| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : CONNOR -v- UNITING CHURCH IN AUSTRALIA PROPERTY TRUSTS WA [No 2] [2011] WADC 113 CORAM : DAVIS DCJ HEARD : 10 MAY 2011 DELIVERED : 22 JULY 2011 FILE NO/S : CIV 3222 of 2008 BETWEEN : PETA CONNOR Plaintiff
AND
UNITING CHURCH IN AUSTRALIA PROPERTY TRUSTS WA
Defendant
Catchwords: Trial of preliminary issues - Construction of deed of settlement - Release and bar to any action - Consent judgment for dismissal of earlier action - Whether second action an abuse of process - Res judicata - Issue estoppel - Anshun estoppel Legislation: Rules of the Supreme Court 1971, O 32 r 4
Workers' Compensation and Injury Management Act 1981, s 92(f), s 93B(2)
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Result: Preliminary issues answered in favour of the plaintiff Representation: Counsel:
Plaintiff : Mr A J Cameron
Defendant : Mr D J Pratt
Solicitors:
Plaintiff : Corser & Corser
Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Australasian Correctional Management v Nydegger [2011] WACC C10-2011
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Blair v Curran (1939) 62 CLR 464
Bride v Australian Bank [2000] WASC 310
Butler v St John of God Health Care Inc [2008] WASCA 174
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502
Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500
F & D Normoyle Pty Ltd v Transfield Pty Ltd (2005) 63 NSWLR 592
Gardiner v Agricultural & Rural Finance Pty Ltd [2007] NSWCA 235
Gibbs v Kinna [1999] 2 VR 19
Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112
HotCopper Australia Ltd v SAAB (2002) 117 IR 256; [2002] WASCA 190
Hunter v Chief Constable of the West Midlands Police [1982] AC 529
Isaacs v Ocean Accident & Guarantee Corporation Ltd (1957) 58 SR (NSW) 69
Jackson v Goldsmith (1950) 81 CLR 446
Kuligowski v Metrobus (2004) 220 CLR 363
Macchia v Public Trustee (2008) 251 ALR 385; [2008] WASCA 241
Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543
Matthews v Cool or Cosy Pty Ltd (2004) 136 IR 156; [2004] WASCA 114
McDermott v Black (1940) 63 CLR 161
McDonald v Deputy Commissioner of Taxation (2005) 187 FLR 461; (2005) 23 ACLC 324; [2005] NSWSC 2
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O'Donel v Commissioner for Road Transport and Tramways (NSW) (1938) 59 CLR 744
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699
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1 DAVIS DCJ: In 2007 the plaintiff, Ms Connor, was employed by the defendant, the Uniting Church in Australia Property Trusts WA. She has made a claim in this action for damages for alleged breaches of contract by the defendant in failing to comply with its policies when dealing with her in the workplace and terminating her employment on 11 December 2008.
2 The defendant has alleged that this action is an abuse of process, as a result of a deed of settlement entered into by both the plaintiff and the defendant dated 8 December 2008 and the dismissal, by consent, of an earlier action brought by the plaintiff against the defendant in CIV number 3021 of 2008, which I shall refer to as the first action. 3 A trial of preliminary issues took place before me. The order made for the trial of these preliminary issues was by consent: 4 I will address these preliminary issues, having regard to the consent order and the parties' submissions, by asking the following two questions: The legal principles applicable to the construction of the deed of settlement 5 The first preliminary issue in relation to the deed of settlement requires me to construe the terms of the deed, in particular a release provided by the plaintiff, and determine whether the plaintiff is precluded from bringing this action. An agreement not to sue on any cause of action can effect a release at law (by way of accord and satisfaction) and in equity: McDermott v Black (1940) 63 CLR 161, 183 - 184, 187. 6 When construing the release I need to have regard to its true purpose as ascertained from the nature of the deed and the surrounding circumstances. The surrounding circumstances include the state of knowledge of the parties concerning the existence, character and extent of the liability in question and the actual intention of the person providing (Page 5)
the release: Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112, 129 - 130; Butler v St John of God Health Care Inc [2008] WASCA 174 [3] and [6] (Buss JA); [30] - [33] (Newnes AJA). 7 If the words of the deed are unambiguous I should give effect to them. If the language of the deed is open to two constructions, then I should prefer the construction which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109; Butler v St John of God Health Care [34] (Newnes AJA).
