Crosthwaite v National Jet Systems Pty Ltd & Ors (No.3)
[2008] FMCA 355
•20 March 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CROSTHWAITE v NATIONAL JET SYSTEMS PTY LTD & ORS (No.3) | [2008] FMCA 355 |
| INDUSTRIAL LAW – Australian Workplace Agreements – duress. EVIDENCE – Objections. |
| Balding v Ten Talents Pty Ltd & Anor (2007) 162 IR 17; [2007] FMCA 145 Balding v Ten Talents Pty Ltd & Anor (No.3) [2008] FMCA 255 Schanka v Employment National (Administration) Pty Ltd (2001) 112 FCR 101; [2001] FCA 579 |
| Applicant: | KERREN MAREE CROSTHWAITE |
| Respondent: | NATIONAL JET SYSTEMS PTY LTD |
| First Cross Respondent: | ANDREW NIGEL KING |
| Second Cross Respondent: | LYNDON KRUGER |
| File Number: | PEG 109 of 2007 & PEG 122 of 2007 |
| Judgment of: | Lucev FM |
| Hearing date: | 17 March 2008 |
| Date of Last Submission: | 17 March 2008 |
| Delivered at: | Perth |
| Delivered on: | 20 March 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr R L Hooker and Ms H S Simpson-Zucal |
| Solicitors for the Applicant: | Corrs Chambers Westgarth |
| Counsel for the Respondent: | Mr A B Gotting |
| Solicitors for the Respondent: | EMA Legal |
| Counsel for the Cross Respondents: | Mr J B Blackburn |
| Solicitors for the Cross Respondents: | Blake Dawson Waldron |
ORDERS
The Court orders that:
as to the affidavit of Andrew Nigel King affirmed 5 October 2007 that:
(a)the objections to paragraphs 104, 129 and 150 be dismissed;
(b)as to paragraph 142:
(i)the objection be upheld as to the words “Nottage to mean”, and those words be struck out; and
(ii)the objection otherwise be dismissed;
(c)as to paragraph 145:
(i)as to the first sentence the objection is dismissed; and
(ii)as to the second sentence the objection is upheld, and that sentence be struck out.
as to the affidavit of Lyndon James Kruger sworn 5 October 2007 the objections to paragraphs 82 and 142 be dismissed.
as to the affidavit of Rowan Richard Ward affirmed 12 October 2007:
(a)the objections to the first sentence of paragraph 37 and paragraphs 58, 59 and 62 and annexure RRW13 be dismissed; and
(b)the objections to paragraphs 15, 54 and 55 and the second sentence of paragraph 16 be upheld, and that those paragraphs and that sentence be struck out.
Costs reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 109 of 2007 & PEG 122 of 2007
| KERREN MAREE CROSTHWAITE |
Applicant
And
| NATIONAL JET SYSTEMS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
On 30 January 2008 this Court ordered that all parties in these proceedings file any additional or amended schedules of objections to evidence in chief by 4.00 p.m. 22 February 2008 with responses by 4.00 p.m. 29 February 2008. The objections were listed for hearing at 10.15 a.m. on 17 March 2008.
The parties complied with the orders made on 30 January 2008. When the matter came on for hearing on 17 March 2008 the Respondent advised, and the Cross-Respondent’s agreed, that settlement discussions between them were at an advanced stage, and that the Respondent’s and Cross-Respondent’s were hopeful that all issues between them would be resolved shortly. On that basis, they sought to adjourn the hearing of the objections to evidence between them. It was put on the basis that it was unnecessary to argue the objections because settlement was so close. Counsel for the Cross-Respondent’s pointed out to the Court that the Cross-Respondent’s alone had made 250 objections to evidence, and that if the matters between the Respondent and Cross-Respondent settled, no argument on those objections was necessary.
In the circumstances, the Court acceded to the application for adjournment of the matters between the Respondent and Cross-Respondent’s. Those matters were adjourned to 9.30 a.m. on 28 March 2008 for mention, with leave given to the Respondent’s to appear by telephone.
