Employment National v Schanka

[2000] HCATrans 525

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S44 of 2000

B e t w e e n -

EMPLOYMENT NATIONAL (ADMINISTRATION) PTY LIMITED

Applicant

and

PETER SCHANKA, ERICA ALDRIDGE, RICHARD WALDEN and JAMES BURNS

Respondents

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 24 NOVEMBER 2000, AT 10.17 AM

Copyright in the High Court of Australia

MR J.L. TREW, QC:   If your Honours please, I appear for the applicant and MR L. KAUFMAN appears with me.  (instructed by Andersen Legal Lawyers)

MR R.C. KENZIE, QC:   May it please the Court, I appear with my learned friend, MS C.M. HOWELL, for the respondents.  (instructed by Steve Ramsey)

GLEESON CJ:   Yes, Mr Trew.

MR TREW:   This case is important, your Honours, because it raises the question whether anyone who is offered a job conditional upon entering into an Australian Workplace Agreement under the Workplace Relations Act can bring an action claiming that they were subjected to duress.

McHUGH J:   The first problem for my part, Mr Trew, is that I am surprised at the form of the questions.  No facts are found.  The questions are not tailored to the facts.  They are very abstract questions of law, almost asking the Court to give an advisory opinion.  In fact, I think it could be argued that it did.

MR TREW:   The factual matter that is raised that the questions address finally, your Honours, is whether or not a person who did not enter into an employment arrangement has standing to bring proceedings for the contravention of statutory duress.  That person was a party to the proceedings.  That is Mr Burns.  He did not become an employee.  He did not sign an Australian Workplace Agreement.  So, at the very beginning, the question arises:  has he got any standing?

GLEESON CJ:   Suppose it is decided that Mr Burns is out of court.  What follows from that?  The action just goes ahead in relation to the three others?

MR TREW:   It does, your Honour, because the question then is whether or not duress in the statutory sense has the same meaning as under the general law, namely, whether or not there should be an agreement made before the question of duress can arise.

McHUGH J:   But that is not the purpose of stated cases or framing questions.  The questions should be framed in accordance with the facts.  Look how abstract the questions are.

“On the proper interpretation of s.170WG(1):

(a) can a person ever be said to have applied duress to an employee in connection with an AWA by requiring the employee to make an AWA as a condition of appointment to the employment; and

(b) is duress in that section limited to the conduct of the alleged perpetrator”

They are very abstract questions.

MR TREW:   Your Honour, if we had been successful in that application, an order would then have been made – I am sorry, it proceeded on the basis that Mr Burns was applying to be joined as a party.  His application would then have been refused.

McHUGH J:   Yes, but why was not the case tied to the particular facts concerning Mr Burns then?

MR TREW:   All I can say, your Honours, is that is the issue that was ventilated no matter what form the questions were expressed in.

McHUGH J:   Yes, but there are proper procedures.  This Court has said more than once in recent years that questions are being sent up here without due regard to the functions of courts which are to decide disputes between parties, not to answer abstract questions and ask courts for advisory opinions.

MR TREW:   At the end of the day, your Honours, the issue was whether or not a person who is not an employee can bring proceedings for the contravention of statutory duress.  If the questions are inadequate in the way that that issue is raised, notwithstanding that, we submit, that is the issue that was ventilated and that is the issue in respect of which this application is now made.

McHUGH J: But this is the very problem that Sir Owen Dixon explained when he gave evidence before the Royal Commission into the Constitution about advisory opinions. You ask the question, “Is duress in that section limited to the conduct of the alleged perpetrator?”, and the court says yes or no. Next day some case comes up with some special set of facts and you say, “Yes, we’re wrong about that”, so the court is then in a real problem by answering these abstract questions. But if the question is tied to the particular facts, then you get an answer in respect of that factual situation.

MR TREW:   As I say, your Honours, if special leave were granted in this case, the questions could be amended so that the specific issue that is raised, namely, the standing of Mr Burns to claim a penalty, can then be answered either in favour of the applicant here or the respondents.

