Health Solutions (WA) Pty Ltd v Foley
[2014] WASC 197
•4 JUNE 2014
HEALTH SOLUTIONS (WA) PTY LTD -v- FOLEY [2014] WASC 197
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 197 | |
| Case No: | CIV:2677/2012 | 9 DECEMBER 2013, AND ON THE PAPERS BY WRITTEN SUBMISSIONS 14 & 28 FEBRUARY 2014 | |
| Coram: | KENNETH MARTIN J | 4/06/14 | |
| 21 | Judgment Part: | 1 of 1 | |
| Result: | Application for summary judgment refused Counterclaim dismissed as abuse of process | ||
| B | |||
| PDF Version |
| Parties: | HEALTH SOLUTIONS (WA) PTY LTD MICHELLE ASHTON FOLEY |
Catchwords: | Civil law and procedure Contract law Summary judgment Claim for liquidated sum as return of remuneration Contract of employment said to be procured by false representations knowingly made Rescission Deceit Damages Restitution impossible |
Legislation: | Business Names Act 1962 (WA) Evidence (Miscellaneous Provisions) Act 1958 (Vic) Oaths, Affidavits and Statutory Declarations Act 2004 (WA) |
Case References: | Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 88 ALJR 552 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 3] [2014] WASC 162 PNJ v R [2009] HCA 6; (2009) ALJR 384 Rowland v Divall [1923] 2 KB 500 The State of Western Australia v Rothmans of Pall Mall (Australia) Ltd [2001] WASCA 25 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MICHELLE ASHTON FOLEY
Defendant
Catchwords:
Civil law and procedure - Contract law - Summary judgment - Claim for liquidated sum as return of remuneration - Contract of employment said to be procured by false representations knowingly made - Rescission - Deceit - Damages - Restitution impossible
Legislation:
Business Names Act 1962 (WA)
Evidence (Miscellaneous Provisions) Act 1958 (Vic)
Oaths, Affidavits and Statutory Declarations Act 2004 (WA)
Result:
Application for summary judgment refused
Counterclaim dismissed as abuse of process
Category: B
Representation:
Counsel:
Plaintiff : Mr M L Bennett
Defendant : No appearance
Solicitors:
Plaintiff : Bennett + Co
Defendant : No appearance
Case(s) referred to in judgment(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 88 ALJR 552
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 3] [2014] WASC 162
PNJ v R [2009] HCA 6; (2009) ALJR 384
Rowland v Divall [1923] 2 KB 500
The State of Western Australia v Rothmans of Pall Mall (Australia) Ltd [2001] WASCA 25
1 KENNETH MARTIN J: Pursuant to leave and by my directions of 27 September 2013 the plaintiff, Health Solutions (WA) Pty Ltd, applies for summary judgment against the defendant Ms Foley pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 14, and also applies for judgment dismissing Ms Foley's counterclaim pursuant to RSC O 16.
2 These proceedings commenced in 2012 when the plaintiff, then represented by different solicitors, moved ex parte to successfully obtain search and seizure orders against the defendant.
3 At that time, the defendant was legally represented but, although she has not filed a notice of intention to act in person, she has in fact since March 2013 acted for herself without any legal representation. Moreover, she is no longer a resident of Western Australia, relocating, it would seem, to somewhere in rural Victoria.
4 From time to time since then directions hearings have been convened with Ms Foley appearing via video link or by telephone from Victoria. However, on this instant occasion, in circumstances I will explain, that did not occur.
5 The application pursuant to O 14 is explained by the plaintiff's outline of written submissions of 14 October 2013. It is heavily grounded on the defendant's alleged knowingly false representations to the plaintiff, concerning the level of her qualifications and work experience. This is said to have induced the subsequent contractual engagement with the plaintiff - which spanned a period of about six months, before it ended in circumstances I will also explain.