The Respondent argued its objections to the Applicant’s affidavits, and those matters are dealt with below.
The Applicant did not argue its objections to the Respondent’s affidavits, those matters being adjourned, by consent, to be dealt with later in the proceedings, and in particular, once the Respondent has opened its case.
The reasons which follow deal only with those matters which were argued and required the Court to make a ruling. Other objections, which were conceded, or which resulted in the admission of paragraphs of affidavits previously objected to on an alternative basis (for example, that the paragraph was relied on for a non-hearsay purpose) are not otherwise referred to in this Reasons for Judgment.
Respondent’s objections to Applicant’s affidavits
Objections were argued to three of the Applicant’s affidavits, being the affidavits of:
a)Andrew Nigel King affirmed on 5 October 2007; [1]
b)Lyndon James Kruger sworn on 5 October 2007; [2] and
c)Rowan Richard Ward affirmed on 12 October 2007. [3]
[1] “King’s Affidavit”.
[2] “Kruger’s Affidavit”.
[3] “Ward’s Affidavit”.
King’s Affidavit
Paragraph 104 which is objected to reads as follows:
“I was not exactly sure what ‘rectify’ meant, but at the forefront of my mind was the sense that I would be targeted for termination of employment. I note that, at this stage, I had been commercially operating B717s under the 2003 AWA since August 2005.”
The objection is to relevance.
That objection needs to be considered against other material which is not being objected to. Thus, paragraph 99 refers to the receipt of a letter from Geoff Roberts, General Manager – Flight Operations dated 20 June 2006 attached as annexure AK19 to King’s affidavit. Paragraphs 101, 102 and 103 each make reference to how King felt as a result of the 20 June 2006 letter from Roberts. In particular, paragraph 102 says that the letter made him feel that refusal to sign an AWA might mean that he “face[d] possible termination of my employment.” Further, paragraph 103 says that King felt that the last paragraph of the 20 June 2006 letter “made me feel like my job depended on the 2005 AWA being signed” and that in that paragraph Roberts, on behalf of the Respondent, had indicated that the Respondent “intended to proceed further to ‘rectify that situation’ ”.
The Applicant argues that given what is otherwise before the Court by way of King’s admissible evidence in relation to the 20 June 2006 letter, and his perceptions and feelings about that letter, it is entirely permissible for him to go further and say that he is not sure what “rectify” meant and for him to say that he had a sense that he would be targeted for termination of employment.
The Respondent says that the material in the first sentence of paragraph 104 is irrelevant because the feeling of being targeted for termination of employment is not particularised in paragraph 31M of the Further Amended Points of Claim. The Respondent says that paragraph 31M(ii) and (iii) which asserts that the 20 June 2006 letter made King feel:
“(ii) that the only decision available to him was either to sign the Proposed AWA and continue his employment as per usual, or refuse to sign the Proposed AWA and face possible termination of his employment; and
(iii) like his job depended on the Proposed AWA being signed”
are of a different nature to paragraph 104.
The Court considers that paragraph 104 relates directly to the 20 June 2006 letter and is part of the relevant narrative flowing from paragraphs 99, 101, 102 and 103 which are not objected to. Those paragraphs, together with paragraph 104, squarely relate to the propositions in paragraph 31M of the Further Amended Points of Claim that King felt that he faced possible termination of employment and that his job depended upon the Proposed AWA being signed. That is relevant because:
“conduct which puts an employee in the position of ‘it’s the AWA or your job’ has been held to be unconscionable conduct giving rise to a serious issue to be tried as to whether it is duress in relation to the employees concerned”.[4]
[4] Balding v Ten Talents Pty Ltd& Anor (2007) 162 IR 17 at 27 per Lucev FM, [2007] FMCA 145 at para 37 per Lucev FM (“Ten Talents (No.1)”).
Paragraph 104 is relevant to the matter pleaded in paragraph 31M of the Further Amended Points of Claim. The objection will be dismissed.