McHUGH J:   I thought that Justice Moore directed that the standing of Mr Burns as an applicant also be determined at the same time as the determination of the initial questions.

MR TREW:   That is so, your Honour, but both matters raised the same issue.  That is the issue upon which this application to this Court is based.  It is based simply on the question of whether statutory duress in this particular provision has a different meaning to duress under the general law.  If it does have a different meaning and it allows anybody who seeks employment and does not get employment to complain that they have been subjected to duress in this particular case, it opens the spectre, they being representative proceedings, of the many other people that are represented by that subclass of person to claim up to $10,000 as a penalty.  We do not know how many people are in that class but it could conceivably be more than a hundred.

GLEESON CJ:   Mr Trew, what is behind this?  What is the proposition that your client wants to have established?

MR TREW:   Whether or not a person who does not enter into an employment relationship can claim a penalty under section 170WG because that person has been subjected to duress.

GLEESON CJ:   Why not?

MR TREW:   Duress only applies, in our submission, under the general law in circumstances where a transaction has been entered into.

GLEESON CJ:   Where is the statutory provision?

MR TREW:   We will find it in the judgment as well, your Honour, but it is section 170WG at page 43 of the application book.

GLEESON CJ:  

“(1)  A person must not apply duress to an employer or employee in connection with an AWA ‑ ‑ ‑

MR TREW:   Yes.

GLEESON CJ:   Were the relevant people about whom the complaint is made employees?

MR TREW:   Some were, but this particular applicant, Burns, was not an employee.  One subclass became employees and entered into contracts but this particular class represented by Mr Burns did not become an employee.  It was a conditional offer made by the applicant for employment that employment could be ‑ ‑ ‑

GLEESON CJ:   So the point about Mr Burns was that Mr Burns should have been out of court because he was at no material time an employee within the meaning of section 171.

MR TREW:   Yes.

GLEESON CJ:   Where do we find that point taken?  Why would you ask a theoretical question about that?  It sounds like a pretty straightforward proposition.  It is either right or wrong.  Mr Burns was not an employee, full stop.

McHUGH J:   Well, he was an employee, was he not?  He was in the public service.

MR TREW:   Yes, but the relationship must be with the person who is offering the employment.  The person offering the employment was the applicant here.  The point has to be refined further than that.  He did not ‑ ‑ ‑

GLEESON CJ:   So the point is that on the true construction of section 170WG, the person referred to as “an employee” must be an employee of the person alleged to have applied the duress?

MR TREW:   But he must have entered into an Australian Workplace Agreement with the person who is alleged to have applied a duress.

GLEESON CJ:   Where is that in the section?

MR TREW:   That arises from the meaning of “duress”.  One has to determine whether or not “duress” means simply coercion, irrespective of whether or not an AWA is made, or whether it means under the general law that somebody has submitted to pressure that the law regards as illegitimate.

GLEESON CJ:   This is talking about applying duress, not about succumbing to duress.

MR TREW:   Yes, your Honour, and in the general law the same expression is used in describing duress.  That appears on page 45 of the application book in an early judgment of Justice Isaacs in Smith v William Charlick.  It is in the lower half of the page and he is there speaking about the general concept of “duress” and he says in the third and fourth lines:

conduct analogous to duress…..applied to the person or the property –

That is a way of turning the expression “duress” into a verb, in our submission.

GLEESON CJ:   I must say if that is the issue to which this case was thought to give rise, these questions seem to constitute an extremely oblique way of raising the issue.

MR TREW:   That is the issue that was at the heart of this particular case.

McHUGH J:   The parties have not agreed on the facts.  Nothing has been tested.  Your strongest case for getting a grant of special leave would be to set aside the answers to the questions and set aside the questions and send the case back to be tried on the facts.