6 Needless to say, it is trite that summary judgment applications by O 14 or O 16 invoke powers that must be exercised with great care. The power to circumvent a party's ordinary right to a trial should not be exercised unless it is clear that there is no real question to be tried as between the parties: see Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99; Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] and The State of Western Australia v Rothmans of Pall Mall (Australia) Ltd [2001] WASCA 25 [1], [2], [20] and [36].
The O 14 application
7 Described in the outline of written submissions, the plaintiff's case is put this way:
10. The plaintiff's claim is immensely simple. It is that the defendant lied as to her qualifications and work experience. The degree of lie is immaterial. It appears on the existing pleadings that the defendant concedes that insofar as she asserted that she had obtained one degree with distinction that was false. The evidence of enquiries made annexed to the affidavit of Mr Stoll and Ms Davies raises an overwhelming case that the defendant lied as to her qualifications with regard to the New York University and with the New York Jets.
11. The affidavit of Mr Stoll makes plain (what is in any event obvious) that the plaintiff relied upon the accuracy and truthfulness of Ms Foley's curriculum vitae attached to her application for employment with the plaintiff.
12. Any contract between the plaintiff and the defendant (whether it be an employment contract or a consultancy) rests on this fraudulent foundation. On the evidence before the Court there is no possible defence. Accordingly the Court should grant the application and enter judgment for the amount claimed together with interest from the date such damage was incurred until judgment.
....
14. The plaintiff relied on the representations made by the defendant in offering her a contract of employment. The contract of employment is capable of rescission and should be declared void ab initio.
8 However, Ms Foley opposes the plaintiff's application for judgment pursuant to RSC O 14. She similarly opposes dismissal of her counterclaim under RSC O 16.
9 The contentions as to Ms Foley's alleged fraudulent misrepresentations concerning her qualifications and employment history only arose out of amendments to the plaintiff's writ of summons, filed on 15 August 2013 and in an amended statement of claim (ASOC) of the same date.
10 The amended indorsement of claim asserts:
1. The plaintiff's claim arises in respect of:
(a) a contract between the plaintiff and the defendant dated 13 July 2012;
(b) the defendant's conduct which fraudulently induced the plaintiff to enter into the contract;
(c) alternatively the defendant's conduct which was misleading and deceptive contrary to s 18 of the Australian Consumer Law (WA) in schedule 2 of the Fair Trading Act 2010 (WA) or alternatively section 18 of the Australian Consumer Law in schedule 2 of the Competition and Consumer Act 2010 (Cth) which conduct induced the plaintiff to enter into the contract;
(d) loss and damage suffered thereby by the plaintiff.
5. A declaration that the Contract of Employment and any other contracts between the plaintiff and the defendant are void ab initio.
6. Alternatively orders pursuant to section 237 of the Australian Consumer Law in Schedule of the Fair Trading Act 2010 (WA) or alternatively section 237 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) that the Contract of Employment and any other contract between the plaintiff and the defendant are void.
7. Payment of the sum of $132,707.51.
12 By the plaintiff's ASOC it is contended Ms Foley was 'employed' by the plaintiff from mid-April 2012 as a consultant, then from 7 May 2012 in the position of Chief Operating Officer (COO) of the Peel Health Campus.
13 Paragraph 5 of the ASOC contends that Ms Foley's curriculum vitae, submitted about 20 March 2013, when she responded to an advertisement placed seeking applicants for the position of Chief Financial Officer (CFO), made representations as to her qualifications and work experience. Four aspects are raised, defined collectively as 'the Representations'.
14 As to the fourth of these representations, concerning its reference to Ms Foley having worked as a Deal Coordinator/Research Analyst for Merrill Lynch (Corporate Banking) between July 1998 and March 2001, it is accepted that no evidence was adduced at the summary judgment applications seeking to falsify that representation (see ts 68).
15 It is therefore only three employment and academic history representations which are presently sought to be ventilated as falsely made by Ms Foley on this application. The three relevant representations as alleged are (see par 5 ASOC):
(a) [Miss Foley] had been awarded the degree of Masters of Business Administration (Cum Laude), New York University;
(b) [Miss Foley] had been awarded the degree of Bachelor of Science (Magna Cum Laude), New York University;
(c) [Miss Foley] had worked as a Business Manager/Reporting Analyst for NFL – NY Jets Franchise between 03/2001 and 05/2007.
