Foster v Corporate Protection Australia Group Pty Ltd

[2018] FCCA 3070

FEDERAL CIRCUIT COURT OF AUSTRALIA

FOSTER & ANOR v CORPORATE PROTECTION AUSTRALIA GROUP PTY LTD & ORS [2018] FCCA 3070

Catchwords:
HIGH COURT AND FEDERAL COURT – Federal Circuit Court – Procedure – other matters – pleadings – striking out pleadings.

Legislation:

Evidence Act 1995, s.131

Fair Work Act 2009 (Cth), ss.45, 345, 550(1)

Federal Circuit Court of Australia Act 1999, s.17A

Labour Hire Licensing Act 2017 (Qld)

Cases cited:

Apotex Pty Ltd v Les Laboratories Servier (No.5) (2001) FCA 1282

Devine Ltd v Bugden and Others (2003) QIRComm 380

Fair Work Ombudsman v South Jin Pty Ltd (No.2) [2016] FCA 832

Marcinow v Marketplace Communications Pty Ltd (2000) QIRComm 177

Spencer v The Commonwealth of Australia (1907) 5 CLR 418

First Applicant: MARK CHRISTOPHER FOSTER

Second Applicant: JARAD NICHOLSON-BLIESNER

First Respondent: CORPORATE PROTECTION AUSTRALIA GROUP PTY LTD

Second Respondent: PAULA HOLDEN

Third Respondent: TONY MITCHELL

Fourth Respondent: NYOKA DEANNE HARRIS

File Number: BRG 1063 of 2017

Judgment of: Judge Jarrett

Hearing date: 18 June 2018

Date of Last Submission: 18 June 2018

Delivered at: Brisbane

Delivered on: 21 June 2018

REPRESENTATION

Counsel for the First and Second Applicants: Mr Murdoch QC

Solicitors for the First and Second Applicants: Macpherson Kelley

Counsel for the First and Third Respondents: Mr Rauf

Solicitors for the First and Third Respondents: Carter Newell Lawyers

Counsel for the Second and Fourth Respondents: Ms Hartigan

Solicitors for the Second and Fourth Respondents: HWL Ebsworth Lawyers

ORDERS

1. The first respondent disclose the application made to the Labour Hire Licensing Regulator under the Labour Hire Licensing Act 2017 (Qld) by no later than 25 June 2018.

2. Paragraphs 18, 20, 21, 22, 46, 47 and 48 of the statement of claim filed on 27 October 2017 be struck out.

3. The applicants file and serve an amended statement of claim within fourteen (14) days of the date of these orders.

4. The respondents file and serve any reply within twenty-eight (28) days of the date of these orders.

5. The application be adjourned to 22 October 2018 at 9:45am for hearing of both liability and penalty (with an estimated hearing time of 2 days) in the Federal Circuit Court of Australia sitting at Brisbane.

6. By no later than 4:00pm on 8 October 2018, the applicants and the respondents shall each file and serve upon the other a document setting out any findings of fact or conclusions of law for which they contend.

7. By no later than 4:00pm on 15 October 2018, both the applicants and the respondents shall file a further document setting out any agreed facts and contentions of law.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 1063 of 2017

MARK CHRISTOPHER FOSTER

First Applicant

JARAD NICHOLSON-BLIESNHER

Second Applicant

And

CORPORATE PROTECTION AUSTRALIA GROUP PTY LTD

First Respondent

PAULA HOLDEN

Second Respondent

TONY MITCHELL

Third Respondent

NYOKA DEANNE HARRIS

Fourth Respondent

REASONS FOR JUDGMENT

1. At the commencement of this hearing earlier this week, senior counsel for the applicants handed up a draft consent order in which there was a proposed order that the first respondent disclose a certain application made to the labour hire licensing regulator under the Labour Hire Licensing Act 2017. The respondents resisted that order on the basis that the document was said not to be relevant to any issues in dispute between the parties. In my view it is likely to be relevant, and that order ought to be made.

2. The balance of the application that needs to be dealt with is a strikeout application with respect to certain parts of the statement of claim relied upon by the applicants. 

3. The application brought by the applicants is brought by them as employees of the first respondent. They are maritime security guards at the Caltex Oil Refinery at Lytton. The first applicant has been employed pursuant to two employment contracts, both in writing, one made in 2015, the second made in 2016. The second applicant has been employed pursuant to one employment contract made in 2016.