MR TREW:   But the essential factual issue that raises the standing of Mr Burns is the fact that he is joined and the evidence is that he never signed an AWA and never became an employee of the applicant.

GLEESON CJ:   But why would we grant special leave to appeal in order to get rid of one person from this action?

MR TREW:   It is not as simple as that, your Honour, with respect.  These are representative proceedings.  If it proceeds to trial with that representative party, it is necessary then to examine the circumstances beyond the common questions of law of fact in relation to all of the other ‑ ‑ ‑

GLEESON CJ:   Let me ask you this.  If this matter proceeds to trial and the trial judge, in conformity with the decision of the Full Court of the Federal Court, resolves this point against you at trial, is there anything then to stop you appealing from that?

MR TREW:   No, your Honour, but this is a simpler and cheaper way of resolving it, in our submission.

GLEESON CJ:   It might seem simpler from your point of view, but from the point of view of a court having to deal with what looks like a question of the construction of the Act by beginning with interpreting some questions framed by a trial judge is not necessarily satisfactory.  But I just wanted to be clear.  You say that if ultimately you fail at trial, this point will still be open to you on appeal?

MR TREW:   Yes.

GLEESON CJ:   And you could still at a later stage, assuming you failed in the Full Court of the Federal Court, apply to this Court for special leave and this Court could then determine the point in the light of the facts found?

MR TREW:   The Full Court has already determined the question of standing, so the Full Court would be bound by that.  There would then be a question of whether or not that was a final decision or an interlocutory decision.

GLEESON CJ:   I was intending to ask you a different question.  I was intending to ask whether, assuming this matter goes to trial now before a trial judge and you lose it at trial and you then go to the Full Court and lose in the Full Court, you could apply for special leave to appeal to this Court and raise these same points.

MR TREW:   The answer to that may be no, your Honour.  I do not know ‑ ‑ ‑

GLEESON CJ:   That shows what a thoroughly unsatisfactory procedure was adopted in the courts below in relation to these questions if it is right.

MR TREW:   If the question of standing was not determined at an early stage, the cost of the particular litigation only skyrockets.

GLEESON CJ:   I was not intending to ask a question about costs.  Let me be clear.  I am trying to find out whether or not if this matter, which was dealt with as an interlocutory matter in the Full Court of the Federal Court, goes now to trial and completion and you lose at trial and you lose in the Full Court of the Federal Court, it is still open to you to seek special leave to appeal to this Court and to raise any point you want to raise.

MR TREW:   There is a question of doubt of the status of the decision of the standing of Mr Burns.  That might very well be a final decision that cannot be appealed if the special leave application is rejected now.

McHUGH J:   It cannot be a final decision in respect of him, can it?  The only final decisions are those that are incorporated in the judgment that disposes of the action.

MR TREW:   There is some doubt about that, I think, your Honour.

McHUGH J:   It might have been different if he had been dismissed from the action but he is still in it.

MR TREW:   And that determines finally his right to be, but that is the only reservation I have about that, your Honour.  In our submission, it is not clear.

GLEESON CJ:   Mr Trew, we do not have it in our papers, but what was the originating process?

MR TREW:   It was an application before the Federal Court.

GLEESON CJ:   It is called an application?

MR TREW:   It is called something like a summons.

GLEESON CJ:   Something like a summons.  Is there anything like pleadings?

MR TREW:   Pleadings were subsequently ordered and there has been a statement of claim and defences filed.

GLEESON CJ:   I see.  Presumably in your defences you assert these points?

MR TREW:   I cannot answer that.  I have not looked at those in recent times on that issue.  But if it is not there, depending upon the fate of this, it would be there.

McHUGH J:   I myself do not think there is the slightest doubt about whether it is interlocutory and final.  It seems to me as clear as a pikestaff that it is interlocutory, but if there is the slightest doubt, at the end of the day you can always apply for special leave out of time against these decisions at the same time that your appeal is heard.  It would not be the first time it has happened.  Something similar happened in Coco v Australian Federal Police.