The next objection is to paragraph 129. That paragraph reads as follows:
“I felt that in applying to cancel my 2003 AWA NJS had singled me out and were using me as an example to others. I felt that NJS was using me to send a message to other pilots, in a public and humiliating way, that you shouldn’t mess with them.”
The Applicant says that paragraph 129 is relevant in the context of paragraphs 31P and 31Q of the Further Amended Points of Claim that set out certain steps taken by the Respondent in seeking to terminate King’s 2003 AWA, and in particular the comments of Counsel at the hearing of the termination application in the Australian Industrial Relations Commission, which comments singled out the fact that King and Kruger were the only two employees who had refused to be bound by the terms and conditions of the replacement AWA.
The Applicant says that paragraph 129 is relevant because how King felt is capable of supporting a conclusion (in conjunction with other evidence, some of which has been referred to above) that overall there was pressure that was illegitimate. The Applicant recognises that there may be a heavy onus in asserting that conduct which is otherwise lawful (that being the application to terminate the 2003 AWA and the comments made by Counsel in support of that application) also constitutes illegitimate pressure. Illegitimate pressure may, in certain circumstances, be constituted by lawful conduct. [5]
[5] Ten Talents No. 1 IR at 27 per Lucev FM, FMCA at para 34 per Lucev FM.
The Respondent says that this objection must be considered against the specific allegation made in paragraph 31R of the Further Amended Points of Claim that the purpose in making the application to terminate the 2003 AWA was to apply pressure or further pressure on King to sign the Proposed AWA. The Respondent says that there is no allegation in paragraph 31R of singling out or using King as an example to others.
The matters referred to in paragraph 129, namely: singling out, being used an example, and being humiliated in a public way, may arguably all be aspects of the application by the Respondent of pressure or further pressure on King to sign the proposed AWA. Whether they were or not will, and whether the pressure was illegitimate or not will, obviously have to wait determination at hearing. However, those matters are relevant to an allegation that pressure or further pressure was sought to be applied by the Respondent to King. Therefore, they form part of the duress alleged at paragraph 31Z of the Further Amended Points of Claim. They are therefore relevant, and the objection to paragraph 129 is dismissed.
The second sentence of paragraph 142 is objected to. That paragraph reads as follows:
“Nottage went on to say that it was my decision whether I signed the AWA or not. From this, I understood Nottage to mean that if I did not sign the 2005 AWA I would face the consequences of returning to the award.”
Paragraph 142 follows paragraph 141 in which King alleges that Nottage (the Respondent’s Chief Executive Officer) had indicated to him that the Respondent was not going to change any paragraph in the AWA which was being offered to him. On the Applicant’s argument that is then confirmed by a later email from an officer of the Respondent to King confirming that the Respondent would not change its position. The Applicant says that the question of whether or not a party is prepared to bargain may be critical in any given case to a possible finding of duress. Therefore, the Applicant says that the second sentence of paragraph 142 is relevant.
The Respondent says that paragraphs 31W and 31X of the Further Amended Points of Claim deal with the meeting with Nottage referred to by King in paragraphs 141 and 142. Paragraphs 31W and 31X of the Further Amended Points of Claim allege that the Respondent was not going to change any paragraph in the Proposed AWA being offered to King, and that as a consequence, at the end of the meeting King did not know what other options that he had other than to accept a reduced salary, sign the Proposed AWA or terminate his employment, and that he was very concerned about the financial pressures caused by a drop in salary. The Respondent says that these are different concepts to what is being referred to in the second sentence of paragraph 142, and that sentence is therefore relevant.
What King understood might be relevant to a claim of duress for reasons previously set out. The question here is whether his understanding that he might face the consequences of returning to the Award (whatever they might be) is relevant to the matters pleaded, particularly in paragraph 31X(ii) and (iii), the substance of which is set out above.
In the Court’s view the consequences of returning to the Award might go to King’s options, or lack of them, and any possible financial pressures caused by a drop in salary. That might arguably constitute a form of economic duress, or duress by reason of the a power disparity between the parties.[6] For those reasons the second sentence of paragraph 142 is generally relevant to the allegation of the application of duress in relation to what King then understood. Whilst King’s understanding might be relevant to the question of duress the Court does not consider that the words “Nottage to mean” are necessarily relevant to what King understands, and those words should be struck out. Therefore, the application in relation to paragraph 142 will be upheld in part, and the words “Nottage to mean” will be struck out, otherwise the objection is dismissed.
