Finance Sector Union of Australia v Commonwealth Bank of Australia
[1999] FCA 824
•18 JUNE 1999
Finance Sector Union of Australia v. Commonwealth Bank of Australia [1999] FCA 824
Breach of Contract
Workplace Relations Act 1996 (Cth), s 178(6)
Federal Court of Australia Act 1976 (Cth), s 33C
Lidden v Composite Buyers (1996) 139 ALR 549, cited
Zhang v Minister for Immigration, Local Government and Ethnic Affairs (1993) 45 FCR 384, cited
Silkfield Pty Ltd v Wong (1998) 159 ALR 329, cited
ACCC v Giraffe World Australia Pty Ltd (1998) 156 ALR 273, cited
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 643, cited
FINANCE SECTOR UNION OF AUSTRALIA & ANOR v
COMMONWEALTH BANK OF AUSTRALIA LIMITED
N 262 OF 1999
O'CONNOR J
SYDNEY
18 JUNE 1999
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 262 OF 1999
BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA First Applicant
KENNETH MACEY
Second Applicant
AND: COMMONWEALTH BANK OF AUSTRALIA LIMITED Respondent
#DATE 18:06:1999
JUDGE:
O'CONNOR J DATE OF ORDER: 18 JUNE 1999 WHERE MADE: SYDNEY
THE COURT ORDERS THAT:
1. The respondent's application for a stay of Federal Court proceedings N 262 of 1999 be adjourned until the appeal in NG 823 of 1998 is either determined or until further order of the Court.
2. Pursuant to the provisions of s 33J(1) of the Act the Court fixes 2 July 1999 as the date before which a group member may opt out of the representative proceedings in this matter.
(a) Pursuant to the provisions of s 33Y(1) of the Act, the Court approves the form and content of the notice provided by the applicant to be given to the group members.
(b) The notice shall be served by the first applicant on the group members by post at the last known address of each member of the first applicant as appears in the records of the first applicant.
(c) Where the first applicant has no address or no current address for a group member the respondent shall supply the last known address for that group member to the first applicant and the first applicant shall serve the notice by post on that member at the address provided by the respondent.
3. The question of the application of and alleged breach of Clause 42 of the Commonwealth Bank of Australia Officers Award 1990 be tried separately from any other question arising in the proceedings.
4. The applicants' motion for an order for injunctive relief, as indicated in paragraph 4 of its Amended Notice of Motion, be dismissed.
5. The respondent's motion for the orders as contained in paragraph 2 of its Amended Notice of Motion filed on 31 May 1999 be dismissed.
6. Costs be costs in the cause.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 262 OF 1999
BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA First Applicant
KENNETH MACEY
Second Applicant
AND: COMMONWEALTH BANK OF AUSTRALIA LIMITED Respondent
JUDGE: O'CONNOR J DATE: 18 JUNE 1999 PLACE: SYDNEY
REASONS FOR INTERLOCUTORY JUDGMENT
1 A number of amended notices of motion were filed by the parties in these proceedings and heard at the same time.
BACKGROUND
2 By an order of the Court of 5 March 1999 an Application commenced by the FSU on 12 December 1998 ("the first proceedings") NG 823 of 1998 was consolidated with a representative action between the same parties in which the parties claim:
* the imposition of a penalty on the respondent for breach of clause 42 of Commonwealth Bank of Australia Officers Award ("the Award").
* damages for breach of the contracts between the respondent and each of a number of named persons who are members of the first applicant.
3 Both applicants are pursuing representative proceedings for breach of contract.
4 The respondent is presently seeking leave to appeal from this order of the Court.
5 On 1 April 1999 the applicants commenced these proceedings (N 262 of 1999) ("the second proceedings"). Again these proceedings were commenced by the applicants as representative parties. As with the first proceedings they seek award penalties or orders arising under s 178(6) of the Workplace Relations Act 1996 (Cth) ("the Act") and damages for breach of contract.