The legal principles applicable to abuse of process 8 The second preliminary issue concerns the power of the court to prevent abuse of its processes. An abuse of process can arise when a person seeks to re-litigate matters which have already been decided in an earlier court proceeding: Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 [59] (French J). 9 The circumstances in which abuse of process can arise are varied and there are no fixed categories of the kinds of circumstances in which the court has a duty to exercise its power to dismiss proceedings for abuse of process: Hunter v Chief Constable of the West Midlands Police [1982] AC 529, 536, Spalla v St George Motor Finance Ltd (No 6) [59]; Bride v Australian Bank [2000] WASC 310 [61]. 10 It is not necessary, for a proceeding to amount to an abuse of process by way of attempted re-litigation of a dispute already judicially determined, that one of the doctrines of res judicata, issue estoppel or Anshunestoppel is applicable: Macchia v Public Trustee (2008) 251 ALR 385;[2008] WASCA 241 [32] (Steytler P); Spalla v St George Motor Finance Ltd (No 6) [66] - [68] (French J). The defendant, however, relies on these three specific doctrines and so I will address each of them. 11 The doctrine of res judicata arises where an action has been brought and judgment has been entered. The judgment will extinguish the right or cause of action claimed in that action, which is then said to have merged in the judgment, so that no further proceedings may be brought between the same parties or their privies in respect of that particular cause of action: Blair v Curran(1939) 62 CLR 464, (532); Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, 597. (Page 6)
12 A 'cause of action' may have the following meanings: 1. the facts which support a right to judgment; 2. a right which has been infringed; or 3. the substance of an action as distinct from its form. Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, 508; Port of Melbourne Authority v Anshun Pty Ltd (610 - 611) (Brennan J). 13 The principle behind the doctrine of issue estoppel is that a judicial determination involving an issue of fact or of law disposes once and for all of that issue. It cannot be afterwards raised by the same parties in subsequent proceedings. The requirements for an issue estoppel are that the same question has to have been decided, the judicial decision which is said to create the estoppel must be final, and the parties must be the same: Kuligowski v Metrobus (2004) 220 CLR 363 [21]. 14 An issue estoppel covers only those matters which the prior judgment or order 'necessarily established as the legal foundation or justification of its conclusion'. Issues of law or fact which are subsidiary or collateral are not covered by the estoppel. Issue estoppel, so far as it applies to facts, is confined to ultimate facts and does not extend to findings which concern only evidentiary facts: Blair v Curran (531, 532 - 533); Jackson v Goldsmith (1950) 81 CLR 446, 455 - 456. As against a successful party the unsuccessful party is bound by the authoritative determination of every fundamental issue but when a distinct and separate issue arises subsequently, the unsuccessful party is not bound to submit to the second issue being established by the combination of a former issue with additional evidence, no matter how strong such evidence may be: O'Donel v Commissioner for Road Transport and Tramways (NSW)(1938) 59 CLR 744, 763 (Evatt J). 15 Consent judgment intended by the parties to dispose finally of the substantive proceedings between them will give rise to res judicata and issue estoppel: Chamberlain (508); Isaacs v Ocean Accident & Guarantee Corporation Ltd (1957) 58 SR (NSW) 69, 75. Whether a consent judgment precludes the pursuit of a later action depends on whether the causes of action in the two actions are the same. This requires an examination of the factual circumstances relied upon to establish the right to relief in each case, to determine whether there is a sufficient identity between them to found the conclusion that the same cause of (Page 7)
action was in question in both cases: Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543, 559 (Clarke JA). In the case of judgments and orders by consent it is absolutely essential to refer to the pleadings or affidavits of the parties, if the judgment or order is in a naked and general form, in order to ascertain what, if any, decision of particular questions or issues was impliedly consented or submitted to by the party against whom such consent judgment or order was made: Isaacs v Ocean Accident and Guarantee Corporation Ltd (75). 16 The doctrine of Anshunestoppel as enunciated in the decision in Port of Melbourne Authority v Anshun can be summarised as follows. The parties to an action are expected to bring forward their whole case. If a party in a subsequent action seeks to raise an issue which is clearly part of the subject matter of the earlier action, then it will be an abuse of process to allow the second action. However, the matter relied upon in the second action must be so relevant to the subject matter of the first action that it would have been unreasonable not to raise it: Port of Melbourne Authority v Anshun (598). It would be so unreasonable if the matter was so closely connected with the subject matter of the earlier action that it was to be expected to be relied upon as a basis for defence or recovery. It would also be unreasonable where a judgment entered in the second action would conflict with a judgment entered in the earlier action (even if the causes of action are different). One of the reasons behind the principle of Anshun estoppel is to avoid conflicting judgments which, though they may not be pronounced on the same cause of action, may declare rights which are inconsistent in respect of the same transaction: Port of Melbourne Authority v Anshun (603 - 604). 17 Whether it is unreasonable for a person not to litigate closely related issues in the one action requires consideration of all the relevant facts, including the character of the previous proceeding, the scope of any pleadings, the length and complexity of any trial, any real or reasonably perceived difficulties in raising the relevant claim earlier and any other explanation for the failure to raise the claim previously: Anshun (603); Gibbs v Kinna [1999] 2 VR 19 [28]. 18 The power to dismiss or stay an action as an abuse of process is to be exercised sparingly, upon an examination of the relevant circumstances of the particular case. The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice: Spalla v St George Motor (Page 8)
