Crawford v CKNR Pty Ltd Trading as Coasteel Buildings
[2011] FMCA 936
•11 November 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CRAWFORD v CKNR PTY LTD TRADING AS COASTEEL BUILDINGS | [2011] FMCA 936 |
| INDUSTRIAL LAW – Application alleging contravention of a general protection under the Fair Work Act 2009 – applicant seeks only to prosecute claim for final relief in respect of a sham contract allegation – application by respondent for summary dismissal. COSTS – Whether respondent entitled to costs – consideration of whether proceedings instituted vexatiously or without reasonable cause – whether evidence constituted representation for purposes of s.357 of the Fair Work Act 2009. |
| Conciliation and Arbitration Act 1904-1975 (Cth), s.197A Fair Work Act 2009 (Cth), s.357. s.357(1), s.570 Workplace Relations Act 1996 (Cth), s.824 Federal Magistrate's Court Rules 2001 |
| Dowling v Fairfax Media Publications Pty Limited (2009) 182 IR 28 Heidt v Chrysler Australia (1976) 26 FLR 257 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 |
| Applicant: | LENORE FLORENCE CRAWFORD |
| Respondent: | CKNR PTY LTD TRADING AS COASTEEL BUILDINGS |
| File Number: | BRG 858 of 2011 |
| Judgment of: | Burnett FM |
| Hearing date: | 11 November 2011 |
| Date of Last Submission: | 11 November 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 11 November 2011 |
REPRESENTATION
| Counsel for the Applicant: |
| Solicitors for the Applicant: | Carroll Alexander & Associates |
| Counsel for the Respondent: | Mr J.W. Merrell |
| Solicitors for the Respondent: | Aitken Legal Pty Ltd |
ORDERS
That in respect of the application in a case filed 24 October 2011 and pursuant to rule 13.10 Federal Magistrate's Court Rules, the application filed on 29 September 2011 is dismissed.
That the applicant pay the respondent’s costs of and incidental to the application filed 29 September 2011 and 24 October 2011 which such costs are assessed at $5,463.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 858 of 2011
| LENORE FLORENCE CRAWFORD |
Applicant
And
| CKNR PTY LTD TRADING AS COASTEEL BUILDINGS |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
In this application, being an application in a case, the respondent whom I will refer to as Coasteel, seeks an order for summary dismissal of the principal applicant’s claims, that is Ms Crawford, whom I will refer to as Ms Crawford. Ms Crawford in the principal application seeks orders following an allegation of contravention of a general protection under the Fair Work Act 2009 (the Act). The application, in part, is particularised in part (g) of the form 2 which included paragraphs 1 to 5 initially, but which paragraphs have subsequently been struck out and their claims discontinued leaving only a claim for final relief which, in part, alleges that the applicant, being Ms Crawford, be deemed an employee and not a contractor as claimed by Coasteel (see s.357 of the Fair Work Act 2009 – sham arrangement).
Given that Ms Crawford no longer proposes to prosecute paragraphs 1 to 5 of her principal application, the only issue for determination is whether or not the application by Coasteel for summary dismissal ought be allowed in respect of the sham contracting allegation. Relevantly, s.357 of the Act provides that:
“A person that employs an individual must not represent to the individual that the employment contract under which the individual is employed is a contract for services under which the individual performs work as an independent contractor”.
The relevant elements giving rise to a contravention were expressed in the outline presented by Mr Merrell who appeared for Coasteel, and broadly are these. First, a person who is an employer must employ or propose to employ an employee; the employer must have represented to the employee that the contract of employment under which employees would be employed, is a contract for services; and, under that contract for services, the employee performs work or would perform work as an independent contractor.
The question of employment, in one sense, is a question pregnant with the answer which ultimately has to be determined. That is, whether or not, of course, there is a master/servant arrangement in place. In any event, in this instance, the evidence which is relied upon in support of the claim here is fairly sparse.
Paragraph 35 of Ms Crawford’s affidavit supports the initial alleged instance of contravention and, in a temporal sense, relates to the time at which the sham contracting arrangement is alleged to have occurred.
It simply states that when Coasteel took over a business formerly operated by another operator, she, that is Ms Crawford, asked what the terms of her employment would be and she was told that they would continue unchanged “end of story”, except that, Karen Berg for Coasteel, said that she would increase my hourly rate of pay. Ms Crawford said that she was never employed as a contractor before the respondent Coasteel became her employer nor afterwards and that there had not been any hint that she was anything other than an employee.That is the only evidence Ms Crawford alleges in support of a contravention under s.357, at least from the time of commencement of the arrangement between she and Coasteel.
In his outline, Mr Merrell in my view correctly contends that the evidence as it stands does not constitute a representation which is required to be made by a person that employs an individual, that the contract of employment under which the individual is employed is a contract for services under which the individual in fact performed work as an independent contractor. The matter is addressed only as a term of whatever underlying arrangement might exist. The representation so alleged simply does not get across the line as a representation and on that basis, in my view, the first claim must fail.
