Fadheel v Douglass Hanly Moir Pathology Pty Ltd

[2017] FCCA 2659

FEDERAL CIRCUIT COURT OF AUSTRALIA

FADHEEL v DOUGLASS HANLY MOIR PATHOLOGY PTY LTD [2017] FCCA 2659

Catchwords:
INDUSTRIAL LAW – Application claiming breach of a general protection provision of the Fair WorkAct2009 (Cth) – executed deed of agreement between parties – respondent’s obligation satisfied under agreement – whether the Court has the power to summarily dismiss a claim or proceeding – the applicant has no reasonable prospects of success – summary judgment ordered – application dismissed.

Legislation:

Fair Work Act 2009 (Cth), ss.365, 368, 369

Federal Circuit Court of Australia Act 1999 (Cth), s.17A
Federal Circuit Court Rules 2001 (Cth), r.13.10
Federal Court of Australia Act 1976 (Cth)

Cases cited:

Australia & New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14

Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500; [1998] HCA 33
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40

El-Mir & 1 Or v Risk [2005] NSWCA 215

Fadheel v Douglass Hanly Moir Pathology Pty Ltd [2017] FWC 3382

Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25
McDermott v Black (1940) 63 CLR 161; [1940] HCA 4

Shammas v Canberra Institute of Technology [2014] FCA 71

Applicant: ZEENA FADHEEL

Respondent: DOUGLASS HANLY MOIR PATHOLOGY PTY LTD

File Number: SYG 1653 of 2017

Judgment of: Judge Smith

Hearing date: 22 September 2017

Date of Last Submission: 22 September 2017

Delivered at: Sydney

Delivered on: 30 November 2017

REPRESENTATION

The applicant appeared in person.

Solicitors for the Respondent: Mr J Mattson, Bartier Perry

ORDERS

1. The name of the respondent be amended to Douglass Hanly Moir Pathology Pty Ltd.

2. Pursuant to s.17A(2) of the Federal Circuit Court of Australia Act 1999 (Cth) there be judgment for the respondent against the applicant in respect of the whole application filed on 29 May 2017.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1653 of 2017

ZEENA FADHEEL

Applicant

And

DOUGLASS HANLY MOIR PATHOLOGY PTY LTD

Respondent

REASONS FOR JUDGMENT

1. The applicant worked for the respondent from October 2014 as a pathology technician/collector. On 29 May 2017, she commenced proceedings in this Court claiming that she had been constructively dismissed on 16 February 2017, in breach of the general protections provisions of the Fair WorkAct2009 (Cth) (FWAct).

2. The respondent seeks an order summarily dismissing the proceedings. It argues first, that the applicant resigned from her employment and, secondly, that the applicant had released the respondent from all claims in connection with her employment with the respondent, pursuant to an agreement entered into in the course of conciliation before the Fair Work Commission (Commission) in February 2017. The respondent also raised a technical argument concerning the operation of sub-s.368(3)(b) of the FW Act. For reasons that will become clear, it is unnecessary to resolve that argument.

The power to summarily dismiss a claim or proceedings

1. Section 17A of the Federal Circuit Court of Australia Act1999 (Cth) (FCC Act) empowers the Court to give judgment for one party, against another party, in relation to any part of a proceeding if the Court is satisfied that the party has “no reasonable prospect of successfully prosecuting … that part of the proceeding”. Rule 13.10(a) of the Federal Circuit Court Rules2001 (Cth) (FCC Rules) is to the same effect.

2. Rule 13.10(c) of the FCC Rules empowers the Court to summarily dismiss a claim if it is satisfied that the claim is an abuse of process of the Court.

3. Section 17A(3) of the FCC Act provides:

   (3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

   (a)     hopeless; or

   (b)     bound to fail;

   for it to have no reasonable prospect of success.

4. In Shammas v Canberra Institute of Technology [2014] FCA 71, Foster J said of the analogous provision in the Federal Court of Australia Act1976 (Cth):

   50.In Singh v Super City Home Loans Pty Ltd [2011] FCA 646, at [129], I summarised the principles to be applied when the Court comes to consider exercising its power to summarily dismiss a proceeding pursuant to s 31A of the Federal Court Act in light of the High Court’s decision in Spencer v The Commonwealth (2010) 241 CLR 118. It is not necessary to extract that summary in full here. It is sufficient to note the following:

   (a)The power to order summary dismissal pursuant to s 31A is different from the power to strike out defective pleadings pursuant to a rule of Court in the terms of O 11 r 16 of the Federal Court Rules 1979.

