Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803
Citation:
Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803
Parties:
FAIR WORK OMBUDSMAN v EASTERN COLOUR PTY LTD (ACN 001 852 071), SB EMPLOYMENTS PTY LTD (ACN 117 006 596), NB EMPLOYMENTS PTY LTD (ACN 117 059 319), LOUISA BARONIO and VINCENZO CATENO CATANZARO
File number:
QUD 376 of 2010
Judge:
COLLIER J
Date of judgment:
19 July 2011
Catchwords:
INDUSTRIAL LAW – whether employment relationship properly pleaded – freedom of association – whether employers joint and severally liable – whether employees jointly employed – whether concept of joint employment recognised in Australian law – whether employment structure can injure or alter position of employees – conduct of employers
PRACTICE AND PROCEDURE – whether paragraphs of pleadings should be struck out – O 11 r 16 Federal Court Rules – whether pleadings embarrassing – whether inconsistent allegations – failure to plead material facts – internal contradictions in pleadings – whether a completed cause of action pleaded – whether the use of the word “purported” is a fundamental flaw – whether defect in pleadings can be remedied by particulars
Legislation:
Workplace Relations Act 1996 (Cth) ss 178(1), 182(1), 208(1), 719, 792 Federal Court Rules O 11 r 8(2), O 11 r 16
Counsel for the First, Second, Third and Fourth Respondents:
Mr W Friend SC
Solicitor for the First, Second, Third and Fourth Respondents:
McKays Solicitors
Counsel for the Fifth Respondent:
Mr AK Herbert
Solicitor for the Fifth Respondent:
Hall Payne Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803
Case
[2011] FCA 803
Decision Date
CaseChat Overview and Summary
The Fair Work Ombudsman initiated proceedings against Eastern Colour Pty Ltd and others, alleging breaches of the Workplace Relations Act 1996 (Cth) and an industrial agreement. The respondents sought orders to strike out certain paragraphs of the Further Amended Statement of Claim (FASC), arguing that they were confusing, inconsistent, and did not properly plead an employment relationship or completed cause of action. The court had to determine whether the pleadings were adequate and whether any defects could be remedied through particulars. The court concluded that several paragraphs were indeed confusing and did not provide a clear statement of the case, thereby failing to give the respondents a fair opportunity to meet the allegations. The court found that the use of the word “purported” and the inconsistent allegations between paragraphs contributed to the overall confusion. The court ultimately ruled that certain paragraphs should be struck out and heard submissions on whether leave should be granted for the applicant to file a further amended statement of claim. The court emphasized that setting aside or striking out pleadings are serious steps that should only be taken in clear cases, but in this instance, the current form of the FASC did not present a case the respondents could effectively meet.
Orders
Orders of the court
Paragraphs 7, 8, 9, 10, 11(b), 11(c), 12, 18, 19, 20, 21, 23, 24, 25, 26, 28, 29, 30, 33, 34, 37, 38, 39, 40, 41, 42, 45 and 46 of the Further Amended Statement of Claim filed 1 December 2010 be struck out.
Note:
Background
Background to the litigation
The categories conveniently bundle the respondents’ objections to paragraphs in the FASC. I will adopt these categories for the purposes of this judgment, although I note that the categories make no reference to paragraphs 17, 28, 29, 45 and 46 to which there is reference in the notices of motion. Nonetheless I will consider paragraphs 17, 28, 29, 45 and 46 during the course of this judgment.Background The applicant to the substantive proceedings is the Fair Work Ombudsman. By Application filed 6 September 2010 the applicant seeks declarations and the imposition of penalties pursuant to, inter alia, s 719 and s 792 of the Workplace Relations Act 1996 (Cth) (“the Act”) against all respondents in relation to breaches of the Act and a number of provisions of an industrial agreement. The FASC is the subject of the relevant notices of motion was filed 1 December 2010 and followed the earlier Amended Statement of Claim filed 10 November 2010, and the original Statement of Claim filed 6 September 2010. In summary, the applicant alleges that the first, second and third respondents were employers of persons listed in the schedule to the FASC (“the employees”). The applicant also alleges that the fourth respondent (being at all material times a director of the first respondent) and the fifth respondent (being at all material times the solicitor and accountant for the first, second and third respondents) were persons knowingly concerned in the contraventions of the Act by the first, second and third respondents. The precise nature of the applicant’s case is, in light of the notices of motion before the Court, in dispute. In summary it appears to claim that:·the first, second and third respondents were employers of persons listed in the schedule to the FASC (“the employees”);·the employees worked in the fruit-picking industry;·the fourth respondent was at all material times a director of the first respondent;·the fifth respondent was at all material times the solicitor and accountant for the first, second and third respondents;·the first to fourth respondents were involved in contraventions of the Act including underpayment of and injury to the employment of the employees; and·the fifth respondent was associated with those contraventions. The first to fourth respondents were represented by different solicitors and counsel to those representing the fifth respondent. However I have already noted that the notices of motion filed by both sets of respondents are in all material respects identical. Further, it is clear from the submissions of Mr Friend SC for the first to fourth respondents and Mr Herbert for the fifth respondent that, so far as is material for the purposes of these proceedings, the respondents have a common position in respect of orders currently sought.Pleadings – general principles Principles pertaining to pleadings are well-settled. As observed by Murphy, Wilson, Brennan, Deane and Dawson JJ in Dare v Pulham (1982) 148 CLR 658 at 664:Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it (Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517); they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial (Miller v Cameron (1936) 54 CLR 572 at 576–7); and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon, supra, at 517–8; Sri Mahant Govind Rao v Sita Ram Kesho (1898) LR 25 Ind App 195 at 207.(cf Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 288, 293 and 302-303)
