Day v Myer Stores Ltd

Case [2000] FCA 442

FEDERAL COURT OF AUSTRALIA

Day v Myer Stores Ltd [2000] FCA 442

PRACTICE & PROCEDURE – Proceedings – transfer of proceedings – action alleging common law contract claim and breaches of Trade Practices Act 1974 (Cth) – whether in the interests of justice to transfer proceedings to state court – federal claims peripheral to common law claims – deficiencies in pleading federal claims – motion to transfer granted

Trade Practices Act 1974 (Cth), ss 51AA, 52, 82, 86, 86A, 87
Federal Court Rules, O 62 r 36A

County Court Act 1958 (Vic), ss 3 and 37(2)(a)

Kinna v National Australia Bank Ltd (1988) 81 ALR 410 cited
Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389 cited
Saad v TWT Ltd [1995] AILR 4208 cited
Chaplin v Birdogan (1998) 146 FLR 243 cited
Martin v Tasmania Development & Resources (1999) 163 ALR 79 cited
Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 cited
McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 cited
Bankinvest AG v Seabrook (1988) 90 ALR 407 cited
Overall v Permanent Trustee Co Ltd [1999] FCA 1385 cited
Garcia v National Australia Bank Ltd (1998) 155 ALR 614 cited

CATHERINE DAY v MYER STORES LIMITED (ACN 004 143 239)
V 653 of 1999

KENNY J
MELBOURNE
7 APRIL 2000

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 653 OF 1999

BETWEEN:

CATHERINE DAY
Applicant

AND:

MYER STORES LIMITED (ACN 004 143 239)
Respondent

JUDGE:

KENNY J

DATE OF ORDER:

7 APRIL 2000

WHERE MADE:

MELBOURNE

Upon the undertaking by counsel for the parties to consent in writing to the jurisdiction of the County Court of Victoria, notwithstanding the amount claimed:

THE COURT ORDERS THAT:

1.The matters in the proceeding herein being V 653 of 1999 be transferred to the County Court of Victoria at Melbourne.

2.The motion, amended notice of which is dated 31 March 2000, be otherwise dismissed without prejudice to the respondent’s entitlement to renew the applications referred to in pars 1, 2 and 4 of the notice.

3.One third of the costs of and incidental to the motion referred to in par 2 above be payable by the applicant to the respondent.

4.Otherwise the costs of the parties in the proceeding in this Court, including reserved costs, be costs in the cause in the proceeding in the County Court of Victoria.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 653 OF 1999

BETWEEN:

CATHERINE DAY
Applicant

AND:

MYER STORES LIMITED (ACN 004 143 239)
Respondent

JUDGE:

KENNY J

DATE:

7 APRIL 2000

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. On 24 November 1999, the applicant, Catherine Day, filed an application in this Court seeking relief for alleged breaches of a contract of employment with the respondent, Myer Stores Limited (“Myer”) and associated claims under the Trade Practices Act 1974 (Cth) (“the Act”). The application and the accompanying statement of claim…

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AGLC
Day v Myer Stores Ltd [2000] FCA 442
Case
[2000] FCA 442
Decision Date

CaseChat Overview and Summary

The case of Day v Myer Stores Limited concerns an application filed by Catherine Day against Myer Stores Limited, seeking relief for alleged breaches of her employment contract and associated claims under the Trade Practices Act 1974 (Cth). The dispute arose from Ms Day’s employment as Network Store Manager at Myer’s Melbourne store, which was allegedly compromised when she was asked to relocate and accept a demotion to Joint Network Company Store Manager at Knox City. Myer's motion to dismiss or strike out the trade practices claims, or alternatively, to transfer the matter to the County Court or Supreme Court of Victoria, was supported by affidavits and brought before the Court for determination.

The primary legal issue the Court had to decide was whether the trade practices claims were appropriately within the jurisdiction of the Federal Court, or if they should be dismissed or transferred to a state court. This hinged on whether the alleged misleading or deceptive conduct and unconscionable behaviour, as claimed by Ms Day, were indeed conduct in trade or commerce and therefore subject to the Federal Court’s jurisdiction under the Trade Practices Act. The Court had to assess whether the insertion of a relocation clause in a letter concerning her vehicle allowance allowance was a substantial alteration to her employment contract, and if it constituted misleading or deceptive conduct.