Finance Ltd (No 6) [70]. In Spalla [70] (applied in Macchia v Public Trustee [33]) French J set out the following factors which should be taken into account (along with any other relevant factors in the case) when considering whether there has been an abuse of process: (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue; (b) the opportunity available and taken to fully litigate the issue; (c) the terms and finality of the finding as to the issue; (d) the identity between the relevant issues in the two proceedings; (e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of - (f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and (g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
The background facts 19 The trial of the preliminary issues proceeded on the basis of an agreed statement of facts, with attached agreed documents. In addition to those facts there was produced in affidavit form, which I admitted after hearing from both parties, evidence of the correspondence leading to the settlement reached between the parties, the execution of the deed of settlement and the consent order for dismissal of the first action. These are the facts which I have taken from these materials. Where possible I have repeated the facts as set out in the agreed statement of facts. Where I have done this I have also shown the paragraph number of the agreed statement of material facts. 20 In or about the period from July to October 2007, issues arose as to the adequacy of the plaintiff's work performance (par 2) in the course of her employment with the defendant. 21 Those issues culminated in the defendant, by letter dated 3 October 2007, assigning the plaintiff to alternative duties at 'Take Time', Herald Avenue, Willetton (par 3). (Page 9)
22 From on or about 12 October 2007, the plaintiff claimed to have suffered a recognised psychiatric condition (diagnosed as an Adjustment Order or a Major Depressive Disorder) (Injury), which the plaintiff alleged had culminated on 16 July 2007 as a result of the conduct towards and the treatment of the plaintiff by the defendant. The plaintiff commenced proceedings in the Dispute Resolution Directorate of WorkCover (SD 602/08) (Workers' Compensation Claim) claiming weekly payments and medical expenses which the plaintiff alleged to have incurred as a result of the Injury (par 4). 23 It is necessary here to observe that the parties (in par 4 of the agreed statement of facts) referred to the injury as having 'culminated' on 16 July 2007 but it appears from other facts that this was not the correct word to use. For something to 'culminate' means that it has peaked or climaxed. Having discussed this with counsel at the trial it seems that what is meant here is that the psychiatric condition (Injury) began on 16 July 2007. 24 The parties settled the Workers' Compensation Claim in November 2008 (par 5). This settlement was achieved following correspondence between the parties and it is necessary to record the substance of that correspondence. 25 By a letter dated 23 October 2008 the solicitors for the defendant made an offer to resolve the plaintiff's claim pursuant to the Workers' Compensation & Injury Management Act 1981 in relation to her alleged psychiatric condition and in respect of any claims for damages at common law arising from that injury. The offer made was that the defendant would pay the plaintiff: 26 Other specified terms in the letter of offer of 23 October 2008 included, relevantly, that: (Page 10)
27 In response to this letter a counter proposal was put by the solicitors for the plaintiff. Details of the counter proposal were set out in a facsimile transmission dated 31 October 2008 to which there was attached a schedule for settlement setting out an amount of $79,964 which the plaintiff would accept as a resolution only of the workers' compensation matters. This sum of $79,964 included arrears of weekly payments of $35,564, a redemption of future weekly payments for 52 weeks, calculated to amount to $23,400, and medical, travel and rehabilitation costs. 28 By a letter dated 5 November 2008 the defendant's solicitors rejected the plaintiff's offer to settle her workers' compensation claim for $79,964. The defendant made a counter-offer to settle all workers' compensation aspects of the claim, including any claims for damages at common law in relation to the alleged injury, for the sum of $55,000 inclusive of costs. 29 The plaintiff's solicitors rejected the counter-offer made by the defendant on the same day and a counter-offer was made by the plaintiff to settle for $70,000 plus costs. 30 On 6 November 2008 the defendant rejected the offer to settle for $70,000 plus costs and a counter-offer was made in a letter from the defendant's solicitors which read as follows: However, entirely without prejudice, we are instructed to make the counter-offer of $100,000 inclusive of costs in order to resolve all workers' compensation aspects of the claim (including any claims for damages at common law in relation to her alleged injury) together with all potential claims under industrial relations law. 31 By letter dated 10 November 2008 the plaintiff's solicitors advised that the plaintiff had rejected the proposal that all issues be settled in consideration of the sum of $100,000, but that the plaintiff wished to settle her workers' compensation claim on the basis which had been (Page 11)