   (b)The power to terminate proceedings summarily should be exercised with caution.

   (c)There must be a high degree of certainty that the claimant cannot succeed if the proceeding is allowed to go to trial in the ordinary way.

   (d)There must be “no reasonable prospect of success”. This is a different concept from the concept of  “no real prospect of success”. The statutory admonition is that a proceeding may be found to have no reasonable prospect of successful prosecution even if it is not hopeless or bound to fail. This test constitutes a radical departure from previous regimes which required that the proceeding must be shown to have no prospects of success.

   (Emphasis in original)

Factual background

1. Between November 2016 and February 2017, the applicant made a number of claims against the respondent in relation to her employment:

   a)on 9 November 2016, she lodged a general protections claim in the Commission alleging that the respondent had discriminated against her, harassed her and bullied her;

   b)on the same day, she made an application to the Commission for an order to stop bullying;

   c)on 7 December 2016, the applicant complained to the Anti-Discrimination Board of NSW that the respondent had discriminated against her on the basis of race, age and sex; and

   d)on 2 February 2017, she filed an application in this Court alleging a contravention of a general protection provision of the FW Act.

2. On 10 February 2017, there was a conciliation conference held by the Commission between the parties. An offer was made to the applicant by the respondent to settle the issues between them. It appears that that offer was rejected by the applicant on 13 February 2017.

3. On 14 February 2017, the respondent sent the applicant a letter of termination by email and by post. Later on the same day, the applicant replied to the email stating, in effect, that she thought that they would be negotiating further on the following day.

4. On 15 February 2017, during the next conciliation conference conducted by the Commission, the applicant and respondent entered into an agreement (Agreement) aiming to settle all of the issues between them. Clause D of the recitals to the agreement stated:

   D.The parties have agreed to settle any and all matters whatsoever, known or unknown, relating to the Employment, Complaints, cessation of employment and any other matter connected to her Employment, except claims for compensation under workers compensation legislation.

5. The Agreement required the respondent to pay $31,680.54 to the applicant “less deductions required by law, plus 75 hrs annual leave, less deductions required” . The payment was to be made two days after receipt of written notices of discontinuance of the complaints referred to at [7] above.

6. Clause 3 of the Agreement provided:

   3.The payment is made in full release and settlement. In consideration of payment, the Employee, Ms Fadheel, releases and indemnifies:

   (a)DHM[1]

   [1] The respondent.

   (b)its related body corporates

   (c)all of their officers, servants and agents, including …

   from any and all claims whatsoever arising out of or in connected [sic] with

   (d)her Employment;

   (e)any Entitlement;

   (f)the Complaints;

   (g)the cessation of her employment.

   (Emphasis in original)

7. Clause 7 of the Agreement provided:

   7.In consideration of the payment, Ms Fadheel’s employment ends by reason of resignation effective 1pm, 10 February 2017, by signing this agreement.

8. In cl.8, the applicant warranted that she voluntarily entered into the Agreement.

9. Clause 9 provides that the Agreement may be pleaded by the respondent as a bar to any proceedings taken by the applicant.

10. “Claims” was defined in the Agreement to mean:

    … any and all complaints, actions, suits, cause of action, demands, claims, debts, proceedings, costs or expenses (including legal costs or expenses) verdict or judgments or any other liability of any kind whether in law, in equity, under statute or otherwise, which Ms Fadheel now has, or could, would or might have had but for this agreement, whether or not known at the date of this Agreement other than any claim for compensation under workers compensation legislation.

11. On 21 February 2017, the respondent paid the applicant $23,132.75 in satisfaction of its obligation under the agreement. This amount constituted payment of $1,662.31 in respect of annual leave together with $290.90 leave loading and $31,680.54 as a lump sum termination payment less a deduction of $10,501.00 for tax payable.

The new claims

1. In spite of the Agreement and the payment made by the respondent, the applicant lodged a further claim in the Commission on 28 February 2017 concerning the termination of her employment. The applicant claimed that there was “a breach of the general protections, forcing for resignation by threatening with a termination. I received a formal termination on 16/02/17”.