16 By par 6 of the ASOC it is said Ms Foley was offered the position of COO of the Peel Health Campus on a contract weekly basis through her business Axiom Strategic Consulting, and that Ms Foley accepted the offer. A contractual relationship thereby arising is referred to at par 6 ASOC as 'the Consultancy Contract'.
17 It is next contended that the plaintiff, still acting in reliance on the truth of the false representations about her qualifications and work experience provided Ms Foley with a formal letter of employment on 13 July 2012. The letter set out her terms and conditions of employment (defined as 'the Contract of Employment'). The letter's terms are said to have been accepted by Ms Foley then signing and returning a copy of that letter to the plaintiff, on or about 16 July 2012 (par 12 of the ASOC). This appears to have been accepted by Ms Foley (see par 12 of the Second Amended Defence dated 25 November 2013).
18 It is then fundamentally contended that both a consultancy contract and a contract of employment with the plaintiff as defined by the ASOC (see par 13) were 'induced by fraud', in that Ms Foley:
(a) did not hold a degree of Masters of Business Administration (Cum Laude) from the New York University;
(b) did not hold a degree of Bachelor of Science (Magna Cum Laude) from the New York University;
(c) was not employed as a Business Manager/Reporting Analyst for NFL - NY Jets Franchise between 03/2001 and 05/2007.
19 It is next said that between April and September 2012, Ms Foley issued invoices to the plaintiff for management consultancy fees and that the plaintiff paid Ms Foley $132,707.51, whilst unaware of the matters referred to in par 13.
20 The ASOC contends the consultancy contract and the contract of employment were both induced by Ms Foley's alleged fraudulent representations. This is because it is said the plaintiff would not have entered into any contract with Ms Foley - but for her false representations.
21 By par 20 of the ASOC the plaintiff concludes that by reason of such matters it has suffered loss and damage. By the accompanying particulars it identifies the loss as the payment of Ms Foley's management consultancy invoices, in the amount of $132,707.51.
22 The plaintiff's application for summary judgment by RSC O 14 and O 16 was supported by three affidavits filed and read on behalf of the plaintiff. These were affidavits of:
(a) Mark Hilton Stowell, a director of the plaintiff, sworn 14 October 2013;
(b) Michelle Margaret Davies sworn 14 October 2013; and
(c) Jon Fogarty, another director of the plaintiff, sworn 24 October 2013.
23 Attached to Mr Stowell's affidavit as attachment MHS 1, is an email from 'SEEK Job, Application ... on behalf of Ashton Foley', applying for an advertised vacancy. Enclosed therein is a CV of an Ashton Michelle Foley. The document makes reference under a heading 'Education' to Ms Foley holding the degree Masters of Business Administration (Cum Laude) from the New York University, Stern School of Business, awarded May 1997.
24 A further entry, also seen under the heading 'Education', refers to a Bachelor of Science (Magna Cum Laude), again from New York University, but referring to the College of Arts and Sciences, and awarded May 1993.
25 The CV then proceeds to an employment history, including periods of employment with Western Power (as a 'Financial Analysis Manager'), Open University Australia (as a 'Director of Strategy'), Phosphagenics Ltd (as a 'Senior Business and Strategic Planning Analyst') and, most relevantly, with the New York Jets National Football League franchise (as a 'Business Manager/Reporting Analyst').
26 Further references are made to an employment history with both 'Merrill Lynch (Corporate Banking)' and with Pfizer Pharmaceuticals.
27 Attachment MHS 3, at pages 17 to 19, is a copy of a three page letter sent to Ms Foley concerning terms of her engagement as COO of Peel Health Campus - identifying the backdated commencement date for this position as 14 May 2012.
28 Item 1 of the terms states:
Your total remuneration package will be $250,000 per annum, inclusive of superannuation.