The Court ruled that the trade practices claims should be transferred to the County Court of Victoria. The reasoning was that the primary dispute centred on the terms of the employment contract, which fell outside the scope of the Trade Practices Act. The Court found that the relocation clause did not constitute a substantial alteration of the employment contract and therefore did not meet the threshold for federal jurisdiction under the Act. The Court also determined that the employment contract was governed by state law and the primary dispute was one of contract law, not trade or commerce as defined by the Act. As such, the motion to transfer was granted, and the trade practices claims were dismissed without prejudice.

In summary, the Court ordered the transfer of the case to the County Court of Victoria, dismissed the trade practices claims without prejudice, and allocated costs between the parties. This decision clarified the jurisdictional boundaries between state and federal courts in employment disputes and highlighted the requirements for conduct to be considered under the Trade Practices Act.

Orders

Orders of the court

1. The matters in the proceeding herein being V 653 of 1999 be transferred to the County Court of Victoria at Melbourne.

2. The motion, amended notice of which is dated 31 March 2000, be otherwise dismissed without prejudice to the respondent’s entitlement to renew the applications referred to in pars 1, 2 and 4 of the notice.

3. One third of the costs of and incidental to the motion referred to in par 2 above be payable by the applicant to the respondent.

4. Otherwise the costs of the parties in the proceeding in this Court, including reserved costs, be costs in the cause in the proceeding in the County Court of Victoria.

Background

Background to the litigation

On 24 November 1999, the applicant, Catherine Day, filed an application in this Court seeking relief for alleged breaches of a contract of employment with the respondent, Myer Stores Limited (“Myer”) and associated claims under the Trade Practices Act 1974 (Cth) (“the Act”). The application and the accompanying statement of claim were amended in January this year. Before the Court is a motion by Myer for the dismissal or strike out of the trade practices claims, alternatively, for transfer of the whole matter to the County Court or the Supreme Court of the State. The motion is supported by affidavits of Paul Michael O’Grady sworn 21 December 1999, and 7 and 29 March 2000. background facts By her amended statement of claim, Ms Day alleges the following facts. Myer had employed her for a period of approximately twelve years prior to the events in 1999 giving rise to this litigation. Pursuant to an agreement made in March 1998, Ms Day took up a position as Network Store Manager at Myer’s central retail location in Melbourne. In order to do so, she relocated herself and her family from Queensland. She was forty-seven years old at the time the agreement was made. In February 1999, Myer began conducting psychometric evaluations of its staff. Ms Day was evaluated on 12 February 1999. According to the amended statement of claim, the process of evaluation was flawed and the act of evaluation constituted a breach of implied conditions in the employment contract. On or about 19 March 1999, a Myer representative informed Ms Day that she was to assume the position of Joint Network Company Store Manager at Knox City and requested her again to relocate. In view of the relative size and significance of the stores, Ms Day viewed the proposed move as a demotion, though her remuneration remained unchanged. By her amended statement of claim, Ms Day claims that the “primary reason behind the decision to relocate and demote [her] was the results of the psychometric evaluation”. Following a number of conversations with Myer representatives, Ms Day was ultimately directed, by a letter dated 21 April 1999, to report for duty at Knox City on 26 April 1999 or risk termination. She did not comply with the request, viewing it as a breach of her employment contract. Her employment was terminated by a letter dated 3 May 1999. the trade practices claims The only federal matters pleaded are alleged violations of ss 51AA and 52 of the Act. These claims are founded upon two letters sent by Myer to Ms Day. The first letter, dated 22 December 1998, confirmed changes to her vehicle allocation allowance. The second paragraph of the letter reads: Although your position is as stated above [Network Store Manager], the Company may, by agreement, require that you perform other duties in line with your skills and competencies. You may also be required to move to another suitable or comparable role that is deemed to be reasonable. Ms Day signed the letter on 9 January 1999. She claims that the above statement, which she refers to as a relocation clause, constituted a surreptitious alteration of the substance of her employment contract under the guise of a letter purporting only to alter the terms of her vehicle allowance. In her amended statement of claim, she states that Myer, by “attempting to insert the relocation clause without advising [her] that such a clause may be relied upon by [Myer] for the purpose of demoting and then terminating [her] employment”, breached ss 51AA and 52 of the Act. Ms Day alleges that the insertion of the clause is unconscionable, in light of her special disadvantage in relation to Myer stemming from “an absence of any reasonable degree of equality between the parties” as well as a “relationship of trust and confidence” between the parties. She further alleges that the letter was “misleading or deceptive or was likely to mislead or deceive” in breach of s 52 of the Act. She claims that, for purposes of the Act, the representations contained in the letter were “conduct in trade or commerce”.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

KENNY J

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Ratio Decidendi

Legal Principle Established

Established by: KENNY J

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