The second instance alleging a relevant representation is contained in paragraph 50 of Ms Crawford’s affidavit. There she states Coasteel was fully aware that they had paid annual leave because in February 2007 she negotiated an alteration to her employment terms such that although she was still expected to do 35 hours each week, she was permitted to do 38 hours in four days each week rather than five, and she also negotiated that she was to receive six weeks annual leave instead of four weeks which she had received to that time.
Again, the words stated do not, in my view, objectively considered constitute a representation for the purposes of s.357(1) and as with the above allegation addresses only a term of some arrangement and on that basis it seems to me that no claim for a contravention of that provision has any reasonable prospects of success. It follows, in my view, that the application by Coasteel for dismissal of what remains of the principal application ought be allowed and the application is dismissed.
In saying that, I have given some consideration as to whether or not the application might have some prospect of being revived, but I am mindful that in the context of the present application, the application and the material in support of the application is principally directed to the general protections contraventions that were alleged by Ms Crawford against Coasteel. It seems from my reading of the material that the sham contract allegation is one which follows as an afterthought rather than as a principal source of relief. It has not been clearly expressed and for that reason I have taken a stricter view of the material than one might be more inclined to do if the material had been more expansive. I am certainly satisfied that for the time being on the material placed before the court that there is insufficient in the material as it is expressed to support a cause of action, but as to whether indeed there may be a cause of action is a matter which will be left for determination on another day and, in my view, appropriately brought in a fresh application where if indeed there is a basis for a claim under s.357, it will be the focal point of the material in the application and not simply an addendum or afterthought as it appears to have been in this instance.
So in the result, the application will be allowed. I will direct that the application filed 29 September 2011 be dismissed.
Coasteel also seek costs. The relevant provisions are contained in s.570 of the Act which largely mirror the provisions which existed under the earlier enactment Workplace Relations Act1996 (Cth) s.824 and for present purposes I think authorities in respect of which can sufficiently inform the exercise of the discretion in this case. In broad terms, s.570(1) provides the party to proceedings in a court exercising jurisdiction under the Act may be ordered by a court to pay costs incurred by another party to the proceedings, but only in accordance with ss.(2).
Subsection (2) provides that the party may be ordered to pay costs only if, materially in this instance, the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause. The repealed provisions of the Workplace Relations Act, those matters have been the subject of some consideration.
In Dowling v Fairfax Media Publications Pty Limited (2009) 182 IR 28, Moore J observed in these terms:
“In considering whether a proceeding was instituted vexatiously or without reasonable cause for the purpose of section 824(1), it is necessary to distinguish between the situation where an applicant has merely been successful on the case he or she has sought to propound and the situation where the applicant’s case was entirely misconceived. In relation to the former category, an application is not commenced without reasonable cause simply because the applicant’s arguments are rejected by the court. However, in relation to the latter category, it is likely that it can be said that the proceeding was instituted without reasonable cause, such that a costs award is appropriate”.
In that judgment, his Honour referred to the comments of Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 and in ascertaining whether a proceeding was instituted without reasonable cause, he noted that as his Honour said, that is Wilcox J said:
“It seems to me that one way of testing whether a proceeding is instituted without reasonable cause is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being without reasonable cause. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause”.
Continuing, his Honour Wilcox J noted with approval the observations in Heidt v Chrysler Australia (1976) 26 FLR 257 where Northrop J said the following in respect of s.197A of the then Conciliation and Arbitration Act 1904-1975 (Cth), which was substantially in the same terms of s.824(1) of the Workplace Relations Act. There, Northrop J stated:
“In considering this matter the court must have regard to all the material properly before it. The test is not subjective to the party instituting the proceedings as at the time of the institution of the proceedings. The conduct of the opposing party prior to the institution of the proceedings may be relevant in deciding whether the proceedings were instituted vexatiously or without reasonable cause. The conduct of the opposing party both prior and subsequent to the institution of proceedings may be relevant to the discretion remaining in the court. It may be difficult to satisfy the test where disputed questions of fact arise and the proceedings eventually are dismissed because the court finds facts adverse to the party instituting the proceedings. Where the test is satisfied, having regard to the general policy of the section, the court may, nevertheless, in the exercise of its discretion, make no order as to costs”.
For reasons that I have outlined earlier, this is a case where it seems, at least in terms of that part of the action which was proceeded with today, the underlying facts, at least as they have been informed to the court, do not and did not support the contravention alleged. That is a matter that ought to have been apparent to the principal applicant and/or her advisers at the time the application was commenced and it seems to me that having regard to the analysis of the approach which is to be adopted following the analysis of earlier like provisions, it follows in this case, the action was misconceived and the discretion which is only enlivened by operation of s.570(2), is in this case enlivened.
It follows, in my view, that the principal applicant as respondent to the application to strike out should pay the costs of the application including the principal application. I propose to assess those now.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 30 November 2011
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