4. The basis of the applicants’ claim is that they were entitled to be paid pursuant to the Security Services Industry Award 2010 and are entitled to other entitlements provided for by that award. They allege that they had been underpaid by the respondent various amounts. The amounts have changed from time to time depending upon the particulars that have been delivered.

5. There are a number of claims that arise out of their assertion that the Award applies to their employment in the context of them having been engaged on individual employment contracts. They allege, for example, that there have been misrepresentations by the first respondent and for which the other respondents are also liable in contravention of s.345 of the Fair Work Act 2009; there have been unlawful deductions from their salary in contravention of the Fair Work Act; that there has been a failure to provide full details of various deductions in contravention of the Fair Work Regulations 2009 and the Act, and some other contraventions of the Regulations.

6. The first aspect of the statement of claim said to be liable to be struck out commences at paragraph 18. That is within a section of the statement of claim that deals with the claims made alleging contravention of s.345 of the Act. That is, they are the claims dealing with misrepresentation. It is said that in the payslips issued by the first respondent to the first and second applicants, the first respondent represented either expressly or by implication that the first and second applicants were not entitled to the benefit of an Award, that the first and second applicants had no classification under the Award and the first and second applicants were not entitled to be paid in accordance with the Award.

7. Some things need to be said about the arrangements for the employment by the first respondent of the first and second applicant. As I have indicated, they were employed on individual employment contracts. The first contract for the first applicant and the second applicant’s contract are in more or less the same terms. Those contracts, in clause 1.1.7, referred to an industrial award and direct attention to schedule 1 of the contract. There is, in schedule 1 of the contract, a provision which directs attention to the Security Services Industry Award. In the second contract signed by the first applicant, that reference is not just to the Award, but it is also a reference to a relevant enterprise agreement.

8. The enterprise agreement – the Corporate Protection Australia Enterprise Agreement 2009 contains within it a clause (clause 7.2) that provides that the Enterprise Agreement applies:

   …to the exclusion of any award or other industrial instrument or agreement, whether certified or not, except where otherwise specified.

9. In the payslips issued by the first respondent to the applicants in the top right hand corner there appears reference to the employee’s classification and the industrial award or agreement, and the provision is made for the insertion of the relevant descriptions.  The applicants are described as asset protection officers at Caltex, and reference is made in the relevant area to the individual employment contracts. 

10. There are no other references in payslips to the award – sorry, I should say there are no references in the payslips to the award or the enterprise agreement, and by reason of that it seems to be the applicant’s case that by that omission there was a representation that the first and second applicants were not entitled to the benefits of the award, the first and second applicant had no classification under the award, and they were not entitled to be paid in accordance with the award.

11. The respondents argue that that ought to be struck out because the plea cannot – simply cannot be made out. There is no reasonable prospect of the applicants succeeding on that claim. What the payslips direct attention to are the individual employment contracts. The representations – the express representations on the payslips are correct. The position description of each of the applicants as an asset protection officer at Caltex is factually right, and the reference to the individual employment contracts is not incorrect.

12. The individual employment contracts, particularly in respect of the first applicant depending upon when the payslips were issued, referred within themselves to the award.  In those circumstances, it’s difficult to conceive how the applicant’s argument that the payslips might carry the representations for which they contend. 

13. Bearing in mind the test to be applied under s.17A of the Federal Circuit Court of Australia Act, as explained in Spencer v The Commonwealth of Australia (1907) 5 CLR 418 and the other authorities and bearing in mind the care with which an application for summary judgment must be – summary dismissal must be approached, in my view there is no reasonable prospect of paragraph 18 – and the matters pleaded in paragraph 18 – establishing the representations for which the applicants content. The payslips could not arguably carry the representations contended for by the applicants. It is appropriate to strike out paragraph 18.

14. Paragraph 19 is different because, arguably, by reason of the interplay between clause 7.2 of the enterprise agreement, where it is referred to in the first applicant’s second employment contract that there is indeed the representation for which the applicants contend, paragraph 19 ought not be struck out. Paragraphs 20, 21 and 22 rely upon what are said to be misrepresentations of the relevant position that were made in email correspondence that passed between the second respondent and a commissioner of the Fair Work Commission. There seems to be no dispute that that correspondence occurred during the course of the conciliation process in the Commission. The respondents argue that, by reason of s.131 of the Evidence Act, the applicants will not be able to adduce evidence to support the pleadings in the statement of claim, particularly those in paragraph 21 and, therefore, the balance of paragraphs 20, 21 and 22 ought to be struck out, because it will be incapable of proof.

