Cavanagh v Lexastar Pty Ltd
[2021] FCCA 2001
•18 August 2021
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 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.
REASONS FOR JUDGMENT
JUDGE TONKIN:
INTRODUCTION
On 19 May 2020 the applicant commenced proceedings under the Fair Work Act2009 (Cth) (“the FW Act’) claiming that the First Respondent took adverse action against the applicant by effecting Conversion and Dismissal and that both actions were taken for a prohibited reason in contravention of sections 340, 351 and 352 of the FW Act. The applicant alleged that the Second, Third and Fourth Respondents were each liable as accessories to the First Respondents contraventions.
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”.
The applicant claims that the First Respondent took adverse action against the applicant be effecting the Conversion and Dismissal and both actions were taken for prohibited reasons in contravention of sections 340, 351 and 352 of the FW Act.
The applicant claims that the Second, Third and Fourth Respondents are each liable as accessories to the First Respondents contraventions.
On 27 July 2021 the applicant filed an application in a case seeking leave to further amend the claim.
On 6 August 2021 the respondents filed an application in a case seeking to amend the claim to strike out paragraphs 53F to 54F (inclusive) and costs on an indemnity basis.
DISCRETIONARY MATTER
Pursuant to subrule 7.01 (1) of the Federal Circuit Court Rules 2001 (Cth) the Court has power to “allow or direct a party to amend a document …in any way and on the conditions that the Court or Registrar thinks fit”.
With respect to applications to amend the pleadings the discretion is exercised according to the following principles:
“Leave to amend should be granted unless the proposed amendment is obviously futile or would cause substantial prejudice or injustice which could not be compensated for. These considerations require the Court to take account of the nature of the proposed amendment, whether it is made in good faith, the stage in the proceedings at which leave is sought, the nature of the prejudice that may be caused and the means by which such prejudice might be redressed. The question of delay is relevant to these considerations however it is not the purpose of the Court to punish a party for delay in seeking an amendment.”[5]
[5] Medich v Bentley-Smythe Pty Ltd [2010] FCA 494 at [8] (Stone J)
In Lynch v Cash Converters Personal Finance Pty Ltd [2016] FCA 1536 at [55] Gleeson CJ set out the approach to applications for leave to amend as follows:
“(1) the starting point is ‘that all amendments should be made and allowed that are necessary to ensure the real questions in the controversy between the parties are decided;
(2) an amendment will ‘ordinarily be allowed provided it can be done without harm to the other party which cannot be compensated by an award of costs or an adjournment’;
(3) leave should be granted unless the proposed amendment ‘is so obviously futile that it would be struck out if it had appeared in the original pleading or would cause substantial injustice which cannot be compensated for in the manner’ indicated above;
(4) the allowance of an amendment before the commencement of a trial ‘stands in a very different position from amendment towards the end of a trial’”;
(5) relevant matters the Court may consider include the nature and importance of the amendment to the party applying for it and the prejudice caused by the amendment.”
Counsel for the applicant relied in the principles in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 summarized by Forrest J in Thomas v Powercor Australia Limited (Ruling No 3) [2011] VSC 391 at [12]:
“[12] Aon demonstrates that there are a number of factors relevant to an application such as this. For instance:
(a) whether there will be a substantial delay caused by the amendment;
(b) the extent of any wasted costs;
(c) whether there is an irreparable element of unfair prejudice caused by the amendment;
(d) concerns of case management arising from the stage in the proceeding when the amendment is sought;
(e) whether the grant of the amendment will lessen public confidence in the judicial system; and
(f) whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.
It is, however, to be remembered that the primary question still remains: what do the interests of justice dictate? Aon reminds us that the prism through which these interests are viewed is wider than just that of the moving party.”
