Cork v AAL Aviation Limited

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FEDERAL COURT OF AUSTRALIA

Cork v AAL Aviation Limited [2014] FCA 1085

Citation: Cork v AAL Aviation Limited [2014] FCA 1085
Parties:

BERNARD LAWRENCE CORK v AAL AVIATION LIMITED (ACN 008 642 886)

MARK LESLIE BEST v AAL AVIATION LIMITED (ACN 008 642 886)

GARRY EDWARD KEAR v AAL AVIATION LIMITED (ACN 008 642 886)

GREGORY DAVID BROWN v AAL AVIATION LIMITED (ACN 008 642 886)

KEVIN JOHN BREWER v AAL AVIATION LIMITED (ACN 008 642 886)

File numbers: ACD 10 of 2012
ACD 11 of 2012
ACD 24 of 2012
ACD 25 of 2012
ACD 87 of 2012
Judge: FOSTER J
Date of judgment: 8 October 2014
Catchwords: LIMITATION OF ACTIONS – whether an application to amend a Statement of Claim to include claims for damages for breach of contract should be refused because the amendment is futile for the reason that, in the circumstances of the particular case, all breaches of contract relied upon by the applicant occurred more than 30 years before the relevant proceeding was instituted with the consequence that all claims were statute-barred by reason of the operation of s 51(1) of the Limitation Act 1969 (NSW) (the ultimate bar) notwithstanding that the applicant sought to argue that the ultimate bar was postponed on account of the fraudulent concealment of his cause of action by the respondent – whether the ultimate bar can be postponed by reason of fraudulent concealment or unconscionable reliance upon the Limitation Act
Legislation:

Australian Airlines (Conversion to Public Company) Act 1988 (Cth)
Australian National Airlines Act 1945 (Cth)
Federal Court of Australia Act 1976 (Cth), Pt IVA
Interpretation Act 1987 (NSW), s 34
Limitation Act 1969 (NSW), ss 14, 51, 52–56, 58, 59, 60, Pt 2 and Pt 3 (generally)
Limitation (Amendment) Act 1990 (NSW)
Superannuation Act 1922 (Cth)
Superannuation Act 1976 (Cth)

Federal Court Rules 2011, r 8.22 and r 16.53

Cases cited:

Cheney v Duncan (2001) 34 MVR 28, [2001] NSWCA 197
Commonwealth Bank of Australia v Barker [2014] HCA 32
Commonwealth Bank of Australia v Barker (2013) 214 FCR 450
Commonwealth v Cornwell (2007) 229 CLR 519
Hawkins v Clayton (1988) 164 CLR 539
Kennedy v Beckman [2008] BCSC 323
McRae v Royal Trust Corp of Canada [1992] BCJ No 2036

Sampson v Zucker (unreported, Court of Appeal, NSW 11 December 1990, BC9606395)  
Weldon v Neal (1887) 19 QBD 394

Meagher RP, Heydon D and Leeming M, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (4th ed, Butterworths LexisNexis, 2002)

Date of hearing: 11 October 2013 and thereafter decided on the papers
Date of last submissions: 27 November 2013
Place: Sydney (via video link to Canberra) (heard in Canberra)
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 76
Counsel for the Applicants: Mr JRC Gordon
Solicitor for the Applicants: Snedden Hall & Gallop
Counsel for the Respondent: Mr M Speakman SC
Solicitor for the Respondent: Johnson Winter & Slattery

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

GENERAL DIVISION

ACD 10…

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Details
Case
[2014] FCA 1085
Decision Date

CaseChat Overview and Summary

In the Federal Court, Cork sought to amend his Statement of Claim to include claims for damages for breach of contract against AAL Aviation Limited. The dispute centred around whether the court should allow an amendment to the Statement of Claim given that the claims for breach of contract were statute-barred under s 51(1) of the Limitation Act 1969 (NSW). Cork argued that the limitation period was postponed due to the fraudulent concealment of his cause of action by AAL. The court needed to determine whether the ultimate bar could be postponed on the basis of fraudulent concealment.

The court addressed the relevance of r 8.22 and r 16.53 of the Federal Court Rules 2011, finding both rules irrelevant to the present problem. The court further examined whether the implied term of mutual trust and confidence in an employment contract, which was pleaded in the proposed Further Amended Statement of Claim, was valid. It noted that the Full Court's decision in Commonwealth Bank of Australia v Barker, which implied such a term, had been overturned by the High Court, which held that no such term should be implied in Australian law. Consequently, the court declined to grant leave to Cork to plead such a term.