15. The applicants contend that the matter ought to be left to trial because the Court will need to make a decision about whether the process that was engaged in in the Fair Work Commission – the conciliation process – was caught by s.131 of the Evidence Act. The argument is that, whilst s.131 applies to settlement negotiations, the conciliation process in the Fair Work Commission was something different to the parties engaging in a settlement negotiation process. In support of that, the applicants take me to Marcinow v Marketplace Communications Pty Ltd (2000) QIRComm 177, and to this particular passage:

    During the course of these proceedings, I ruled that the evidence of a statement made at the conciliation conference in relation to whether or not the applicant was provided with written warnings, was admissible, for the following reasons:-

    *conciliation conferences cover more than settlement, in that quite often parties involved in them have no intention of reaching a settlement and see the conference as a venue to indicate the strength of their case.

16. On the basis of that, it is suggested that there is reason to think that the conciliation process might not fall within s.131 of the Evidence Act. The applicants made clear, however, that the position is not without doubt, and refer me to Devine Ltd v Bugden and Others (2003) QIRComm 380, where there is a discussion about what happens at a conciliation conference. The remarks made by the Commissioner in Macinow, that I have extracted in these reasons, might equally apply to parties who attend mediation conferences. I am not as naïve to think that every party that goes to a mediation conference is going there with an intention to reach a settlement in the case, rather than to make the point that their case is much stronger than the other side might think it is.

17. The authorities referred to me by the respondents and, in particular, the decision of Flick J in Apotex Pty Ltd v Les Laboratories Servier (No.5) (2001) FCA 1282. I will make it clear that, having regard to the policy behind s.131, and the text of that section, it is very broad in its application. In my view, it is apt to cover communications at a conciliation conference. In my view, there is no real prospect of successfully arguing to the contrary and, in my view, the applicants will be prevented from adducing any evidence of the emails set out in paragraph 21 of the pleading. If that is the case, those matters are incapable of proof, and there is no reasonable prospect of the applicants succeeding on those claims. Accordingly, I would strike out paragraphs 20, 21 and 22 of the statement of claim.

18. The next tranche of paragraphs are 32 to 34. Paragraphs 32 to 34 talk about contraventions of s.45 of the Fair Work Act, because the award was breached in a number of respects, having regard to the applicant’s inability to take meal breaks. There are a couple of arguments raised by the respondents, in respect of these paragraphs but, in my view, none of them succeed. The relief sought in the proceedings is not simply confined to a claim for compensation. The applicants also seek the imposition of pecuniary penalties and, if they are able to make out the breaches of s.45 as they allege, then they will be entitled to argue, at least, for the imposition of a pecuniary penalty.

19. The question really is whether they are likely to make out their claims, under s.45. In my view, that is a matter that does need to be left to the question of a trial, because as was demonstrated in argument, the real issue is whether it was operationally possible for the applicants to have the various entitlements, which they claimed they were not entitled to have – or they were denied it. The reason I just gave related to paragraph 25(a) and 25(b), 25(c), 26, 27 and 28. The claims made in respect to paragraphs 32 to 34 also rely on breaches of s.45, but they relate to underpayments. That is a question of evidence for the trial. I am not satisfied at all that the applicants will not have reasonable prospects of successfully prosecuting their claims for breaches of s.45, and that is a matter that can remain.

20. The final matter to be dealt with are the accessorial liability claims, set out in paragraph 47 of the statement of claim. I was taken to the now well-rehearsed judgment of White J, in Fair Work Ombudsman v South Jin Pty Ltd (No.2) [2016] FCA 832, it is clear that to succeed on an accessorial liability claim, under s.550(1) of the Fair Work Act, something more than a plea that somebody was involved in the contraventions is needed. The applicants, with respect, have attempted to do that, by pleading certain knowledge on behalf of the second respondent, the third respondent and fourth respondent. The real issue is whether those pleas go far enough.

21. In my view, they do not. They do not meet the requirements set out in South Jin, about what needs to be proved to establish accessorial liability but, in my view, that is simply a matter not of an inability to prove those things but a pleading point. It seems to me that the pleading, in paragraph 47, simply needs to be repleaded, in a fashion which addresses the matters that need to be addressed in a more particular way. So to the extent that there is opposition to paragraph 47, from the third respondent and, as I understood it, opposition from the second respondent, to paragraph 46, and 48 for the fourth respondent, those paragraphs will be struck out, but there will be leave to replead.

[RECORDED: NOT TRANSCRIBED]

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Date:  29 October 2018