Applicant’s submissions
The applicant seeks leave to file and serve a further amended claim in three respects:
(1)Lexastar failed to make the applicant payment in lieu of notice in contravention of section 117 of the FW Act (paragraphs 33A, 33B, 33C and 33C (1));
(2)Inclusion of a claim for wrongful dismissal (paragraphs 6A, 33D and 33E).[6]
(3)Lexastar was prohibited from knowingly giving a payslip to the applicant that was false or misleading in a material particular pursuant to section 536 (3) of the FW Act (54A (b) to 54F inclusive).
[6] Affidavit of Leanne Tacey affirmed 23 July 2021 at [3] and LT - 1
Payment in lieu of Notice
With respect to the application for leave to further amend the claim regarding the alleged failure of Lexastar to make the applicant payment in lieu of notice in contravention of section 117 of the FW Act the applicant contends that the omission to include the matter in the pleadings was an oversight on the part of Counsel.
Counsel argued that the issue was clearly raised on 28 April 2021 in the applicant’s Outline of Submissions in preparation for trial listed in May 2021 at [46] where it was stated:
“James was not given notice of the Dismissal. Nor was any payment made by Lexastar in lieu of notice. At trial, the applicant will seek leave to amend its amended claim to include an allegation that Lexastar contravened section 117 of the FW Act by failing to pay James one weeks payment in lieu of notice.”
On 19 May 2021 the applicant’s solicitor informed the Court that the applicant would seek leave to amend his pleading to include an allegation that he was underpaid for payment in lieu of notice of Dismissal.
On 20 May 2021 the respondents’ solicitor replied to the email opposing the proposed amendment.
Counsel for the applicant submitted that the further amendments sought related to an allegation made in earlier pleadings that the applicant was a full time worker and not a casual worker. If the court finds that the applicant was a full time worker he was entitled to be paid a payment in lieu of notice and not treated as a casual worker.
Counsel for the applicant contends that no due notice was given to the applicant upon termination and that the proposed amended pleading should have been included from the outset. As reference was made to the issue in the outline of submissions filed on 28 April 2021 the respondent has been aware of the oversight since April 2021. Reference was made by the applicant of the need to amend the claim in correspondence to the court.
The applicant argued that should leave be granted to amend the claim in this regard there is no need for further evidence because it follows as a consequence of the full time or casual employee argument and the parties have led affidavit evidence and made submissions in that regard.
The applicant contends that the only thing required of the respondents’ is to calculate the applicant’s continuous period of service which bears upon how much notice was required to be given. If the applicant was employed for 12 months the respondents need to adopt a position. The applicant contends that the employee records to determine this issue are already exhibited to an affidavit of the respondents and they will be relied on to undertake that calculation.
Counsel for the applicant argued that the respondents were on notice as early as April 2021 with respect to the oversight and there is likely to be no delay to the trial if leave is granted. If the respondents need to file any further material which is disputed it is likely to be limited to the respondents denying the claim. There is no need for further evidence.
Counsel for the applicant contends that the prejudice to the applicant will be irreparable if the amendments are not made. If the Court finds that the applicant was not a full time worker as he claims he will not be able to recover payment in lieu of notice as he is entitled to under the FW Act.
It was argued on behalf of the respondents that the applicant in seeking to amend paragraphs 33A to 33C (1) introduces a new cause of action in the form of the underpayment claim and that the pleadings “do not make out the cause of action” because the applicant pleads in the alternative alleging on the one hand his continuous period of service was less than one year or alternatively greater than one year. The respondents contend that in addressing the alternative the respondents would be put to the task and cost of determining whether the applicant’s absences counted as “service” for the purpose of calculating whether the applicant’s continuous period of service was greater or less than one year.
The solicitor for the respondents accepted that in Cai v Tiy Loy & Co Ltd (No 2) [2015] FCC 2924 at [27] the Court said that generally the correct approach was that leave to amend should be granted unless the proposed amendment is obviously futile or would cause substantial prejudice or injustice which could not be compensated for.