For the aforementioned reasons, the court proposed to refuse leave to Cork to plead the contract case in his proposed Further Amended Statement of Claim, but granted leave for other matters, subject to AAL's reservation of rights. The court ordered the parties to confer immediately to agree on a set of orders for each matter, which should be made on the next listed date. The court also noted that costs of the argument concerning the proposed contract case should follow the event.

Orders

Orders of the court

1. The parties immediately confer with a view to agreeing orders in order to give effect to these Reasons for Judgment.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Lastly, Mr Cork relied upon r 8.22 and r 16.53 of the Federal Court Rules 2011. Rule 8.22 is irrelevant. It addresses the date upon which an amendment constituted by the substitution of one party for another is to take effect. Rule 16.53 is also irrelevant. At best, it may be used to overcome the rule in Weldon v Neal (1887) 19 QBD 394. The present problem does not concern that rule. The present difficulty for Mr Cork is that his cause of action for breach of contract was statute-barred at the time when it was commenced in February 2012. CONCLUSIONS For all of the above reasons, I propose to refuse leave to Mr Cork to plead the contract case contained in his proposed Further Amended Statement of Claim. He should have leave to plead the other matters set out in his proposed Further Amended Statement of Claim subject to AAL’s reservation of rights to which I have referred at [33] above in relation to the proposed action in deceit. There should be the usual costs order in respect of costs thrown away by the amendments. I think that costs of the argument before me concerning Mr Cork’s proposed contract case should follow the event—that is to say, Mr Cork should pay the costs of and incidental to that argument. There will need to be consequential orders for the filing of an Amended Defence and perhaps for dealing with other matters such as particulars. In addition, orders will need to be made in the other four proceedings commenced in 2012. There will also be a need to consider the impact of this judgment on the other four matters viz the 2013 and 2014 proceedings. I have already listed all matters of which I am aware before me on Friday next, 10 October 2014, for directions. All I will do at the moment is to order the parties immediately to confer with a view to agreeing a set of orders for each of those matters, in the expectation that the orders can be made on Friday next.

Ratio Decidendi

Legal Principle Established

AAL does not oppose any of the other amendments contained in Mr Cork’s proposed Further Amended Statement of Claim including those amendments which raise for the first time the tort of deceit. In respect of that matter, AAL seeks an order from the Court that any leave to amend should be on terms that it is without prejudice to the right of AAL to take any limitation points arising in respect of any amendment and in respect of the date of effect of any amendment. I take that application to be an application for an order preserving to the trial the question of whether Mr Cork’s case in deceit was already statute-barred at the time that he first raised his intention to plead a cause of action based in deceit or possibly at an earlier time eg prior to the commencement of his proceeding. I think that such an order as sought by AAL should be made. CONSIDERATION A preliminary point arises. At the time when Mr Cork’s application for leave to amend was argued before me and at the time when I reserved my decision on that application, I was bound to follow the decision of the Full Court in Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 in which, by majority, the Full Court held that, ordinarily, under Australian law, there is an implied term of mutual trust and confidence in a contract of employment so that an employer must not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. This term was held by the Full Court to be implied as a matter of law. On 10 September 2014, the High Court overturned that decision (Commonwealth Bank of Australia v Barker [2014] HCA 32). All of the Justices of the High Court agreed that, in Australia, no such term should be implied into contracts of employment as a matter of law. In the initial Written Submission filed on Mr Cork’s behalf, Counsel for Mr Cork tied the implied term pleaded in par 4(b) of the proposed Further Amended Statement of Claim to the implied term of mutual trust and confidence relied upon by Mr Barker in Commonwealth Bank of Australia v Barker. Although the articulation of the implied term in par 4(b) of Mr Cork’s proposed Further Amended Statement of Claim may be thought to go beyond the implied term relied upon by Mr Barker in Commonwealth Bank of Australia v Barker, in light of the submissions made on behalf of Mr Cork, I am satisfied that the implied term pleaded in Mr Cork’s proceeding was intended to encompass but go no further than the implied term relied upon by Mr Barker in Commonwealth Bank of Australia v Barker. In those circumstances, although the parties have not had an opportunity to address this point, the High Court has authoritatively determined that no such implied term exists in Australian law. I am bound to apply that authority and thus am bound to decline to grant leave to Mr Cork to plead such a term on the ground that such a pleading is bad in law. Accordingly, for these reasons, I would refuse leave to amend to include par 4(b).