previously proposed by the defendant's solicitor's letter of 5 November 2008, namely that she be paid $55,000 inclusive of costs. 32 That was eventually agreed to and confirmed in a letter from the defendant's solicitors dated 12 November 2008. This letter confirmed that the plaintiff's claim pursuant to the Workers' Compensation and Injury Management Act and in respect of any claim for damages at common law (for which liability was denied) in relation to the alleged psychiatric condition had been settled. The terms included the following: 33 The settlement deed, writ of summons and consent to judgment were all drafted by the defendant's solicitors and enclosed with the letter of 12 November 2008. 34 By writ of summons no 3021 of 2008 dated 1 December 2008, the plaintiff claimed damages from the defendant in respect of the Injury, which was alleged to have been caused by negligence, breach of statutory duty and/or breach of contract by the defendant (Plaintiff's First Action) (par 6). The writ of summons was generally indorsed as follows: 35 The First Action was dismissed on 3 December 2008 (par 7). The Order for dismissal was by consent judgment signed by the solicitors for both parties, and approved by a Registrar of the Court, and provided that: 1. The Plaintiff's action against the Defendant be dismissed. (Page 12)
2. There be no order as to costs. 36 The plaintiff and the defendant executed a written deed of settlement pursuant to s 92(f) of the Workers' Compensation and Injury Management Act dated 8 December 2008 compromising the plaintiff's claims against the defendant in relation to the Injury on terms including the payment by the defendant to the plaintiff of the sum of $55,000 (par 8). 37 The deed of settlement described the plaintiff as the worker and the defendant as the employer. The recited background to the deed was as follows: A The Worker claims to have sustained a recognisable psychiatric condition (diagnosed as an Adjustment Disorder or a Major Depressive Disorder) which culminated on 16 July 2007 as a result of her employment with the Employer ('the injury'); B The Worker has sought payment of compensation from the Employer pursuant to the provisions of the Workers Compensation and Injury Management Act 1981 ('the Act') as a result of the injury ('the workers compensation claim') for which the Employer has declined liability; C The Worker has also issued proceedings against the Employer out of the District Court of Western Australia claiming damages against the Employer in relation to the injury ('the damages claim') in respect of which the Employer denies liability, which proceedings have been dismissed by agreement between the Worker and the Employer; D The parties have agreed that the Employer will pay to the Worker a lump sum settlement of $55,000 ('the Settlement Sum') in full and final settlement and satisfaction of the workers compensation claim and the damages claim and all claims where compensation and damages which the Worker may have against the Employer pursuant to the provisions of the Act and at common law in relation to the injury. 38 The release provided by the plaintiff read as follows: 1.1 In consideration of the Settlement Sum paid by the Employer to the Worker, the Worker discharges the Employer from all claims and demands which the Worker now has or at any time may have or but for the execution of this Deed could or might have had against the Employer for compensation pursuant to the provisions of the Act and for common law damages as a result of the injury. (Page 13)
39 There was also a provision providing that the deed could be pleaded as a bar: 1.3 This Deed may be pleaded in any court as a bar to any action, suit, claim, cause of action or proceeding commenced or at any time to be commenced by any of the parties against one or more of the other parties in respect of the disputes arising out of or incidental to the injury. 40 By letter dated 25 November 2008, the plaintiff tendered her resignation from her employment with the defendant with effect from the date of registration of the deed of settlement pursuant to s 92(f) of the Workers' Compensation and Injury Management Act (par 9). The letter of resignation stated: As my psychiatrist has recommended that I do not return to work with you for the reasons which have been set out in her report dated the 15th May 2008 I HEREBY TENDER my resignation from your employment to take effect upon the registration of the Section 92(f) DEED of SETTLEMENT which I have signed today. 41 The deed of settlement was registered pursuant to s 92(f) of the Workers' Compensation and Injury Management Act on 11 December 2008 (par 10). 42 A very short time after this, on 18 December 2008, the plaintiff commenced this action. 43 There is an observation I need to make about the parties' reference to the deed of settlement having been 'registered' pursuant to s 92(f). Although I understand it is the practice of the Director Dispute Resolution to register these agreements there is, in fact, no statutory registration provided for in s 92(f) (compare s 76 of the Act relating to other settlements impacting on compensation claims). A memorandum of the terms of the settlement by the deed is filed with the Directorate. Once that is done, unless the Director disapproves of the settlement within six weeks, the worker (employee) is prohibited from commencing or continuing a claim for compensation under the Act in respect of the same injury: see Butler v St John of God Health Care Inc [8] - [9]; Australasian Correctional Management v Nydegger [2011] WACC C10-2011 [13] - [17]. 44 Where such a settlement is reached between a worker and employer, the settlement terms may be stated to also preclude a claim for common law damages for the same injury. Damages may be awarded against an (Page 14)
employer independently of the Act, subject to the constraints set out in pt IV div 2 of the Act. That division of the Act applies even if the damages resulting from the negligence or other tort of the employer are sought to be recovered in an action for breach of contract or other action: s 93B(2) of the Act. In this case the settlement was to resolve both the plaintiff's claim for worker's compensation and common law damages for the psychiatric condition and the defendant's solicitors drafted the indorsement on the writ in the first action to include negligence, breach of statutory duty and breach of contract.