He relied on the decision in Pietrobon v BMD Constructions Pty Ltd & Ors [2017] FCCA 1730 where the Court noted that it was a matter of discretion. As to whether the discretion should be exercised the Court in Pietrobon cited with approval at [8] the reasoning of Lucev FM in Fair Work Ombudsman v Nerd Group Australia Pty Ltd & Anor [2010] FMCA 569 at [19] to [20] as follows (citations omitted):
“[19] There are several relevant considerations in determining whether or not to exercise the discretion that the power under r 7.01(1) of the FMC Rules gives to the Court:
(a)firstly, the interests of justice. In SZGTE it was said that the interests of justice were paramount and in both SZGTE and Vijayakumar the interests of justice were said to be the “ultimate consideration”;
(b)secondly, it is relevant to consider whether the party seeking the amendment is acting in good faith;
(c)thirdly, it is relevant to consider whether the amendment sought would be futile. If the grounds for the amendment are of “doubtful merit” it is likely that they will be refused;
(d)fourthly, it is relevant to consider whether any injustice to the non-amending party cannot be adequately compensated for. This includes consideration of the consequences of a late adjournment if an amendment is granted, including consideration of whether costs orders are likely to be met (the latter is a factor applicable especially in migration cases in this Court); and
(e)fifthly, it is relevant to consider the question of case management.
[20] In exercising any discretion, the Court must take into account the objects of the FM Act in s.3, the mode of operation of the Court in s.42 of the FM Act, and the objects of the FMC Rules in r.1.03, which make it apparent that the Court is intended to operate in a manner:
(a) as informal as possible in the exercise of judicial power;
(b) which is not protracted in its proceedings;
(c) which resolves proceedings justly, efficiently and economically;
(d) which uses streamlined procedures; and
(e) that avoids undue delay, expense and technicality.”
I am satisfied that it is in the interests of justice to exercise the Court’s discretion to grant the applicant leave to further amend the claim to include paragraphs 33A , 33B, 33C and 33C (1) of the proposed further amended claim.[7] The issue was raised by the applicant in his outline of submissions in preparation for the trial scheduled in May 2021 which subsequently did not proceed. The respondents have had notice of the proposed amendment for several months. An explanation for the omission has been provided. I am satisfied that in granting leave the proposed amendments are likely to contribute to resolving the matter justly and efficiently.
[7] Affidavit of Leanne Tracey affirmed 23 July 2021 LT - 1
The respondents have filed seven affidavits in the proceedings. The employment records for the applicant are exhibited to an affidavit filed by the respondents in the proceedings and those documents are the records upon which the calculation of the underpayment is to be performed. I accept that the applicant will suffer prejudice if leave is not granted. To the extent that any further evidence is required it is likely to be extremely limited and confined specifically to the amended pleadings.
Leave is granted to the applicant to further amend the claim to include paragraphs 33A, 33B, 33C and 33C (1) of the proposed further amended claim.[8] Leave is granted to the respondents to file a further amended response and leave is granted to the applicant to file a further amended reply limited to the amended pleadings. Leave is granted to the parties to file further evidence limited to the amended pleadings. The parties have leave to file a further outline of submissions limited to any finding of fact or conclusion of law with respect to the amended pleadings.
CLAIM FOR WRONGFUL DISMISSAL (PARAGRAPHS 6A, 33D AND 33E).[9]
[8] Affidavit of Leanne Tracey affirmed 23 July 2021 LT - 1
[9] Affidavit of Leanne Tacey affirmed 23 July 2021 at [3] and LT - 1
Regarding the application for leave to include the pleading relating to wrongful dismissal (paragraphs 6A, 33D and 33E) Counsel for the applicant contends that this amendment is pleaded as a direct response to a new matter raised by the respondents in May 2021 that the applicant was dismissed for drug use or suspected drug use. It is contended for by the applicant that if the applicant was in fact dismissed for drug use (or suspected drug use) the respondent failed to follow its own testing procedures in accordance with the terms of the contract of employment between the applicant and First Respondent.