MR TREW:   If your Honour pleases.  What I proposed going to next was to identify those parts of the judgment of the Full Court where we say the court went wrong.  On page 48 of the application book the Full Court went wrong, we submit, because it gave too much weight to the remedy rather than the ingredients of the cause of action.  That appears in paragraphs 15 and 16.  It is in those paragraphs that the Full Court distinguished the general law doctrine of duress and held that it was to be more narrowly confined in relation to this statutory remedy.  It is that conclusion that this special leave application is intended to challenge if it is granted.

McHUGH J:   But there is a whole line of authority on duress in the criminal law.  I would have thought myself it was more apt than referring to

cases like my judgment in Crescendo Management or Deemcope and cases like those.

MR TREW:   Our submission is that the relevance of those contract cases is because it concerns an AWA which is a contractual document.  It is for that reason that they are relevant, in our submission.  The legislative history of this statutory provision would support the contractual approach, in our submission.  That is referred to in the part of the Bill that we included in the application book.  It is our submission that if the concept of duress is uncoupled from the equitable doctrine as it has developed in relation to contractual duress, the Court is being asked to apply some indeterminate moral standard as to what duress is.

McHUGH J:   They do not have any problem with it in the criminal law.

MR TREW:   I will not repeat again, your Honour, what I said.  It is the contractual cases that we submit are relevant.  They are our submissions in support of the application.

GLEESON CJ:   Thank you.  We do not need to hear you, Mr Kenzie.

The Court is of the view that having regard to the interlocutory nature of the proceedings in the Federal Court and to the difficulties associated with the theoretical terms of the questions raised for interlocutory decision in the Federal Court the present case is not a suitable vehicle for resolution of the issues sought to be agitated on behalf of the applicant.  The application is refused with costs.

MR TREW:   Your Honours, might I just be heard on that.  Section 347 of the statute limits costs to vexatious or ‑ ‑ ‑

GLEESON CJ:   I see.  What do you say about that, Mr Kenzie?  I do not think we would be prepared to characterise this as vexatious.

MR KENZIE:   Your Honours, the position is complicated in this way.  Our submissions were cast in terms of section 347 but we are very much alive to the discussion that took place in the Kestrel Coal  matter involving all members of the Court within the last couple of weeks.  I have read the transcript.  Although that matter did not concern a section 73 situation, but a section 75(v), or at least involved a section 75(v) question, there was much in the debate to suggest that the considerations flowing from McJannet’s Case apply and extend to appeals from the Federal Court allowed because of section 73.  Further to that, in the PP Consultants Case, decided within the last couple of weeks, although the issue of costs was not addressed in that case, the Court made an order for costs.

McHUGH J:   We made orders for costs.

MR KENZIE:   The Court made orders for costs and it occurred to us, although I must say it was not clear to me at the time, your Honours, that the basis of those orders may have been the views expressed in argument in the Kestrel Coal Case.  That being the case, issues of vexatious or without reasonable cause would fall away.  We did, at the time of putting our written submissions in, we were bold enough to put an approach which is really similar to that advanced by Mr Rothman in the Kestrel Coal Case, but those submissions did not appear to be received with, should we say, enthusiasm, your Honours.  Our friend was driven to say that if his submissions were wrong, then he applied for costs on the basis that section 347 should not be read as impacting on a section 237 appeal and the position would be the same here, your Honours.  I do not know if that assists.

GLEESON CJ:   Anything you want to say, Mr Trew?

MR TREW:   If that is a live issue, your Honour, it is appropriate, we submit, not to try and deal with that orally today but it is a matter that is appropriate for some considered written submissions about.  This is a novel question that has not, as far as I am aware, been determined, apart from being ventilated in the way our learned friend has just mentioned.

GLEESON CJ:   The application will be dismissed.  There will be no order as to costs.

We are going to adjourn for a little while to reconstitute.

AT 10.42 AM THE MATTER WAS CONCLUDED