6 The applicants in their amended notice of motion ask the Court to make the following orders:
"1. Pursuant to the provisions of s 33J(1) of the Act the Court fixes 14 June 1999 as the date before which a group member may opt out of the representative proceedings in this matter.
2. (a) Pursuant to the provisions of s 33Y(1) of the Act, the Court approves the form and content of the annexed hereto and marked "A", as the notice to given to the group members.
(b) The notice shall be served by the first applicant on the group members by post at the last known address of each member of the first applicant as appears in the records of the first applicant.
(c) Where the first applicant has no address or no current address for a group member the respondent shall supply the last known address for that group member to the first applicant and the first applicant shall serve the notice by post on that member at the address provided by the respondent.
3. Pursuant to Order 29 Rule 2 of the rules of Court that the decision on the question of the application of and the alleged breach of Clause 42 of the Award be tried separately from any other question arising in the proceedings.
4. An order that the respondent, until further of the Court be restrained:
(a) from giving directions to any of the persons purportedly seconded to EDS (Aust) Pty Ltd., requiring them to transfer to any other position within the respondent (other than with the consent of such person);
(b) be restrained from encouraging or inciting or from entering into any agreement or arrangement with EDS (Aust) Pty Ltd whereby persons purportedly seconded from the respondent to perform work for EDS (Aust) Pty Ltd have their offer of employment with EDS (Aust) Pty Ltd withdrawn.
5. Such further or other orders as the Court considers appropriate."
7 The respondent, in its amended notice of motion, seeks the following:
"1. An order that the proceedings be stayed pending the resolution of proceedings NG 823 of 1998 in this Court.
2. Further, and in the alternative to prayer 1:
(a) an order that paragraph 1 and 3 on page 1 of the application and prayer 4 on page 8 of the application be dismissed to the extent that the first applicant purports to act in a representative capacity;
(b) an order that paragraph on page 1 of the application and prayers 2 and 3 on page 8 of the application be dismissed;
(c) an order that the applicants plead the facts relied upon in the making of the claims for relief in paragraphs 4, 5 and 6 of the application.
3. An order that the applicants pay the respondent's costs of this Notice of Motion.
4. Such further or other orders as the Court thinks fit."
8 There are three broad issues raised by these motions which are:
(a) Whether proceedings N 262 of 1999 should be stayed;
(b) If not, whether they should proceed as representative proceedings at this stage or at all; and
(c) Whether the respondent should be restrained from dealing with the employment affairs of those who are affected by the proceedings.
9 Affidavit evidence from both sides was tendered in support of the motions.
STAY APPLICATION
10 The respondent submits that as the claims in each of the "first" and "second" proceedings involve the same parties and subject matter (with minor drafting differences in the particulars) the second proceedings should be stayed.
11 As stated above the respondent is seeking leave to appeal from the order of the Court made in relation to the first proceedings and no decision has yet been made.
12 The respondent relies on the principle that when proceedings are pending in a court, a separate action in the same court should at least be stayed where -
1. Both actions involve the same parties and the same subject matter and
2. Where the hearing of the "first" will effectively disposed of, the need for the hearing of the "second".
13 This principle was discussed and applied in Lidden v Composite Buyers (1996) 139 ALR 549, a decision of Finn J. Both the parties claim the benefit of the decision.
14 It is not nor could it be denied by the applicant (respondent to the motion) that this proceeding concerns both the same parties and the same subject matter. However, the applicant, accepting that if the respondents are successful in their current appeal they would be obliged to recommence proceedings, wish to pursue their substantive claims promptly and retain, (described as an "insurance measure") the first proceeding in the event of any attacks on the second proceeding. In order to achieve that end and avoid duplication which would amount to an abuse of process, the applicants have given an undertaking not to proceed with the first proceeding while the second proceeding is on foot. They also say they would not oppose any application to stay the first proceeding if such an application were made by the respondent. The effect of this application to stay the second proceeding is, if it were granted to delay the hearing of this case on its merits for many months while the appeal on the question of jurisdiction is heard and determined.