Counsel for the applicant submitted that the reason the amendment is sought to be pleaded for the first time at a late stage in the proceedings is as a direct result of the recent position taken by the respondents that the applicant’s employment was terminated for drug use or suspected drug use. He contends that the respondents have filed seven affidavits in the proceedings and none of those affidavits refer expressly to the fact that the reason for the applicant’s dismissal was that the respondents believed he was using drugs or was suspected of using drugs. The applicant argued that on the contrary the respondents provide as the reason for the applicant’s dismissal that his work was unsatisfactory and/or he was unreliable rather than the applicant being dismissed for the use of drugs or suspected use of drugs.
The pleading was first raised late in the proceedings on 14 May 2021 at [35] in the respondents outline of submissions as follows:
“[35] the reason for dismissing the applicant was because the respondents formed the view that the reason the applicant was not attending work was because of drugs or septic alcohol abuse.”
Reference was also made in the respondents written submissions relating to a subpoena issue at paragraph [7] that the reason for the applicant’s dismissal was a suspicion of drug use. The applicant contends that the allegation took him by surprise.
Leave is sought by the applicant based on the new position taken by the Respondents. Counsel for the applicant opposes the respondents being granted leave to file further evidence as sought by the respondents if leave is granted. Counsel argued that the respondents have been legally represented throughout the proceedings and would not have made submissions to the Court regarding drug use or suspected drug use by the applicant unless there was evidence in admissible form deposed to in relation to that issue. If leave to further amend the claim is granted Counsel for the applicant submitted that the parties should be given leave to file further written submissions of no more than 2 pages confined to dealing with the issue of wrongful dismissal.
The respondents oppose the Court granting the applicant leave to plead the new cause of action for wrongful dismissal. It was contended for on behalf of the respondents that this new cause of action “should have been pleaded from the outset” and the time for filing evidence and submissions has long closed. Further on behalf of the respondents it is submitted that it is “not fair to raise a new cause of action so late in the proceedings” and that the application “is at odds with the principles cited in Pietrobon”.
The respondents contend that the granting of leave to further amend the claim to include an action for wrongful dismissal would necessitate orders resetting the process. The respondents would need to file a further amended response, the applicant would need to file evidence to support of the new allegation of fact and the respondents would need to file evidence in response, the parties submissions would need to be amended and the granting of the application is likely to cause significant delay.
I am satisfied that it is in the interests of justice to exercise the Court’s discretion to grant the applicant leave to further amend the claim to include paragraphs 6A, 33D and33E of the proposed further amended claim.[10] The trial with respect to the substantive matter was originally scheduled to be heard on 26 May 2021. I accept that the respondents first raised on 14 May 2021 that the reason for dismissing the applicant was because the respondents formed a view that the applicant was not attending work because of drugs and septic alcohol abuse. The reason for the dismissal is an issue to be determined at trial.
[10] Affidavit of Leanne Tracey affirmed 23 July 2021 LT - 1
In Takemoto v Moody’s Investors Service Pty Limited,[11] Flick J observed at [23] that:
“As a very general proposition, the function of pleadings is to state with sufficient clarity the case that must be met: Banque Commerciale S.A., en liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286 to 287 per Mason CJ and Gaudron J. A practice of leaving a “footprint in correspondence” as a means of identifying matters in issue is to be “firmly discouraged”: White v Overland [2001] FCA 1333 at [4] per Allsop J (as his Honour then was). See also: Moss v Lowe Hunt & Partners Pty Ltd (No 2) [2011] FCA 18 at [33] per Katzmann J; SMEC Australia Pty Ltd v McConnell Dowell Constructors (Australia) Pty Ltd (No 2) [2011] VSC 492 at [9] per Vickery J…”
[11] [2014] FCA 1081
I am satisfied that it is just to grant the applicant leave to amend the pleadings in response to an issue first raised by the respondents shortly before the scheduled trial in May 2021. The reason why the applicant was dismissed is an issue to be determined at trial. I am satisfied that the applicant will suffer prejudice should leave to amend be refused. Granting leave to amend is likely to lead to the efficient conduct of the trial.