The statement of claim in this action 45 The amended statement of claim in this action is lengthy and not easy to follow. 46 In summary, what is claimed is that the defendant breached the contract of employment between it and the plaintiff because it failed to comply with its own policies when dealing with the plaintiff. Those two policies were a Grievance Resolution Policy and a Termination Policy which, it is alleged, became terms of the employment contract. 47 The background facts as pleaded (amended statement of claim pars 9 to 20) are that on 16 July 2007, after returning from annual leave, the plaintiff was called into a meeting with her supervisor who made an allegation against her. On 9 August 2007 the plaintiff was suspended from work without notice. On 15 August 2007 the plaintiff was called to the office of the defendant and handed a letter which set out four matters alleged by the defendant to constitute misconduct by the plaintiff. That letter called for the plaintiff's response by 24 August 2007, which she gave. The defendant then engaged another person to produce a written report into the allegations of misconduct made against the plaintiff. Following that report, the defendant, by a letter of 3 October 2007 advised the plaintiff of certain matters and directed her to report to a new position at Take Time at Herald Avenue, Willetton. It is alleged that this was in effect a demotion for the plaintiff, resulting in a reduction of her salary. The plaintiff claims that the actions which the defendant took were in breach of the employment contract because the defendant had not followed the steps which ought to have been taken under the Grievance Resolution Policy (par 21). 48 It is then pleaded that between 16 July 2007 and 24 June 2008 the plaintiff was subjected to 'bullying and harassment' by the defendant. There are pleaded a number of material facts, 27 in total, in the amended statement of claim, par 22, relevant to the claim of bullying and (Page 15)
harassment. In relation to many of these material facts it is said that certain things which happened in the workplace were humiliating to or humiliated the plaintiff (pars 22.3, 22.7, 22.14, 22.16), or made the plaintiff 'feel victimised' (par 22.4) or 'intimidated, victimised, offended, degraded and humiliated' (pars 22.9, 22.10, 22.11, 22.12, 22.15, 22.17, 22.18, 22.19, 22.20, 22.21, 22.22, 22.23, 22.24, 22.25, 22.26 and 22.27). The statement of claim pleads that the plaintiff complained to her supervisor that she was being subjected to harassment and bullying in the workplace and as a consequence was made to feel 'intimidated, victimised, offended, degraded and humiliated' (par 23). It is then alleged that the supervisor took no action following the plaintiff's complaint. This failure to take action following the plaintiff's complaint and all of the conduct said to constitute the 'bullying and harassment' are alleged to have been a breach of the Grievance Resolution Policy and, therefore, the employment contract (pars 24, 25 and 30). 49 The statement of claim then turns to the provisions of the Termination Policy, setting out the basis upon which the defendant could dismiss an employee and the procedural steps which had to be followed before any dismissal (par 27). It is alleged that the defendant terminated the plaintiff from her employment on 11 December 2008 and when it did so, it did not have a lawful reason to do so and failed to comply with the procedural steps under the Termination Policy (pars 28 and 29). It is specifically pleaded as a particular of the termination (par 28) that the plaintiff's letter of resignation dated 25 November 2008 was not voluntary and was caused by the defendant's conduct in harassing and bullying her and the defendant's breaches of its policies. What is claimed, in essence, is that the plaintiff's resignation was in effect a constructive dismissal and the defendant wrongfully terminated her employment. It is also claimed that the defendant's decision to suspend the plaintiff (on 9 August 2001) was in breach of the terms of the employment contract (par 30). 50 The damages claimed by the plaintiff as a result of these breaches are (par 31): (Page 16)
51 There is no claim for damages for psychiatric injury.
Is the plaintiff estopped by the deed of settlement from bringing the present action? 52 The deed of settlement made pursuant to s 92(f) of the Workers Compensation and Injury Management Act is effective to bar the plaintiff from pursuing a claim for damages for the same injury in a subsequent action: Butler v St John of God Health Care [9] - [10] (Buss JA) and [50] (Newnes AJA). 53 It has been submitted on behalf of the plaintiff that she is not pursuing a claim for damages for the same injury as settled by the terms of the deed. The deed of settlement settled only a claim in respect of the injury as defined, namely the psychiatric condition, and the claims in this action are of a different nature, dealing with a different subject matter. The psychiatric condition has nothing to do with the defendant's breaches of contract, nor the damages which subsequently arose and are claimed in this action. 54 The defendant has argued that the deed of settlement provides a complete defence to this action. Upon a proper construction of cl 1.1 and cl 1.3 of the deed the plaintiff released any claim or cause of action that she had 'arising out of or incidental to the injury' and that means any claim in connection with the injury. 55 The deed produces some ambiguity because the words in cl 1.1 and cl 1.3 are different. The release given by the plaintiff is for any claim that she could or might have had against the defendant either for compensation pursuant to the Act or for common law damages 'as a result of the injury'. The bar in cl 1.3 of the deed is a bar in respect of the disputes 'arising out of and incidental to the injury'. There is a different meaning of the words used in the deed in cl 1.1 compared to the words used in cl 1.3. 56 The phrase 'as a result of' has been held to import the commonsense notation of causation, so that there must be a causal connection between the claims in this action and the injury: F & D Normoyle Pty Ltd v (Page 17)