15 The respondent however contends that the pursuit of this second proceeding will put parties to the unnecessary additional costs being incurred by the current appeal. That appeal does not affect the substance of the proceedings which are sought to be stayed, nor is there any difficulty on the part of the applicant in standing the appeal over, if this were the preferred course. However, this is a matter for the parties. There would be live issues, once the appeal is determined in favour of the applicant as to whether these two proceedings could or should remain on foot and whether unnecessary costs have been incurred and who should bear them.
16 The discretion to be exercised in relation to this stay of proceedings is directed towards preventing abuse of process. The respondent wishes to avoid additional cost, in particular. The applicant, is, on the other hand, anxious to have the issues between the parties decided as expeditiously as possible. This is litigation which directly concerns the employment status of a substantial number of people and the obligation of the respondent to them.
17 Further progress as to the issues between the parties is possible during the time in which the appeal will be heard because to date, no question of substance has been determined. The undertaking by the applicant in relation to the first proceedings will prevent any possible duplication. However, at the conclusion of the appeal, if it is unsuccessful, different considerations will apply. If this part of the notice of motion is adjourned until the conclusion of or stay of the current appeal then the matters of which the respondents complain will be crystallised and any possibility of abuse of process easier to determine. I propose to take that course and adjourn the stay application.
CLAIMS FOR REPRESENTATIVE CAPACITY
18 Part IVA of the Federal Court of Australia Act 1976 (Cth) provides for the hearing of representative claims in the Court.
19 Section 33C of Part IVA relevantly states:
"(1) Subject to this Part, where:
(a) 7 or more persons have claims against the same person; and
(b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and
(c) the claims of all those persons give rise to a substantial common issue of law or fact;
a proceeding may be commenced by one or more of those persons as representing some or all of them.
(2) A representative proceeding may be commenced:
(a) whether or not the relief sought:
(i) is, or includes, equitable relief; or(ii) consists of, or includes, damages; or
(iii) includes claims for damages that would require individual
assessment; or
(iv) is the same for each person represented; and
(b) whether or the not the proceeding:
(i) is concerned with separate contracts or transactions between the respondent in the proceeding and individual group members; or
(ii) involves separate acts or omissions of the respondent done or omitted to be done in relation to individual group members."
20 The respondent seek orders that the applicant's claim in so far as it purports to act in a representative capacity should be dismissed because the claims of all persons in the affected group do not give rise to substantial common issues of law or fact as required under Part IVA. The respondent also says that, in so far as the particulars of the representative claim for damages for breach of contract are given, it is revealed that different issues arise in respect of the FSU and the other persons identified on whose behalf the representative action is brought.
21 The applicant (the respondent to the motion) however argues that the central requirements to be satisfied before a representative proceedings can be commenced have been satisfied in this case because -
(a) There are more than seven persons having claims against the same person,
(b) the claims arise out of the same, similar or related circumstances, and
(c) the claims do give rise to a substantial common issue of law or fact.
22 The evidence is that in excess of 70 people, employees of the respondent, were purportedly seconded to EDS (Australia) Pty Ltd in 1997. The claim is based on this action.
23 The first applicant has been given written authority by 64 of these persons to commence and maintain the proceedings against the respondent arising out of their contract of employment.
24 As employees of the first respondent the group is making claims against the respondent in relation to the breach of Clause 42 of the Award and also have claims against the respondent for breach of their contract of employment arising from their purported secondment. The essential difference between the claim based on breach of the award and the claim based upon breach of contract is the amount of money or penalty or damages which may be ordered.
25 The applicant argues that as all the claims arise from the employment of the members of the group with the respondent and arise from their purported secondment by the respondent to perform work for EDS (Australia) Pty Ltd from on or about 10 October 1997, substantial common issues of law and fact arise.