29 Item 3 says:
The Company provides four (4) weeks annual leave and ten paid personal days per annum paid at an equivalent base salary.
30 Item 11 says:
Your appointment may be terminated by either party giving to the other party four weeks' notice in writing, or payment or forfeiture in lieu of notice as the case may be with all statutory obligations upheld.
31 Ms Foley appears to have countersigned that document, as is indicated below words 'I accept the above offer', accompanied by the inserted date 16 July 2012.
32 Attachment MHS 4 at pages 23 - 36 collects 14 invoices issued to Health Solutions (WA) Pty Ltd from 'Axiom Strategic Consulting' between 4 May 2012 and 21 September 2012.
33 These invoices appear to be issued in respect of varying periods, and mostly refer to 'Consulting Services' at a rate varying between $580 per day inclusive of GST and $961.54 per day plus GST. The last of the invoices was for a period of 10 days ending 28 September 2012.
34 The key temporal point to be recognised is that any engagement of Ms Foley by the plaintiff, either as a consultant or as an employee, appears to have ceased by the end of September 2012. That end date is highly relevant in circumstances by which the plaintiff, on this summary judgment application, effectively seeks an ex post facto rescission of that whole contractual arrangement. From that basis, it would claim back from Ms Foley the payments made between May and September 2012.
35 Returning to Mr Stowell's affidavit, I note that he says that the plaintiff relied upon the truthfulness and accuracy of Ms Foley's CV, in offering her contract work via her company, or the contract of employment (par 19). For the purposes of this application his statement to that end, as well as a like statement as to reliance by Mr Fogarty in par 30 of his affidavit, is not contested and can be accepted.
36 At par 17, Mr Stowell's affidavit speaks of his knowledge of the engagement of another consultant after the event to investigate Ms Foley's qualifications. Attachment MHS 6 to Mr Stowell's affidavit is a copy of a letter from New York University of 23 January 2013. It is addressed to the plaintiff's investigating consultant, a Mr Richard Franklin. The advice from a Mr Andrew Morton advised Mr Franklin:
This is to confirm that a search of our records system did not show an MBA transcript or degree for the names Michelle Gonzales or Michelle Ritter. If the student is able to provide any further information, please let us know and we can check again.
37 On the basis of that communication Mr Stowell swears on behalf of the plaintiff (at par 18) that he verily believes Ms Foley
does not hold the qualifications of Master of Business Administration (Cum Laude) or Bachelor of Science (Magna Cum Laude) and that she misled and deceived the plaintiff at the time she applied for employment.
38 Michelle Davies is a solicitor employed by the plaintiff's solicitors. Her affidavit collects similar information concerning Ms Foley's antecedent qualifications and employment, via attachments MMD 4 through MMD 7. The purport of all this otherwise hearsay evidence is to the effect that enquiries would indicate Ms Foley does not hold any degrees whatsoever from New York University, after searches having been conducted in the names of Ashton Michelle Foley, Michelle Marie Gonzales, Michelle Ritter, Michelle Ariotti, Michelle Foley and Ashton Foley.
39 By attachment MMD 6 it is seen that the plaintiff's solicitors were advised on 13 October 2013 by a Mr David Gordon, Senior Associate Director of Records, Registration and Enrolment Services at New York University, Stern Graduate Division, there was no record of an MBA ever having been awarded to a Michelle Ashton Foley on or around May 1997. Mr Gordon then further advised:
While students and graduates are permitted to request that access to their records be blocked, this presupposes the existence of such a record. In the case of Michelle Ashton Foley, no such exists at the New York University Stern School of Business that she attended, in any capacity, during or about the time frame indicated. (emphasis in original)
40 Under attachment MMD 7 the plaintiff's solicitors are seen to have been advised that Mr Gordon's response seen above, as regards the name Michelle Ashton Foley, applied equally to the names Michelle Gonzales, Michelle Ritter, Michelle Ariotti, Ashton Foley and Michelle Foley.