2. In response to the question “what reasons (if any) did the Respondent give for dismissing you” the applicant wrote (without alteration):

   I lodged a formal complaint for antibullying to fair work commission and from the first hearing day on 6/12/16 I threatened with termination then I received very abusive letter by the HR Manager threatening with termination and lies accusation, then I received on 9/1/16 another abusive letter, then on 23/01/17, then on 04/02/17 and all of them unfair and harassing and put the pressure on me to leave or terminate my job, knowing I was forced to attend retraining and refused to offer me a job for my qualification and I applied for workcover because I really effected by the treatment then my GP suggested to offer me different position in the company, on the 10th feb the HR Manager and the patient service Manager attended the hearing day with their lawyer and they decided to offer me six months payment and resignation. then they agreed to offer me 12 months payment and to discontinue all the complaints for antibullying, antidiscrimination, and the general protection circuit court.

   The agreement offered on 10th Feb with the commissioner and the commissioner encouraged me very much to accept it, then the lawyer said we can give you time up to Tuesday 14 Feb to think about it and send us a fax if you agree or not, then I said what if I don’t agree about it, he said we would continue for the claims, then the commissioner gave us another day for hearing by the telephone conference on 15/2/17 Wednesday at 2.00p.m.

   I was thinking about the agreement and I founded not in my benefit so I sent a letter to the lawyer and to the HR that’s I don’t agree about one year payment and also I haven’t got any payment from the workcover from 4/1/17 up to 10/02/17, the insurance company keep refusing the payment and defence the management, then I decided to send it on 13 feb, 2017 at 5.00p.m.

   on 14/02/17 I received an email to terminate my job because I don’t accept their proposal and he didn’t mentioned about the agreement, then I sent him back we would talk at 2.00pm with the commissioner about the agreement.

   To follow please:

   on 15 Feb, 2017 I attended the conference and the other party by phone, the lawyer said the employer dismissed Zena because she sent us letter disagree with the agreement then I said why you didn’t say if I don’t agree with the agreement you would dismiss me, the commissioner said that too why you didn’t say if you don’t agree about the agreement we would dismiss you.

   Then the HR Manager said ok we would reinstatement for her and she can still sign the agreement, then I signed because I had no choice to refuse, and the agreement said offer you $31,600 with less deduction by law, remove your warning letter, and to resign.

   However after I signed the agreement and I discontinue the claims forms on 15 feb/2017.

   on 16 Feb, 2017 afternoon I received a formal letter termination from the HR Manager, I couldn’t do anything because I signed the agreement and I did discontinue 3 complaints.

   Then they paid me with wrong category under termination employment) by ATO and the employer deduct or ATO $10,500 32% from my payment and I asked 3 lawyers about what’s happened to me and what’s they wrote in the agreement and also I asked the tax officers they all told me this is termination by the employer, this is not resignation this is victimization and unlawfull treatment, and unfair dismissal”.

   please, I need an urgent mediation by the fair commissioners and to investigate the way I treated by the employer, how they tricked me many times since I started up to now, too much lies and no trust, no respect, play with me emotionally, prevent me from working and it’s really effected to me psychological and physicall they really destroyed me between 6/12/16 up to now and they push me to complain against them because they really have a criminal mind and they really discriminated me and harassing me.

   (Emphasis in original)

3. On 15 May 2017, Deputy President Sams of the Commission certified pursuant to s.368 of the FW Act, that the Commission was satisfied that all reasonable attempts to resolve the dispute had been, or were likely to be, unsuccessful. The Deputy President also advised pursuant to s.368(b), that neither arbitration under s.369 of the FW Act, nor a general protections court application in relation to the dispute, would have a reasonable prospect of success.

4. On 27 June 2017, the Deputy President published a decision in which he stated that he was satisfied that the application under s.365 of the FW Act had no prospects of success, was groundless and futile and was an abuse of process: Fadheel v Douglass Hanly Moir Pathology Pty Ltd [2017] FWC 3382. He subsequently made orders that the applicant pay costs to the respondent.

5. In his decision, Deputy President Sams referred to the Agreement and said, at [51]:

   … The terms of settlement could not have left the applicant (or anyone) with any doubt at all that she had agreed not to lodge or continue any claim, known or unknown, against the respondent. It was utterly appalling conduct for which the applicant should be ashamed of. For one who proudly proclaims her high qualifications and who professes to be far better educated than her managers, it beggars belief that she would totally ignore the agreement she accepted and for which she received a significant amount of money.