26 These are:
(a) whether there has been a breach of Clause 42 of the 1990 award;
(b) whether the terms of the 1990 unregistered agreement between the first applicant and the respondent became part of the contracts of employment of each of the members of the group;
(c) whether the respondent was entitled unilaterally to second the members of the group to perform work for EDS (Australia) Pty Ltd;
(d) whether the purported secondment of the members of the group from the respondent to the company known as EDS (Australia) Pty Ltd effectively terminated the contracts of employment of each of the said members of the group;
(e) whether there has been an effective termination of the employment of each member of the group such that they were entitled to payment under Clause (h) of the agreement;
27 Representative proceedings may be commenced whether or not the relief sought "includes damages" or includes claims for damages that would require individual assessment (s 33C(2)). Furthermore, Part IVA does not require the relief sought to be the same for each represented person.
28 The applicant submits the elements of the claims coincide and the claims by potential group members do not fall outside the scope of the legislation simply because they involve separate contracts or separate transactions between individual group members and represented parties.
29 In Zhang v Minister for Immigration, Local Government and Ethnic Affairs (1993) 45 FCR 384, French J said at 405:
"In the present case, the relationship between the circumstances of each group member is defined by a few common integers which leaves room for considerable diversity in circumstances which might support individual claims to set aside the review decisions. Some applicants may have complaints about aspects of the decision-making process which have nothing to do with the question whether or not they should be afforded an oral hearing. There may be applicants who are able to show that even if there is no common entitlement to the opportunity of an oral hearing, the particular circumstances of their cases require such a hearing as a matter of natural justice. Notwithstanding that possibility, I am satisfied that the claims of the members of the group as defined in the present application are connected by circumstances sufficiently related to warrant the use of the procedure under Pt IVA for the determination of the common issue of law defined in the application. In so holding, I have regard to the need for a purposive approach to the construction of s 33C(1)(b), bearing in mind the utility of determining the common issue in this way."
30 This reasoning has relevant application to this case. This case involves a mixture of common issues but also a number of individual circumstances.
31 The question then becomes whether the group is sufficiently connected to warrant the use of the representative process bearing in mind the purposive approach to the section and the utility of hearing the claims as a representative action. The legislation also requires that the common issue or issues must be substantial. The Full Court in Silkfield Pty Ltd v Wong (1998) 159 ALR 329 , when considering the width of this requirement said relevantly at 344:
"...it intended that a common issue would be justification for the use of the new procedure only where it was an issue with some special significance for the resolution of the claims of all the group members ... ie. likely to have a major impact on the conduct and outcome of the litigation."
32 The respondent argues that, as there is no claim for damages by the FSU, the fact that the contractual claim relies on incorporating the terms of the 1990 agreement between the respondent and the FSU into the contracts of employment, does not meet the requirements of s 33C in that the issues in common are not substantial and the differences in the claims are very substantial.
33 However the fact that causes of action, as in this case, arise under different legislation, or, in different ways and seeking different outcomes, will not of itself make representative proceedings inappropriate. Indeed, the members of the group do not even need to be suing in the same capacity. In ACCC v Giraffe World Australia Pty Ltd (1998) 156 ALR 273, Lindgren J held that the ACCC, with a statutory right of action, may be part of a representative group which had different causes of action from that pursued on its behalf.
34 The respondent argues that the provisions of s 33C(2) are not sufficiently wide to encompass the relief sought, by way of penalty for breach of award, by the applicants because the relief sought by way of representative action must be of the kind specified ie civil remedies. In addition the circumstances of the formation of contracts alleged between the Bank and the FSU and the persons named in annexure "L" to an affidavit sworn by Peter Kevin Presdee and the entitlement to and quantification of any damage for breach of contract are not specified or particularised sufficiently to allow an assessment to be made as to whether this matter could or should, at this stage proceed as a representative claim.