Transfield Pty Ltd (2005) 63 NSWLR 592 [90]; Gardiner v Agricultural & Rural Finance Pty Ltd [2007] NSWCA 235. 57 'Arising out of' has been held to connote a wider connection or radius of causal proximity then the words 'caused by' which requires a direct or proximate causal relationship. Unlike 'caused by', the phrase 'arising out of' is not analogous to or reliant on the common law doctrine of causation: Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500, 505. There is no easy test for the nature or extent of the causal or consequential relationship involved in the words 'arising out of'. The relationship should not be remote, but must still be one of substance albeit less than that required by words such as 'caused by' or 'as a result of'. Beyond that, it is a question of judgment on the particular facts: Butler v St John of God Health Care [39]. 58 As to the phrase 'incidental to', in McDonald v Deputy Commissioner of Taxation (2005) 187 FLR 461; (2005) 23 ACLC 324; [2005] NSWSC 2 the words 'of and incidental to the winding up', when used in s 512 of the Corporations Act 2001 (Cth), were held to be capable of referring to matters forming part of the winding up, or intimately connected with it. 59 In my view the words 'arising out of or incidental to' as used in cl 1.3 of the deed require the claims in this action to have some relationship or connection with the injury. Although it does not have to be a causal connection, there must still be a close connection of some kind. 60 The words 'as a result of' and 'arising out of or incidental to' in each of cl 1.1 and cl 1.3 cannot be read in isolation. In each clause the connected words refer to the 'injury' which is specifically defined as the psychiatric condition. Accordingly, for the release in cl 1.1 to preclude the current action brought by the plaintiff, her claims must be for common law damages 'as a result of the injury', meaning that there must be a causal connection between the claims for damages in this action and the psychiatric condition. For the bar in cl 1.3 to operate the claims made in this action must in some way be closely connected with the psychiatric condition. 61 The defendant has argued that there is a connection between the psychiatric condition and the present claims in this action, as they both arise out of the same factual background. This is illustrated by the pleading of the bullying and harassment of the plaintiff in the amended statement of claim (par 22). What gave rise to the psychiatric condition, (Page 18)
as set out in the agreed statement of facts, was the 'conduct towards and the treatment of the plaintiff by the defendant' from the period from July to October 2007. That conduct and treatment began because of the matter of the plaintiff's performance at work. It is submitted these are essentially the same facts which have been pleaded in this action (albeit in far more detail), particularly the pleaded 'bullying and harassment' conduct by the defendant from and after 16 July 2007 until 3 October 2007. (In the amended statement of claim par 22 there are matters pleaded relating to alleged events after 3 October 2007). 62 The defendant also pointed to the correspondence leading to the settlement and the schedule provided by the plaintiff's solicitors which included a claim for future compensation for 52 weeks. In the plaintiff's particulars of loss and damage filed in this action, the damages claimed include loss of earnings for the same period. In the settlement as recorded in the correspondence and deed, the amount recovered for future compensation was not stipulated, and it is apparent from the final settlement sum, which was less than that offered by the plaintiff when her claim for future compensation was calculated, that she did not receive all of her claim for future compensation. The defendant, however, pointed to an overlap between what was settled and the claims maintained in this action (with no attempt by the plaintiff to carve out amounts previously received). 63 Even though there is common factual background to both the plaintiff's claim that she suffered from a psychiatric condition and the claims in this action, and some overlap in the damages as pointed out by the defendant, in my view there is no causal connection between the claims in this action and the psychiatric condition, as required in relation to the release, cl 1.1 of the deed. Further I consider that the bar in cl 1.3 does not operate to preclude the claims in this action. While par 22 of the amended statement of claim refers to the plaintiff feeling intimidated, victimised, offended, degraded and humiliated, in my view those words and how the plaintiff felt are pleaded to establish the reasons why the plaintiff complained to her supervisor that she was being harassed and bullied in the workplace. The plaintiff's present action arises from the defendant's failure to take action and deal with the plaintiff's grievance and how the termination of the plaintiff's employment came about. The issues are whether the defendant breached the employment contract by failing to follow its policies and wrongfully terminated the plaintiff's employment. Whether or not the plaintiff suffered a psychiatric condition as a consequence of the way she was dealt with in the workplace will not determine those contractual issues. The plaintiff's claims for damages in (Page 19)
this action do not depend on proof that the defendant caused her psychiatric condition. 64 The expressed intention in the deed was that the plaintiff was settling her claim for damages for the psychiatric condition. Only the claimed psychiatric condition is referred to as the injury and it is the claim for the injury which is released. There is no mention of settling any industrial relations law claim or any other matters arising out of the plaintiff's employment with the defendant: compare Butler v St John of God Health Care [15], [41] - [48]. Those matters are not specifically released. 65 That is confirmed by the correspondence leading to the settlement. The settlement sum agreed to for the settlement of the plaintiff's claimed psychiatric condition was for an amount less than that offered by the defendant to settle all matters, that is both the psychiatric condition and the claims under industrial relations law. It was also specifically stipulated in the letter of 23 October 2008 from the defendant's solicitors that if both the psychiatric condition and industrial relations law claims were settled, a separate and additional deed would be required to release the industrial law claims. 