Leave is granted to the applicant to further amend the claim to include paragraphs 6A, 33D and 33E of the proposed further amended claim. Leave is granted to the respondent to file a further amended response and leave is granted to the applicant to file a further amended reply limited to the amended pleadings. The parties have leave to file a further outline of submissions limited to any finding of fact or conclusion of law with respect to the amended pleadings. I am not satisfied that any further evidence is required on this issue.
FALSE AND MISLEADING PAYSLIP
With respect to the application for leave to file a further amended claim to include pleadings that Lexastar was prohibited from knowingly giving a payslip to the applicant that was false or misleading in a material particular pursuant to section 536 (3) of the FW Act (54A (b) to 54F inclusive) that matter can be conveniently dealt with simultaneously with the respondents application to strike out paragraphs 53F to 54F.
In Kalayzich v Santa Sabina College & Anor [2020] FCCA 11 (3 March 2020) Driver J summarised the relevant principles with respect to strike out applications at [21] to [24] as follows:
“[21] The Court has power to strike out pleadings pursuant to rule 16.21 of the Federal Court Rules 2011 (Cth) (Federal Court Rules). It is not in dispute that the Federal Court Rules apply to the present application. Rule 16.21 provides:
Application to strike out pleadings
(1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:
(a)contains scandalous material; or
(b)contains frivolous or vexatious material; or
(c)is evasive or ambiguous; or
(d)is likely to cause prejudice, embarrassment or delay in the proceeding; or
(e)fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f)is otherwise an abuse of the process of the Court.
(2) A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court.
[22] The power to strike out a pleading operates in conjunction with rule 16.02 of the Federal Court Rules, and Division 16.1 of the Federal Court Rules, which sets out the general requirements for the content of pleadings. In Takemoto v Moody’s Investors Service Pty Limited,Error! Hyperlink reference not valid. Flick J observed at [23] that:
As a very general proposition, the function of pleadings is to state with sufficient clarity the case that must be met: Banque Commerciale S.A., en liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286 to 287 per Mason CJ and Gaudron J. …….. Rule 16.02(1)(b) requires a pleading to “be as brief as the nature of the case permits” and must “state the material facts on which the party relies”. A pleading which sets forth mere assertions or mere conclusions may be struck out. A pleading which sets out facts at too great a level of generality – or, conversely, with insufficient particularity – may also be struck out: Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [24] per Hely J; Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2008] FCA 1623 at [2] per Greenwood J.
[23] In Takemoto, Flick J also summarised the principles applicable to an application under rule 16.21 as follows:Error! Hyperlink reference not valid.
•First, the rule is “concerned only with the adequacy of the pleading” and “does not permit or allow consideration of facts or evidence outside the pleadings”.
•Second, a pleading will be embarrassing, “where it is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him”. The term “embarrassment” refers to a pleading that is “susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense”.
•Third, a pleading will only be struck out as failing to disclose a reasonable cause of action or defence “where it is clear that there is no real question to be tried”. Where a claim is not so clearly untenable that it cannot possibly succeed, it will not be struck out.
•Finally, and like the power conferred by s 31A, the power is to be exercised with caution and it is not to be lightly exercised. A “pedantic approach” should not be pursued.
[24] In Braude v Tauman at [57], Wigney J added to this summary that:
The power to strike out pleadings or portions of pleadings must be exercised “sparingly, with caution, and only in a clear case” (Morris v IMF Bentham Limited [2018] FCA 1009 at [67], per Wigney J) “lest one deprive a party of a case which in justice it ought to be able to bring”: Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164 at 175 (Jenkinson J).
In the outline of submissions filed on 28 April 2021 in anticipation of the trial scheduled for 26 May 2021 the applicant argued at [33] to [35]:
“[33] Lexastar is prohibited from knowingly making, keeping or giving to James any pay slip that is false or misleading in a material particular.