[6] Ten Talents No. 1 IR at 30 per Lucev FM, FMCA at para 56 per Lucev FM
The next objection is to paragraph 145. That paragraph reads as follows:
“After my meeting with Nottage, I received an email from Paul Richards dated 27 October 2006, a true copy of which is included in annexure AK31. The email confirmed NJS would not change its position and that my 2003 AWA would be cancelled with effect from December.”
Annexure AK31 is also objected to.
The Applicant says that the paragraph and the annexure are relevant because they confirm that the Respondent would not change its position and that the 2003 AWA would be cancelled with effect from December 2006. The Applicant says that is relevant because it is expressly pleaded in paragraphs 31W and 31X of the Further Amended Points of Claim.
The Respondent says that having regard to the manner in which the allegations of duress are pleaded that the email is irrelevant.
Given that the email, on the Applicant’s case, relates to and confirms that the Respondent was not going to change its position in relation to the Proposed AWA, the Court considers that the email is relevant because questions of opportunity or refusal to negotiate are relevant to whether there was duress. [7] The email makes express reference to the meeting with Nottage earlier in the day and issues related to the Proposed AWA. It is therefore relevant.
[7] Ten Talents (No 1) IR at 30 per Lucev FM, FMCA at para 53 per Lucev FM, citing Schanka v Employment National (Administration) Pty Ltd (2001) 112 FCR 101 at 139-140 per Moore J; [2001] FCA 579 at paras 104-105 per Moore J; Balding v Ten Talents Pty Ltd& Anor (No. 3) [2008] FMCA 255 at paras 26-27 per Lucev FM.
The second sentence of paragraph 145 is commentary. It does not relate to King’s feelings or perceptions in relation to the duress allegation.
The objection to paragraph 145 will be dismissed in relation to the first sentence, and upheld in relation to the second sentence. Therefore, the second sentence will be struck out.
The next objection is to paragraph 150. That paragraph reads as follow:
“The Company’s behaviour throughout 2005 and 2006 in trying to get me to sign the 2005 AWA also contributed to my decision to resign.”
The objection is to relevance.
The Applicant presses paragraph 150 saying that King is entitled to aggregate his earlier statements about his interaction with the Respondent and the Respondent’s behaviour into an ultimate statement that it was that behaviour over the period of 2005 and 2006 that contributed to his decision to resign. The Respondent says that paragraph 31Y of the Further Amended Points of Claim refers to King’s resignation but that it is not suggested that the Respondent’s conduct had any impact on that resignation.
In the Court’s view, paragraph 150 is relevant. Paragraph 31Z of the Further Amended Points of Claim asserts that by reason of the facts pleaded at paragraphs 31A to 31Y of the Further Amended Points of Claim the Respondent applied duress to King in connection with the relevant AWAs. The conduct referred to includes not only the resignation but the alleged conduct of the Respondent preceding the resignation, and paragraph 150 refers to that conduct and what King says was, at least in part, the ultimate effect of that conduct, namely his resignation, which conduct and resignation are the subject of the plea of duress at paragraph 31Z of the Further Amended Points of Claim. The objection to paragraph 150 will therefore be dismissed.
Kruger’s Affidavit
Paragraph 82 is objected to. That paragraph reads as follows:
“Roberts told me that a letter was coming out about the 2006 CPI increase and that I would not receive the increase unless I signed the AWA.”
The objection is as to relevance.
The Applicant says that paragraph 82 forms part of a single conversation which is set out at paragraphs 81 to 84, with those other paragraphs not being objected to. The Applicant says that to “cherry pick” a single part of a continuous conversation results in an artificial approach to the admission of the evidence of the conversation.
