Second Respondent. The applicant complained to Beattie about the conversion and his rate of pay.[4][4] Applicant’s affidavit filed 11 September 2020 [49] and [51 (b)] On 31 January 2020 the Fourth Respondent spoke with the applicant during his work shift and said that TURSA had been querying his rate of pay. The applicant complained he had not known about the conversion and that he was not being paid casual loading. The applicant contends that the Fourth Respondent said she was looking after him by not reducing his pay to minimum wages. On 3 February 2020 the applicant sent a text to the Fourth Respondent requesting a day of personal leave. The First Respondent terminated the applicant’s employment with immediate effect. The letter of termination states that “in the current economic climate Lexastar no longer has the work available for you”.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I refer to the decision of Rahman v Commonwealth of Australia as represented by the Australian Taxation Office [2013] FCCA 388 (12 July 2013) where Driver J referred to the principles applicable to the exercise of the discretion under section 570 (2) (b) of the FW Act and said at [4] (citations omitted):[4] In ordinary circumstances, the Court is not empowered to order costs in matters arising under the FW Act. The power is enlivened by a party’s unreasonable act or omission. Once the power is enlivened, the Court has a broad discretion. What is an unreasonable act or omission will depend upon the facts of the particular case. A procedural failure may, prima facie, be unreasonable and a pleading failure (by which I mean something put in or left out of a pleading) which is unreasonable may also enliven the power. A finding of an unreasonable act or omission must be the exception rather than the rule. It follows that a reasonably high bar needs to be set for a party alleging an unreasonable act or omission.[5] In Construction, Forestry, Mining and Energy Union v Clarke, the Full Court of the Federal Court said:‘The exception applies when two criteria are satisfied. The first criterion is that one party must have engaged in "an unreasonable act or omission". As the reasoning of Tracey J in Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; (2007) 162 FCR 392 and Siopis J in McAleer v The University of Western Australia (No 2) [2007] FCA 247; (2007) 161 IR 151 demonstrates, whether a party has conducted itself or its litigation in such a way as to cross this threshold will depend on the particular circumstances of the case. The second criterion is that the act or omission of one party must have "caused another party to the proceeding to incur costs in connection with the proceeding". Once both criteria are satisfied, then the Court "may" in its discretion order the party which has engaged in the unreasonable act or omission to pay some or all of the costs of the other party.See also Larne-Jones v Human Synergistics Australia Limited & Ors.[6] In Dowling v Fairfax Media Publications Pty Ltd Moore J said the task involves “a qualitative assessment of the proceeding in its entirety, focussing of course on the party that ‘instituted’ the proceeding.”…..[8] As to the meaning of “unreasonable”, the Full Federal Court (Black CJ Emmett & Hely JJ) in National Mutual Life Association of Australasia Ltd v Campbell said:‘There was some discussion during the hearing of the appeal about the meaningof "unreasonable " and "unfair". Reference was made to decisions of the Court in which dictionary definitions of these broad concepts had been adopted. Although the question does not arise for decision in this case, we would comment that attempts to achieve a precise definition of words such as "unreasonable" and "unfair" are likely to run into difficulty. The legislature has quite deliberately used words of broad content. Concepts such as "unreasonable" can be unduly restricted by the use of synonyms and definitions. For example, in ordinary usage conduct may be referred to as "unreasonable" which is not really beyond the bounds of reason at all - it is just "unreasonable". As Kitto J cautioned in Federal Broom Co Pty Ltd v Semlitch [1964] HCA 34; (1964) 110 CLR 626 at 633: "Fallacy lurks in paraphrase". See also Kumar v Minister for Immigration and Ethnic Affairs (1997) 144 ALR at 445, 446.”CONCLUSION

Ratio Decidendi

Legal Principle Established

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