66 The defendant has argued that, as set out in the correspondence, the plaintiff would be free to pursue only what is referred to as potential claims under 'industrial relations law' and what is now being pursued in this action is not a claim under industrial relations law. In my view there is no merit to this submission for the following reasons. 67 First, a dispute between a former employer and an ex-employee in the nature of a claim for damages for breach of contract relating to the dismissal of the ex-employee can be characterised as an industrial matter, although there is a limit to what is and what is not an industrial matter in the master/servant context for the purposes of the Industrial Relations Act1979 and an issue as to whether the Industrial Relations Commission has jurisdiction to grant appropriate relief: see HotCopper Australia Ltd v SAAB (2002) 117 IR 256; [2002] WASCA 190 [24] - [28] (Anderson J) and Matthews v Cool or Cosy Pty Ltd (2004) 136 IR 156; [2004] WASCA 114 [13] - [28] (Steytler P) and [53] and [54] (Pullin JA). 68 Secondly, in the context of the settlement negotiations, in my view a reasonable person would understand reference to 'a claim under industrial relations law' to mean a claim for damages arising from disputes under the employment contract other than damages for the psychiatric condition. (Page 20)
69 Thirdly, as shown by the correspondence the defendant knew that what was being released was only the workers' compensation claim and common law damages claim in respect of the psychiatric condition. As an equitable principle, the defendant must not use the general words of the release in the deed as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction: Grant v John Grant & Sons (129). To do so, using the words in Grant v John Grant & Sons (130) is 'unconscientious'. 70 Finally, it is necessary to return to the words of the deed of settlement. There is the recital of the dispute, which refers only to the psychiatric condition, defined as 'the injury'. That may be enough to speak of the intention to settle only claims relating to that matter: Grant v John Grant & Sons (129, 131). The operative words in cl 1.1 also confine the release to claims for workers' compensation and common law damages as a result of 'the injury'. To give these words the construction for which the defendant argues would be to construe the release in cl 1.1 as extending to damages as a result of any breach by the defendant of the employment contract. Similarly, to give the words 'the disputes arising out of and incidental to the injury' in cl 1.3 the construction which the defendant argues, so as to preclude the plaintiff from bringing her claims in this action, would be to construe the words in cl 1.3 to 'disputes arising out of and incidental to the plaintiff's employment'. This is far a wider operation than the parties intended and expressed in the deed and would result in a consequence to the plaintiff which she, as the party providing the release and agreeing to the bar, did not actually intend. 71 I find that the language of the deed in confining the release to claims 'as a result of the injury' and the bar to claims in respect of disputes 'arising out of and incidental to the injury' precludes the plaintiff from bringing claims for damages for her psychiatric condition, but does not preclude the plaintiff from bringing other claims for damages arising from an alleged breach or breaches of the employment contract relating to the suspension and termination of her employment. The claims in this action do not result from or arise out of the psychiatric condition. 72 In my view the plaintiff is not estopped by the deed of settlement in bringing this action. To the first question which I must decide as a preliminary issue 'Is the plaintiff estopped by the deed of settlement from maintaining her claims in this action?' the answer is 'No'. (Page 21)
Is the present action an abuse of process? 73 As to whether this action is an abuse of process, it is necessary to examine the factual circumstances relied upon to establish the right to relief in each of the first action and this action, to determine whether there is a sufficient identity between them to conclude that the same cause of action was in question in both. 74 The plaintiff's claim in the first action as set out in the writ was for damages in respect of the psychiatric condition. This allegedly arose by reason of the defendant's negligence and/or breach of statutory duty and/or breach of contract. 75 The plaintiff's claims in this action, as pleaded, are for breaches of contract. There is no claim in negligence or breach of statutory duty. The alleged breaches of contract relate to the termination of the plaintiff's employment and raise questions of whether the defendant breached the terms of the employment contract in failing to follow its Grievance Resolution Policy and Termination Policy, whether the plaintiff's resignation was voluntary or a constructive dismissal, and whether or not the defendant had a lawful reason to terminate the plaintiff's employment. 76 To support a right to judgment in this action, factually the plaintiff will have to prove that the defendant did not comply with its Grievance Resolution Policy and Termination Policy when dealing with her. So far as some of the facts which will be litigated between the parties in this action are the same as those facts which were relevant to the claim that the plaintiff suffered from the psychiatric condition, particularly those pleaded in par 22 of the amended statement of claim, they will be litigated for a different purpose, and to prove a different issue: Jackson v Goldsmith (463). As I have already observed when discussing the deed of settlement, whether or not the plaintiff suffered a psychiatric condition will not determine the contractual issues in this action. 77 The rights of the plaintiff which are said to have been infringed in this action are the right to have the allegations of misconduct against her properly dealt with, the right to have her grievance dealt with under the Grievance Resolution Policy and the right to have the termination procedures under the Termination Policy followed (which, if followed, might have enabled the plaintiff to address the misconduct alleged against her). These rights, as is apparent from the indorsed writ in the first action, were not addressed in the first action nor are they the subject of the judgment in the first action. This is confirmed by the evidence of the correspondence leading to the deed of settlement and the issue of the writ. (Page 22)