41 Attachments MMD 8 and MMD 9 are correspondence with the New York Jets seeking verification of Ms Foley's claimed prior employment. MMD 9 is the email from a Mr Tony Morell, Manager Facility Security of the New York Jets, to the plaintiff's solicitors. It advises of an investigation involving the New York Jets Security Department:
After an exhaustive search of our employment records, no record was found of a 'Michelle Ashton Foley' or Michelle Gonzales or Michelle Ritter or Michelle Ariotti or Ashton Foley or Michelle Foley ever being employed by the New York Jets LLC. No record of this individual exists at this organisation.
42 Sourced firsthand hearsay evidence is allowed as admissible on summary judgment applications if the source of the information is clearly provided: see RSC O 14 r 2(2). That is the case here. The weight of such received evidence is another matter. Where there is an assertion based upon hearsay information, much will depend upon how the defendant responds to what might otherwise be viewed as an equivocal, or less than overwhelming, level of adverse evidence.
43 With the plaintiff having raised such evidence through the identified communications concerning allegedly false antecedents and qualifications in the CV which Ms Foley had provided, there arises at least some prima facie basis to investigate the response that would be forthcoming from Ms Foley concerning her answering such allegations.
44 In short, answering responses as regards her holding the two degrees at New York University and having a prior employment history with the New York Jets were not given by her on affidavit, as I explain below, in reviewing her materials filed in answer.
45 The last of the affidavits read and relied upon by the plaintiff was from the plaintiff's managing director, Mr Fogarty.
46 Mr Fogarty speaks of a face to face meeting he had with Ms Foley after having been given her CV from Mr Stowell.
47 In essence, Mr Fogarty says that he was highly impressed, particularly with Ms Foley's (asserted) background and qualifications. Having met her in person at a café in Cottesloe in March 2012, he says he immediately resolved to offer her a position with Peel Health Campus, on the strength of her CV. He swears at par 23 of his affidavit:
If I had known that the defendant had not genuinely held the qualifications set out in her CV and had falsely stated any aspect of her employment history I would not have offered her a position at all.
48 I accept that evidence.
49 Mr Fogarty refers to Ms Foley's subsequent engagement by the plaintiff as an executive assistant, on a contract weekly basis, on or about 23 April 2012 and then her subsequent employment on a permanent full-time basis as COO, on or about 15 May 2012.
50 Mr Fogarty has observed that Ms Foley's employment terminated on 28 September 2012.
51 Like Mr Stowell, Mr Fogarty says at par 28 that Mr Franklin was engaged to investigate Ms Foley's (asserted) qualifications. He attaches the written communication from Mr Morton to Mr Franklin of 23 January 2013, earlier referred to by Mr Stowell.
52 Mr Fogarty's affidavit concludes at par 31, to accord with and satisfying the formal requirements of RSC O 14 r 2(1), that he verily believes Ms Foley, as the defendant, has 'no defence to this action'.
53 I turn now to the materials relied upon by Ms Foley in resisting both the applications brought against her.
Ms Foley's materials
54 Ms Foley acts in person. Additionally, she is presently resident outside Western Australia in the State of Victoria. These issues have made communication with her cumbersome, in terms of a receipt of her materials. Nevertheless, I will attempt to summarise all materials received from her on these applications: see generally ts 59.
55 First is a document of 28 October 2013, somewhat confusingly entitled 'Plaintiff's [sic] outline of submissions in support of Ms Foley's own attempted application for summary judgment of counterclaim'. For present purposes, this document can effectively be ignored. The only two relevant applications I am determining for summary judgment are made by the plaintiff.
56 Next, is a written outline of submissions from Ms Foley of 25 November 2013 to which I will make further reference below.
57 Third is Ms Foley's current pleading in the action entitled 'Second Amended Defence and First Amended Counterclaim of the Defendant', bearing the date 25 November 2013 and filed at court that day.