35 In my view a crucial matter in considering whether this claim should proceed as a representative action is the applicants' amended notice of motion also seeks an order to have separated and decided the question of the respondent's liability for the claim for breach of award under s 178 of the Act. As the applicant claims that both the breach of award case and the breach of contract case arise substantially out of the same facts and circumstances, there is great utility and a saving of cost to the parties as well as a saving of Court time in separately deciding the question of award breach. The applicant submits that to the extent that the respondent is concerned as to the appropriateness and the possible difficulty of hearing the damages case as a representative proceeding, the separation of the question of the award breach in a case with so many evidentiary matters offers a potential to reduce the detail and difficulty involved, yet permits the complete and final determination of all matters should the respondent be successful.
36 The respondent opposes the separation of the question of the respondent's liability for breach of the award on the basis of lack of utility. This opposition is difficult to understand. If, as is asserted by the respondent, there is no breach of the award then the whole action will be concluded by a decision on that matter. In my view the utility of determining that issue first is manifest. On the other hand, if the Award has been breached this decision will be relevant to the question of breach of the 1990 agreement and breach of the individual contracts, provided, of course, there has been an incorporation of the relevant clauses into the agreement and contracts of employment, another common and substantial issue between the parties.
37 The applicant argues that when and if the remaining issue is quantification of penalty and/or damage the matter would be in the first instance amenable to conciliation. If, however, at that stage, the progress of the matter, as a representative proceeding is judged inconvenient or without further utility, then there is provision under Part IVA to return it to the status of a series of ordinary claims. That this will be necessary could not be determined at this stage.
38 In my view the orders sought by the applicants will be beneficial to this litigation. The respondent accepts that the applicant has a right to commence representative proceedings and it bears the onus to establish that they should not be permitted to proceed in that form. There are, substantial issues of law and fact common to the parties and a representative determination of these issues will result in a considerable saving of time and cost to all concerned.
39 The additional arguments made by the respondent that some of the orders are premature and the remedies sought are beyond the terms of the section are not convincing. The complaints made, as to the pleadings, are essentially matters which go to particulars of a claim and no request for particulars has been made by the respondent at this stage. Section 33C(2) provides that a representative proceeding may be commenced "whether or not" the relief sought is as then specified. This does not limit, in my view, in any way the kind of relief sought, provided that the representative character of the claim is established. I am satisfied that the pleadings, as they presently stand, identify common issues of a substantial nature between the parties which require determination. I will make the orders sought to facilitate the progress of this matter as a representative claim and to have determined as a separate matter the claim for breach of the award. It follows that the application by the respondent to have the claims dismissed in so far as they purport to act in a representative capacity are dismissed, as is the application that the applicants plead the facts relied on in the making of the claims for relief in paragraphs 4, 5 and 6 of the application.
CLAIM FOR INJUNCTIVE RELIEF
40 The applicants, in para 4 of the amended notice of motion seek:
(a) order restraining the respondent from giving directions to any of the persons purportedly seconded to EDS (Australia) Pty Ltd., requiring them to transfer to any other position with the respondent (other than with the consent of such person) and
(b) be restrained from encouraging or inciting or from entering into any agreement or arrangement with EDS (Australia) Pty Ltd whereby persons purportedly seconded from the respondent to perform work for EDS (Australia) Pty Ltd, have their offer of employment with Eds (Australia) Pty Ltd withdrawn.
41 In support of this claim an affidavit of Peter Kevin Presdee was tendered without objection. He is the State Secretary of the NSW/ACT Branch of the FSU, Commonwealth Bank Officers Section of the FSU Australia.
Factual Background
42 A Mr Tran is one of the group seeking remedies in these representative proceedings. He was purportedly seconded to work with EDS (Australia) Pty Ltd in 1997. It is the status of this secondment which is central to this litigation.