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
It follows that paragraphs 45 and 46 should also be struck out.Conclusion In Nulyarimma v Thompson [1999] FCA 1192 at [208] the Full Court adopted the following comments of Kirby J in Thorpe v Commonwealth [No 3] [1997] HCA 21:Setting aside, striking out, summarily dismissing or permanently staying proceedings of a litigant who has come to a court of law, are self-evidently serious steps. They are to be reserved to a clear case. If there is any doubt, a court should err on the side of allowing the claim to proceed. In this case, I consider that there is no doubt. Notwithstanding the gravity of the consequences of the striking out orders in this case, it is very clear that the paragraphs of the FASC in its current form, which I have ordered struck out, do not present a case which the respondents are able to meet. In Nulyarimma at [208] the Full Court continued:Even if a party makes good its attack on another’s pleading, a court will ordinarily permit the opponent to reframe the pleading so long as it is clear that there is point in doing so and that the further time and opportunity will have utility. The guiding principle is doing what is just. Courts, particularly today, strive to uphold efficiency and economy in the disposal of proceedings before them. But they also remember that pleadings are a means to the end of justice according to law. Pleadings are the servants, not the masters of the judicial process. The FASC in this case constitutes the third attempt of the applicant to frame a statement of claim. A further opportunity to plead will be the fourth. The opportunity to replead is not always given, and ultimately whether it is given depends on the circumstances of the case: Kowalski at [41]. I will hear submissions from the parties as to whether the Court should grant leave to the applicant to file a further amended statement of claim.
Ratio Decidendi
Legal Principle Established
In response the applicant has made extensive and very detailed submissions in support of its contention that paragraphs 7, 8, 9, 10, 37 and 38 of the FASC are not embarrassing. In summary, the applicant submits that:·Material facts are pleaded to sustain the allegation that there was employment by one or more of the respondents.·Each paragraph contains sufficient facts stating with clarity the case which must be met by the respondents.·Although the pleadings raise alternative arguments this does not of itself make the pleading embarrassing.·Paragraph 8 clearly pleads that the First Respondent employed each of the employees.·Paragraph 9 clearly pleads that in the alternative the first, second and third respondents employed each of the employees. Likewise paragraph 10 clearly pleads that in the alternative the second and third respondents employed each of the employees.·Paragraph 7 is not inconsistent with these alternatives, and is supported by the material facts particularised in paragraph 8.·It is reasonable for paragraphs 8, 9 and 10 to plead a conclusion of law, namely that the relevant employees were employed by the first respondent or the first, second and third respondents, or the second and third respondents, because these conclusions are supported by material facts and particulars. So, for example, in relation to the first respondent as employer the applicant pleads:o when the offer of employment was made (paragraphs 8, 8(a), 8(b), 8(c), 8(d));o who offered the employment (paragraph 8(i));o whether the person making the offer had authority (paragraph 8(i));o how the offer was accepted (paragraphs 8, 8(a),8(b),8(c),8(d));o the material terms of the contract (paragraphs 8(j)-(r) and paragraphs (w)-(y)).·Alternatively the applicant pleads the factual elements required to prove the existence of an employment contract with the first, second and third respondents as employer as follows:o when the offer of employment was made (paragraphs 9, 8(a), 8(b), 8(c), 8(d));o who offered the employment (paragraphs 8(i) and 9(b));o whether the person making the offer had authority (paragraphs 8(i) and 9(b));o how the offer was accepted (paragraphs 8, 8(a), 8(b), 8(c), 8(d);o the material terms of that contract (paragraphs 8(j)-(r) and paragraphs (w)-(y) and paragraphs 9(c)-(g)).·Alternatively the applicant pleads the factual elements required to prove the existence of an employment contract with the second and third respondents as employer as follows:o when the offer of employment was made (paragraphs 9, 8(a), 8(b), 8(c), 8(d));o who offered the employment (paragraphs 8(i) and 10(b));o whether the persons making the offer had authority (paragraphs 8(i) and 10(b));o how the offer was accepted (paragraphs 8, 8(a), 8(b), 8(c), 8(d));o the material terms of that contract (paragraphs 8(j)-(r) and paragraphs 8(w)-(y) and paragraphs 9(c)-(g) and paragraph 10(g)).·In relation to the use of the word “purported” in paragraph 7, it is apparent from that paragraph and the pleadings as a whole that the second and third respondents have sought to act as if they were labour hire companies by, amongst other things, making payments for work performed by each of the employees, when in reality the real employer was the first respondent.·Paragraphs 36 to 42 of the FASC highlight that the first, second and third respondents either established or “purported” or claimed to establish the relevant employment structure in which the employees were employed for the first 40 hours of a working week by the second respondent and by the third respondent for the remaining hours worked in any week, and that due to the creation of that employment structure the employees have not been paid proper overtime, thus constituting an “injury” in employment.Consideration