58 Fourth are documents that look to be the affidavits by Ms Foley of 14 and 28 October 2013, but which are prepared in an irregular form. While one is apparently sworn before a police officer in Victoria on 28 October 2013, the other does not appear to be sworn at all. Other obvious irregularities in these documents as purported affidavits include that they do not specify any address for Ms Foley and they are not signed at the foot of each page.
59 In argument, counsel for the plaintiff queried whether a purported affidavit sworn before a member of the Victorian Police could be read (ts 59). In that regard, s 98(8) of the Oaths, Affidavits and Statutory Declarations Act 2005 (WA) provides:
(8) An authorised witness for an affidavit that is made at a place outside Western Australia is -
…
(d) a person who has authority under the law of that place to administer an oath to another person.
61 On 9 December 2013 Ms Foley advised my Associate by email that she could not afford to appear at the summary judgment application by video link. She also expressly declined to appear by way of a telephone link at the Court's expense (see ts 57 - 58). At my direction, Ms Foley was then supplied by post with a free copy of the transcript of the hearing in her absence on 9 December 2013 and she was afforded by me an opportunity to respond by way of further written submissions as to her position.
62 On 16 February 2014, Ms Foley filed a document at court entitled 'Response of Michelle Ashton Foley to hearing dated 9 December 2013 (as per transcript of proceedings)'. Including its cover page, this document is a six page submission plus a number of attachments.
Consideration of Ms Foley's materials
63 The first significant issue that emerges concerns whether or not Ms Foley was at any relevant time ever in a contractual relationship with Health Solutions and embracing, in that context, a contract of employment.
64 Ms Foley's second amended defence and her written submissions uniformly contend there was never a contractual relationship with Health Solutions. This emerges at many places, including pars 2.1, 2.3 and 2.4 of the second amended defence:
2.1 The Defendant was never an employee of the Peel Health Campus, nor of the Plaintiff, Health Solutions (WA) Pty Ltd;
…
2.3 The Defendant was employed as a Consultant and paid by Fopar Nominees Pty Ltd, an Australian Private Business with ABN #41 009 472 084 from 12 April 2012 to 20 April 2012.
2.4 The Defendant was employed as a Consultant and paid by Health Services International Pty Ltd, an Australian Private Business with ABN #53 162 490 048 from 23 April 2012 until September 2012.
- I also note the amended defence at pars 3.5 and 6, particularly 6.12:
The Defendant was never paid by the Peel Health Campus nor by Health Solutions (WA) Pty Ltd and all of the Defendant's consulting invoices were addressed to Health Services International (Pty) Ltd as was instructed by Jon Fogarty.
66 The explicit denial by Ms Foley of a contractual relationship with the plaintiff is no accidental slip on the part of a self-represented litigant. It is a pleaded assertion which is repeated, then put explicitly in a number of other places. I refer then to Ms Foley's written outline of submissions of 25 November 2012. She says at par 1:
The Plaintiff's Statement of Claim and related Outline of Submissions in Support of Application for Summary Judgment assume that the Defendant was an employee of the Plaintiff, which is incorrect. At no time was the Defendant employed by or paid by the Plaintiff, Health Solutions (WA) Pty Ltd or the Peel Health Campus.
- At par 8:
Therefore, the Plaintiff's claim that the Plaintiff has suffered loss, damage and unnecessary hardship related to the Defendant's failure to abide by the terms of the Employment Contract is invalid as the Defendant was never an employee of (nor paid by) the Plaintiff.
Her written submissions are to the same effect in par 10, concluding at par 14:
The Defendant concludes that as the Plaintiff's entire claim is predicated on the Defendant having been an employee of the Plaintiff and on the $112K+ amounts sought having been paid to the Defendant by the Plaintiff, which is clearly not the case, thus the Plaintiff's argument is invalid and thus the Defendant seeks summary dismissal of the Plaintiff's claim.
Jon Fogarty instructed that I would be paid as a Contractor of a subsidiary business of Health Solutions International that he was in the process of organising an ABN and ACN for. The initial compensation that we agreed upon was $150K per annum, with the understanding that the figure would be amended once the actual role was determined.