43 By letter dated 10 May, the respondent wrote to Mr Tran and informed him he had been selected to fill a new position in the Customer Service Section of the respondent's Town Hall Branch although he did not apply for this position. On 11 May EDS wrote to Mr Tran and informed him that the respondent wished to terminate the purported secondment arrangement by which Mr Tran worked for EDS and, at the same time, withdrew an offer of employment made by EDS to him in December 1998 which he understood was to be open for 10 years from the date of secondment.
44 The applicant submits that the respondent has taken this action and given directions to a purportedly seconded person working at EDS (Australia) Pty Ltd in circumstances which suggest that the respondent is attempting to alter the factual basis of the case commenced by the applicants presently before the Court. By these orders it seeks to preserve the employment "status quo" of the respondent's employees involved in this case is concluded.
45 Counsel for the applicants describe the respondent's actions as having "an unfortunate air of decisions taken or moves made to affect the litigation rather than any genuine attempt to place somebody in appropriate employment".
46 The respondent opposes the making of these orders on two bases:
1. That in so far as the orders are sought to preserve a status quo, there is no status quo to preserve, and
2. In so far as the orders are needed to preserve a legal right, no legal right is pleaded or asserted for preservation by the applicant.
47 The respondent argues that the claims made in the proceedings are concerned with penalties for breach of an award and payment of money as damages for breach of contract which took place in 1997. The injunctive relief sought is directed towards ongoing actions by the respondent in relation to persons on whose behalf the current claims are brought, while the relief sought is in general terms. There is no evidence before the Court in relation to any person other than Mr Tran nor does the evidence related to the pleaded issues in the case before the Court.
48 The applicant in response to these submissions says it does not seek the orders to preserve the legal right of individuals or the group but to prevent what it describes as "improper directions and improper pressure on litigants engage in court proceedings".
49 The respondent, who has always asserted an employment relationship with these persons, submits that it is entitled to transfer Mr Tran in circumstances where the action proposed does not disadvantage the persons affected and that if persons in Mr Tran's position do not wish to be transferred, at the direction of their employer, their option is to leave the employment.
50 There is no challenge to the principle by either party that the Court may make orders against the respondent (against whom final relief is sought) if it is necessary to ensure the effective exercise of the jurisdiction invoked. Patricks Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 643 is authority for this proposition.
51 Nor is there any doubt that there are serious questions to be tried and determined in these proceedings, namely, whether there have been breaches of award, agreement and contract. If necessary, the balance of convenience must also be considered, in exercising the discretionary remedy sought.
52 While Mr Tran apparently did not seek and in fact, opposes his transfer to Customer Service of the respondent, it is being done without financial penalty to him. There is no evidence as to the situation of the others potentially affected by the order sought. Mr Tran's case, in the final proceeding depends on the Court finding as to whether he has been made redundant, ie. whether there has been a termination of his employment with the respondent as a result of the purported secondment. I do not consider that the actions of the respondent sought to be restrained affect the trial of that issue, nor is the applicant's assertion that these actions are being done as a form of improper pressure on litigants before the Court supported by the evidence. It is unfortunate that, in the circumstances of this case, the respondent has not chosen to consult persons like Mr Tran before taking the action complained of, however, I am not satisfied that any consequences which could flow from his accepting a transfer would have the effect asserted by the applicant nor that they have been taken for the reasons argued by the applicant. In my view injunctive relief is not required in this case to ensure the effective exercise of the jurisdiction involved. For this reason I will not make the orders sought.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Connor.
Associate:
Dated: 18 June 1999
Counsel for the Applicants: W R Haylen QC with R Reitano Solicitor for the Applicants: Geoffrey Edwards & Co Counsel for the Respondent: J Trew QC with J Fernon and A Gotting Solicitor for the Respondent: Freehill Hollingdale & Page Date of Hearing: 28 May 1999 Date of Judgment: 18 June 1999
0
7
0