[34] In January 2020 Lexastar gave James pay slips that record his employment status as casual. On 20 August 2020 Lexastar produced pay slips that record James’ employment status as casual from 12 December 2019 and stated that he had accrued 9.54 hours of annual leave by 19 December 2019.
[35] The evidence will show that these particulars were false and that Lexastar knew as much at the time it created the pay slips and provided same to James.”
With respect to the proposed amendments to the claim on 22 July 2021 the applicant advised the respondents in correspondence that he intended to withdraw paragraphs 53G and 54A (a) of the proposed amendments. At the time of this hearing those amendments had been withdrawn. Counsel for the applicant argued it was unnecessary for the applicant to file an application in a case with respect to the remaining proposed amendments at 54A (b) through to 54F of the proposed further amended claim.[12]
[12] Affidavit of Leanne Tacey affirmed on 23 July 2021 at LT -1
The respondents complain they have been put to the expense of considering paragraphs 53G and 54A (a) subsequently withdrawn. Regarding the remaining proposed amendments the respondents seek to strike out paragraphs 54A (b) to 54F of the proposed further amended claim in reliance on the decision of Mercuri J in Kramer & Anor v Punthill Apartment Hotels Pty Ltd & Anor [2020] FCCA 1617.
The respondents contend in the outline of submissions filed on 17 August 2021 that on the applicant’s own evidence payslips were provided to the applicant at the time of his employment on time and they were not false or misleading in a material particular. It was submitted that the decision in Kramer (supra) is “directly on point and clearly renders this claim without any basis in law”. The respondents argue that subsections 536 (1) and 536 (3) of the FW Act should be read together and the obligation to provide a pay slip is discharged the moment an employer is given a pay slip in compliance with subsection 536 (1). Thus if the employer provides a pay slip at a later time that is not accurate but false and misleading they will not have contravened subsection 536 (3) of the FW Act pursuant to a subsequent request. The respondents contend that upon that basis the proposed pleadings should be struck out.
The decision in Kramer (supra) did not consider the construction of subsection 536 (3) of the FW Act but rather dealt with the obligation on an employer to provide pay slips to employees on request. In Kramer (supra) the Court considered whether a request for outstanding pay slips was a request for employment records. The Court discussed the “request” in the context of the particular circumstances of the case and determined as follows:
“[174] In light of correspondence which expressly continues to seek the production of employment contracts and outstanding pay slips it is open to the court to conclude that these were the only documents that the applicant sought after 4 April 2014. To the extent that there was a broader and more general request for the production of employment records this request was no longer pressed after the letter of 4 April 2014.
[175] For each of these reasons when viewed in context and having regard to the fact that the applicants were legally represented at the time I find that the applicants abandoned their request for employee records at large. The only requests which were pressed following the 4 April 2014 letter were for the applicant’s employment contracts and outstanding pay slips.”
Her Honour then went on to consider the consequences of a breach of employment records that exposes an employer to a penalty. She observed that under subsection 536 (1) of the FW Act an employer is required to provide a pay slip to an employee within one working day of paying the employee for their work. The payslip must also contain information prescribed by the FW Regulations some of which an employer is required to maintain as an employment record. She concluded at [179] that “there is no obligation either in the FW Act or in the Regulations that an employer retain copies of or provide pay slips to an employee upon request. Once provided to the employee at the time of payment the employer has discharged their obligation under subsection 536 (1) of the FW Act”.
The applicant submitted that the argument contended for by the respondents was a “novel proposition” for which there is no authority nor does the decision in Kramer deal with subsection 536 (3) of the FW Act. The proposed amended pleadings relate to an alleged breach of subsection 536 (3) of the FW Act which places an obligation on an employer not to give a pay slip to the employee that the employer knows is false or misleading.
The applicant contends that the interpretation asserted by the respondents is incorrect and subsection 536 (3) of the FW Act stands apart from 536 (1) to ensure that the mischief the provision is intended to redress is not limited to when an employer provides a payslip to an employee within one working day of paying the employee for their work. Counsel for the applicant contends that it is arguable that subsection 536 (3) of the FW Act imposes an obligation on an employer not to provide an employee with a pay slip that is false and misleading in a material particular at any time.