…
In order to accommodate the terms of employment outlined in Mr Fogarty's email, I established Axiom Strategic Consulting with the ATO on 10 April 2012.
68 It will be recalled that Mr Stowell's affidavit contains 'Axiom Strategic Consulting' invoices in respect of Ms Foley's consulting services across the period 4 May 2012 to 21 September 2012. I was told at the summary judgment application that 'Axiom Strategic Consulting' was an unregistered business name used by Ms Foley, and not a formally registered business name in accordance with the Business Names Act 1962 (WA) (ts 64).
69 Ms Foley's last responsive submissions of 14 February 2014, made with the benefit of the transcript of the hearing on 9 December 2013, appear to maintain the 'no contract' position. She says at page 1:
I do not dispute that I replied to this advert, but emphasize the fact that when doing so that I was of the belief that I was applying for a CFO role to be employed by Merchant Holdings Pty Ltd, not the Peel Health Campus nor Health Solutions, and in fact that the roles that I subsequently assumed were that of Board Liaison and Chief Operating Officer, not CFO.
Evaluation
70 In short, identifying from the vast materials provided whether and with whom Ms Foley entered into any contract, be it a consultancy or employment contract, presents as a complex, factually disputed mess. The colloquial expression 'dog's breakfast' would not be inapposite.
71 In the end, the alleged contractual relationship is a matter that can, on the state of the materials, only be resolved at a trial, given the level of disputation involved. This foundational issue is not appropriate for resolution at the level of a summary judgment application.
72 However, trying to clarify and bed down the true underlying contractual relationship is only one of several conceptual difficulties faced by the plaintiff on its O 14 application. It contends, of course, that Ms Foley made knowingly false representations concerning her qualifications and prior working experience within her CV, which were relied upon and effectively thereby instigated her subsequent contractual engagement. The plaintiff then seeks to set aside as void the underlying contract on the basis of deliberate misrepresentation, or misleading and deceptive conduct contrary to the Australian Consumer Law.
73 Let it be assumed for the purpose of this O 14 evaluation, I was satisfied:
(a) Ms Foley's CV was knowingly falsified by her in respect of BSc and MBA degrees at New York University, and her prior employment with the New York Jets (factual issues which are disputed and actually do need to be resolved at a trial); and
(b) that these were material representations, in the sense they were relied upon and influenced an ensuing contractual engagement of Ms Foley's services by the plaintiff, under either a consultancy or an employment relationship.
74 In my assessment, even establishing those matters would not be enough for this plaintiff to succeed at this O 14 level. It needs to go further and obtain a full rescission of the arrangements with Ms Foley. In the context of a claim for common law misrepresentation, it would be necessary to restore the parties precisely to their pre-existing relationship. Clearly, that is not now possible.
75 Ms Foley did, in fact, provide her day-to-day services at the Peel Health Campus, at least to someone, over a six-month period. She would appear even to have been promoted, to COO. She resigned at the end of September 2012. Therefore, the necessary factual substratum to order rescission at common law, by restoring all parties to their original starting positions as at April 2012, is absent. In other words, here it is simply not possible to 'mop up all the spilt milk' from whatever contractual relationship subsisted between April and September 2012, put it back in the milk bottle, and then to assume it never left the bottle.
76 Nor, in my view, is the discretionary remedy of rescission in equity open in these circumstances, even if the plaintiff could establish that Ms Foley's engagement was procured by fraud.
77 A rescission in equity would be sought on the basis of seeking to restore the parties, as nearly as possible, to their positions before any contract on the basis of any underlying contracts being held as voidable at the option of the misled party: see Seddon N, Bigwood R, Ellinghaus M, Cheshire & Fifoot: Law of Contract (10th ed, 2012) [11.5], [11.43], particularly [11.45].