6. On 29 May 2017, the applicant commenced these proceedings making the same claims she had in the 2017 proceedings in the Commission.

Consideration

1. The respondent relied upon the Agreement made on 15 February 2017 to argue that the applicant has no reasonable prospects of successfully prosecuting her claim. While there is no doubt that the Agreement covers the factual matters sought to be raised in these proceedings; that is, the termination of the applicant’s employment by the respondent, the law concerning the effect of settlement agreements is more complicated than the respondent’s submissions might suggest.

2. The respondent effectively argues that there has been accord and satisfaction. In Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500; [1998] HCA 33, Gummow J citing Dixon J in McDermott v Black (1940) 63 CLR 161, 183-185; [1940] HCA 4 (McDermott), explained that:

   116… the essence of accord and satisfaction “is the acceptance by the plaintiff of something in place of his cause of action”, that the accord is the agreement or consent to accept the satisfaction and that, upon provision of the satisfaction, there is a discharge which extinguishes the cause of action.

   See also El-Mir & 1 Or v Risk [2005] NSWCA 215 at [48]-[54] (McColl JA) (El-Mir).

3. However, as Dixon J explained in McDermott, what the claimant takes is a matter for agreement. Where the agreement is only to release a claim upon fulfilment of the promise made by the other party to the agreement, until satisfaction of that promise, the accord is only executory and cannot bar the claim.

4. In El-Mir, McColl JA explained:

   54The question whether there has been an accord and satisfaction is one of fact”: Day v Mclea (1889) 22 QBD 610 at 613 per Lord Esher MR; Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 at 427, per Jordan CJ; see also Neuchatel Ashphalte Co Ltd v Barnett [1957] 1 WLR 356. It turns upon determining the parties’ intentions, which may be discerned from the terms of any document said to constitute all or part of the agreement or in the surrounding circumstances: Ballantyne v Phillott [1961] HCA 17; (1961) 105 CLR 379 at 398 per Menzies J.

5. It is perhaps arguable here, that the applicant only agreed to release the respondent from all claims upon payment by it, of the amount promised in cl.1 of the operative part of the Agreement: cl.3 refers to the payment as being made “in full release and settlement”. However, the same clause introduces some ambiguity by stating that the applicant “releases and indemnifies” the respondent in consideration of payment. Clause 7 adds to this, stating that “in consideration of the payment” the applicant’s “employment ends by reason of resignation … by signing this agreement.”

6. In my view, cl.9 resolves the issue. It provides that the Agreement may be pleaded in a bar to any action in connection with any matter referred to in the Agreement. That suggests that the entry into the Agreement itself, constituted both the accord and satisfaction, and left the applicant only with any remedy in connection with the Agreement itself.

7. In any event, whether or not the Agreement was an accord executory does not change the result because the respondent paid the applicant under the terms of the Agreement and, for that reason, the accord was satisfied and the claims relating to the termination of the applicant’s employment were released.

8. The applicant suggested that the Agreement was not enforceable because she was forced into making it. As I understand her argument, the threat was that if she did not accept the Agreement, her employment would have been terminated and that she would not have received any compensation from the respondent without pursuing her proceedings.

9. While it may be accepted that the applicant felt that she was under some pressure to enter into the Agreement, I consider that the applicant’s argument does not provide a reasonable basis for concluding that the agreement might be unenforceable.

10. First, there is nothing to suggest that there was any special disability, unconscionable conduct or undue influence in the sense identified in cases such as Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14; Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392, 424‑425; [2013] HCA 25 at [117] and Thorne v Kennedy [2017] HCA 49 at [26] – [40].

11. Secondly, there is nothing to suggest that any pressure felt by the applicant was beyond what the law is prepared to count as legitimate so as to constitute duress: see Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, 45-46 (McHugh JA) and Australia & New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149 at [66]; [2005] NSWCA 344.

Conclusion

1. For those reasons I am satisfied that the applicant has no reasonable prospects of success in these proceedings and that there should be summary judgment for the respondent.

1. In light of that conclusion, it is unnecessary to resolve the other two arguments raised by the respondent in its application.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Smith

Date:     30 November 2017