The applicant submitted that the strike out application does not respond to the contention raised by the applicant. Further if a party is looking to strike out a pleading the test is whether the pleading is arguable having regard to the claim put forward. The applicant contends that it is a question of statutory construction to be determined at trial whether the provision of a pay slip that is false and misleading in a material particular is restricted to the time specified in subsection 536 (1) or otherwise. Further there is no authority and the matter is not soundly argued on this application.
As to the time frame with respect to the respondent “giving a pay slip” to the applicant that they know to be false or misleading that is a matter for trial. The decision in Kramer respectfully does not address this issue. Nor was the Court taken to any binding authority dealing with the meaning of subsection 536 (3) of the FW Act and whether the false and misleading provision of information is restricted only to pay slips issued within one working day of paying the employee for their work or as otherwise alleged by the applicant.
I take into account in accordance with the principle referred to in Takemoto (supra) that “a pleading will only be struck out as failing to disclose a reasonable cause of action (or defence) where is it clear that there is no real question to be tried. Where a claim is not so clearly untenable that it cannot possibly success it will not be struck out”. I am satisfied that both parties have an arguable case on the meaning of subsection 536 (3) of the FW Act with respect to pay slips provided to the applicant that the employer knew to be false and misleading in a material particular. I am satisfied that it is in the interests of justice to exercise the Court’s discretion to grant the applicant leave to further amend the claim to include paragraphs 54A (b) to 54F of the proposed further amended claim.[13] The application to amend the pleadings to strike out paragraphs 54A (b) to 54F is refused.
[13] Affidavit of Leanne Tracey affirmed 23 July 2021 LT - 1
Leave is granted to the applicant to further amend the claim to include paragraphs 54A (b) to 54F inclusive of the proposed further amended claim. Leave is granted to the respondent to file a further amended response and leave is granted to the applicant to file a further amended reply limited to the amended pleadings. The parties have leave to file a further outline of submissions limited to any finding of fact or conclusion of law with respect to the amended pleadings.
COSTS
The respondents seek an order that the applicant pay the respondents costs on an indemnity basis. The respondents in the outline of submissions filed on 17 August 2021 seek an order that should leave be granted to the applicant to further amend the claim that the applicant pay the respondents costs in the sum of $5469 within 21 days. The respondents solicitor deposed in an affidavit filed by Mr Pratt that the total costs incurred by the respondents amounts to $11,047.50 plus GST.
Section 570 of the FW Act provides:
“s 570 (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b)the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
(c)the court is satisfied of both of the following:
(i)the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
The applicant has been wholly successful with respect to the interlocutory application. As to whether costs should be awarded to the respondents in circumstances where the Court declined to strike out paragraphs 54A (b) to 54F of the proposed further amended claim the Court accepts that the respondents have incurred costs in opposing the interlocutory application however section 570 of FW has limited application as set out above.
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
I am not satisfied that the criteria in subsection 570 (2) of the FW Act has been met. There is no basis to suggest that the interlocutory proceedings were instituted vexatiously or without reasonable cause. Regarding the amendment with respect to wrongful dismissal the amendment was sought in direct response to an issue raised by the respondents for the first time in May 2021 shortly before the scheduled trial. Regarding the amendment with respect to the false and misleading pay slips there is an arguable issue to be tried.
Regarding whether there was an unreasonable act or omission by a party that caused the other party to incur the costs I reject that assertion. The omission by Counsel to include the pleading with respect to payment in lieu of notice was an oversight rather than an unreasonable act which was brought to the notice of the respondents in the outline of submissions filed on 28 April 2021 prior to the scheduled trial.
I am not satisfied that it is just to make an order for costs. It is therefore unnecessary to consider whether costs should be awarded on an indemnity basis.
The respondents’ application for costs is refused.
I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Tonkin. Dated: 26 August 2021
0
20
2