The Respondent objects on the basis of paragraph 32J of the Further Amended Points of Claim. The Respondent says that the material set out in paragraph 82 is not identified specifically as a basis or an allegation of duress and is therefore irrelevant.
In the Further Amended Points of Claim paragraph 32J refers to a conversation between Kruger and Roberts on or about 7 July 2006. In the Court’s view in order to properly understand the context of the conversation referred to paragraph 82 is necessary, and relevant, as part of that conversation. The objection to paragraph 82 will therefore be dismissed.
The next objection is to paragraph 142. That paragraph reads as follows:
“The pressure I was placed under to sign the 2005 AWA and the cut in my income was a major factor in my decision to leave NJS.”
The objection is to relevance.
It is not necessary to deal with the bases for asserting relevance or denying it in this case: the matter is essentially the same as that dealt with in relation to King’s Affidavit at paragraph 150 and can be resolved on the same basis by the dismissal of the objection.
Ward’s Affidavit
Paragraph 15 is objected to on the basis of relevance. Paragraph 15 reads as follows:
“Clause 28 of the Constitution in its terms authorises the Chairman of the Committee to execute on behalf of the NJSPG contracts of employment for any employees of the NJSPG (as opposed to employees of the Company). The NJSPG doesn’t actually have any employees and never has to my knowledge.”
A reading of clause 28 as a whole also indicates that its provisions are clearly intended to relate to the execution of documents concerning employees of NJSPG, whether they be contracts of employment, collective industrial agreements or other documents or instruments. As such, they are irrelevant to these proceedings. Paragraph 15 will therefore be struck out.
The next objection is to the second sentence of paragraph 16. That sentence reads as follows:
“However, the Company’s exercise of its prerogative to use industrial agreements, and not a collective agreement, means that, in reality, we end up with about 170 individual agreements, not one agreement.”
The objection is that the sentence is conclusion and submission. The objection is conceded up to the words “…in reality”.
The concession affects the meaning of the remaining words. It is unclear who the “we” is referring to. It certainly cannot be referring to the Committee as the Committee does not enter such agreements. The concession renders the remaining words meaningless, or at least vague and unsatisfactory. As such, they ought to be struck out. Therefore, the entire second sentence of paragraph 16 will be struck out.
The next objection is to the first sentence of paragraph 37. That sentence reads as follows:
“The Company, and in particular Ms Marsilli, informed us that they wanted the Committee to “sell” the 2005 AWA to pilots.”
The objection is to the form of the first sentence, and also that it is embarrassing and prejudicial.
Read as a whole the sentence is readily understandable, identifying the fact that, in particular, one individual from the Company informed the Committee that it wanted the Committee to “sell” the 2005 AWA to the pilots. The sentence is unexceptional as to its form and content. Further, the assertion that the Company wanted the Committee to “sell” the 2005 AWA might be relevant to an allegation of duress. The objection will be dismissed.
The next objection is to paragraph 54. That paragraph reads as follows:
“The consequences of not getting 100% take up of AWAs has been consistently raised by both the Committee and the AFAP with the Company. The problem was openly discussed in 2003 base visits when Phil Young was head of Human Resources. It was also a topic of discussion between the Company and the Committee in early and mid 2005. The Committee continuously pointed out that, if the Company really wanted a deal to “get up,” a collective EBA or certified agreement was far more likely to deliver the desired outcome.”
The objection is on the basis of relevance.
The consequences of not getting a certain percentage take up of AWAs being raised by the Committee and the AFAP with the Company are not relevant to the allegations of duress in this case. The fact that that issue was discussed in 2003 cannot be relevant to an allegation of duress in 2005. Likewise, the fact that it was a topic of discussion between the Company and the Committee, with the Committee urging a collective outcome rather than an individual outcome, cannot be indicative of duress by the Company in relation to individual AWAs in this case. Those incidents do not provide examples of the application of pressure by the Company in relation to the AWAs in respect of which duress has been alleged in these proceedings. Paragraph 54 will therefore be struck out as irrelevant.