78 The substance of this action is also, in my view, different from the first action. What was finalised by the consent judgment in the first action was, as set out in the writ, damages only in respect of the psychiatric condition from which the plaintiff claimed to have suffered. That is in substance different from the alleged breaches of contract now raised in this action. 79 Whether the 'cause of action' is the facts which support a right to judgment, a right which has been infringed, or the substance of an action as distinct from its form, I find that the causes of action in this action were not were not agitated or determined in the first action, nor was it intended by the parties that these would be agitated or determined in the first action. In my view it cannot be said that the plaintiff is endeavouring to re-litigate the same cause of action from the first action in this action. 80 On the issue of damages, if the plaintiff continues to claim damages for a period for which she has already received payment pursuant to the deed of settlement, there is no doubt that the defendant can raise this in its defence. This does not, in my view, mean that the same issues and questions in this action, including damages, were dealt with in the first action. I consider that the issues in the two actions involve different questions and considerations. 81 In these circumstances I do not consider any res judicata or issue estoppel arises. 82 So far as Anshun estoppel is concerned I find that it was not unreasonable for the plaintiff not to have litigated the issues in this action in the first action. I find that there is a reasonable explanation for why the plaintiff did not, in the first action dealing with the claim for damages for the psychiatric condition, include her claims for the other alleged breaches of the employment contract and the termination of her employment. She did not do so because it was expressly agreed that she was only settling her claim for workers' compensation and common law damages for the psychiatric condition. The amount for which the plaintiff settled that claim was for an amount less than that offered by the defendant to settle all matters, that is both the psychiatric condition and the claims under industrial relations law. It had been stipulated by the defendant in the correspondence negotiating the settlement, that if the claims or 'potential claims' under industrial relations law were also settled, a separate deed of settlement would be prepared. The plaintiff's claims or 'potential claims' under industrial relations law were not settled. The only deed prepared related to settlement of the claim for the psychiatric (Page 23)
condition. Further, it was stipulated by the defendant that the plaintiff would issue a writ and have that action dismissed. In fact, the writ was drafted by the defendant's solicitors. As drafted, the indorsement on the writ was confined to the plaintiff's claim for damages in respect of the psychiatric condition. In my view it is disingenuous of the defendant to now contend that the claimed breaches of contract in this action could and should have been brought forward as part of the first action. 83 I also do not consider that the judgment in the first action dismissing the plaintiff's claim for damages for the psychiatric condition will result in any conflict should the plaintiff succeed and obtain judgment in this action. In my view it would not be inconsistent to find that a plaintiff had suffered damage by reason of the wrongful termination of his or her employment, while finding that person did not suffer any recognised psychiatric injury by reason of what occurred in the workplace. 84 Applying the factors set out in Spalla: (a) The issue in the first action was whether the plaintiff had suffered from the psychiatric condition and her entitlement to damages for that condition. The issue of the way the plaintiff was treated in the course of her employment is an evidentiary issue common to both the first action and this action, however, it is not the ultimate issue. The ultimate issue or issues in this action is whether the defendant breached the contract of employment in failing to follow its policies, constructively dismissed the plaintiff and wrongfully terminated her employment; (b) Given the terms of the settlement reached and the circumstances in which the first action was commenced and then, by consent, dismissed, the plaintiff has had no opportunity to fully litigate the issues in this action; (c) The first action determined only the issue of the psychiatric condition allegedly suffered by the plaintiff and damages relating to that psychiatric condition. The terms of the agreed settlement and deed of release, the writ and the consent judgment were confined to the plaintiff's claim for the psychiatric condition. The issues of whether the defendant breached its policies when dealing with the plaintiff, constructively dismissed the plaintiff and wrongfully terminated her employment were not the subject of the first action and are yet to be determined. Accordingly there has been no finding as to the issues in this action; (Page 24)
(d) The relevant issues in the two actions are not identical; (e) Factually there is some overlap in the evidence relevant to the issues in the first action and in these actions, but the questions and issues in this action were not part of the first action; (f) Upon an examination of the circumstances of this particular case, in my view there will be no oppression and unfairness to the defendant if the plaintiff continues with this action. In fact, I consider that the integrity of the system of administration of justice would be called into question if, in the circumstances of this case, the plaintiff was not permitted to proceed with the current action and the defendant could now raise abuse of process as a defence; and (g) On an overall balancing of justice to the plaintiff against the matters supportive of abuse of process raised by the defendant, the balance of justice in this case favours the plaintiff. 85 Having regard to all of these matters, I find that this action is not an abuse of process. To the second question which I must decide as a preliminary issue 'Is this action an abuse of process?' the answer is 'No'. |