The next objection is to paragraph 55. That paragraph reads as follows:
“I am aware of previous experiences of not all pilots agreeing to an AWA supported by the Committee. For example a memorandum of this subject dated 31 July 2003 was sent from Ms Marsilli, Mr Siebert and Phillip Young, the Company’s General Manager – Human Resources for pilots in relation to the “Pilots’ AWA”.
This paragraph will be struck out for the same reasons as paragraph 54 was struck out as irrelevant.
The next objection is to paragraph 58. Paragraph 58 reads as follows:
“Ms Marsilli told me in December 2004 that the Company had approximately 36 different AWAs and that this was difficult to manage but that the Company had to continue with the AWAs for the pilots because that’s what Qantas wanted. She said that the Committee should “sell” the 2005 AWA to the pilots so the Company would win the Qantas B717 Contract.”
The basis of the objection to paragraph 58 is relevance and prejudice.
The allegations in the paragraph that:
(a)the Company had to continue with the AWAs for pilots because that is what Qantas wanted; and
(b)that the Committee should “sell” the 2005 AWA to the pilots so that the Company would win the Qantas B717 Contract,
are both relevant as providing a motive for the alleged duress. Also, the Company telling the Committee to “sell” the AWAs to the pilots might also be relevant to the allegation of duress by the Company. Much might ultimately depend in that regard on what “sell” means in this context, and how the “selling” was done.
Paragraph 58 is therefore relevant and the objection will be dismissed.
The next objection is to paragraph 59. That paragraph reads as follows:
“I told Ms Marsilli it was not my role to encourage pilots to sign the 2005 AWA as it was an individual agreement which the individual had to decide on.”
The basis of the objection is relevance.
It follows from what the Court has said concerning paragraph 58 above that Ward’s response to the suggestion that the Committee “sell” the AWA to the pilots might also be relevant to the allegations of duress by the Company. The objection to paragraph 59 will therefore be dismissed.
The next objection is to the third, fourth and ninth paragraphs of Annexure RRW13. The annexure is a copy of a letter dated 26 July 2005 from Lawrie Cox of the AFAP to Ms Marsilli advising her of growing concern from pilots reluctant to sign the 2005 AWA.
It is not necessary to set out the three paragraphs concerned. It suffices to say that in the Court’s view the three paragraphs are part of, and relate to, other paragraphs which have not been objected to, and which are relevant. Therefore the paragraphs objected to are relevant when looking at the overall context of the annexure. In those circumstances the objection to annexure RRW13 will be dismissed.
The final objection on which it is necessary to rule is to paragraph 62. That paragraph reads as follows:
“The Company issued a new AWA in 2006 which contained clauses which we had not negotiated with the Company or even been consulted on eg, bonding and new scales of pay. In particular, there was a $40,000 bond for pilots needing to be B717s – an issue never the subject of any negotiations.”
The objection is on the basis of relevance. The issuance of a new AWA in 2006 by the Company might arguably be part of a pattern of conduct related to attempts to coerce pilots into signing AWAs. It might therefore be relevant to the allegations of duress made. The objection will therefore be dismissed.
Summary of conclusions
In summary, the Court has concluded as follows:
a)as to King’s Affidavit:
i)the objections to paragraphs 104, 129 and 150 be dismissed;
ii)as to paragraph 142:
(i)the objection be upheld as to the words “Nottage to mean”, and those words be struck out; and
(ii)the objection otherwise be dismissed;
iii)as to paragraph 145:
(i)as to the first sentence the objection is dismissed; and
(ii)as to the second sentence the objection is upheld, and that sentence be struck out.
b)as to Kruger’s Affidavit the objections to paragraphs 82 and 142 be dismissed.
c)as to Ward’s Affidavit affirmed 12 October 2007:
i)the objections to the first sentence of paragraph 37 and paragraphs 58, 59 and 62 and annexure RRW13 be dismissed; and
ii)the objections to paragraphs 15, 54 and 55 and the second sentence of paragraph 16 be upheld, and that those paragraphs and that sentence be struck out.
Costs will be reserved.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Lucev FM
Deputy Associate: S Gough
Date: 20 March 2008
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