78 A rescission in equity would involve the cancelling of the contract. The parties are substantially restored to their former positions, as if there had been no contractual relationship. The court's judgment declares the underlying contract to have been voided - and treated as if void from the beginning. But that outcome conceptually, is not the same in law as a contract being assessed by a court as void from the very beginning, as, for example, where an assumed contract is assessed as so uncertain that an agreement was ever perfected. The same outcome is seen where there is assessed by the court to be an operative mistake at common law.
79 The effect of an actionable contractual misrepresentation is that any underlying contract will be assessed as voidable, not void. The affected representee has the right of election to rescind, or not. If the representee does choose to exercise the right to rescind, a court may declare the underlying contract, retrospectively, to be void from the beginning, or ab initio. On the other hand, if the representee party chooses not to rescind, or the right to rescind has somehow been lost, then the contract remains on foot and is perfectly enforceable on all sides.
80 Here the question arises as to when, on an assumption Health Solutions was in a perfected contractual relationship with Ms Foley at some point, was it that Health Solutions elected to rescind, on the basis of fraudulent representations in Ms Foley's CV?
81 That key question cannot easily be answered from the amended writ of summons of 13 August 2013, or the ASOC, or for that matter in any of the three affidavits filed by the plaintiff in support of these applications. At best it might just be inferred from the amended writ and the ASOC that the plaintiff was seeking at about mid-August 2013 to then rescind the asserted earlier contractual relationship with Ms Foley. But that relationship had, in any event, effectively expired by Ms Foley's accepted resignation, some 10 or so months earlier.
82 In those circumstances there has to be a heavy question mark over whether a court can or would, in the exercise of a discretion, order a rescission in equity. This is at best a matter for trial, not for an O 14 application.
83 Clearly, there would be real practical difficulties in rendering a substantial mutual restitution of the parties' positions back before commencement of a contractual relationship - where personal services have been provided, accepted and paid for: see observations in Cheshire & Fifoot at [11.57]. This case is not a scenario of an unperformed executory contract, or of even of a contract only partly performed. Here, making the most generous of assumptions in favour of the plaintiff, there remained no continuing contractual obligations at all, post Ms Foley's departure from her position. There is no factual controversy, as I assess things, that the services Ms Foley had once been providing were then no longer being provided. The day to day provision and performance of her services as COO at the Peel Health Campus had consensually ended, in September 2012.
84 In such circumstances, it presents to me as highly doubtful whether an order for rescission in equity would be open when it is only sought months later, in August 2013 by Health Solutions.
85 To the extent that there is reliance by Health Solutions on statutory relief for alleged misleading and deceptive conduct by Ms Foley, the court's discretion to be exercised in granting that relief necessarily demands a need for a trial, where each side's facts are put before the court and finally determined, rather than summarily on an O 14 summary judgment application.
86 What if the issue of an attempted rescission were to be evaluated from a broader perspective, in terms of this plaintiff's primary claim for all the (liquidated) funds as received by Ms Foley, as the remuneration for her services provided as COO, to be repaid? Such a claim would effectively be as money had and received by her. On that claim there would, in my view, need to be shown in order for Health Solutions to recover all remuneration paid for Ms Foley's services - something akin to a total failure of consideration, as regards Health Solutions. As to such a cause of action see Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 88 ALJR 552[74] - [76] (Hayne, Crennan, Keifel, Bell & Keane JJ) (AFSL).
87 As regards the conceptual nature of a claim for money had and received as recently considered by the High Court in AFSL, I note this statement in the plurality judgment:
Lipkin Gorman also proceeded upon the basis that English law had accepted unjust enrichment as a legal principle to be applied as a ground for liability. By reference to what was said by Lord Goff in that case respecting the defence of change of position, it would appear that the principle of unjust enrichment may have been intended to operate more widely than the action for money had and received, which requires the presence of vitiating factors such as mistake. In David Securities, the submission that unjust enrichment was a definitive legal principle was rejected. That position has since been maintained consistently by this Court. In Friend v Brooker, it was said that the concept of unjust enrichment was not a principle supplying a sufficient premise for direct application in a particular case. In Farah Constructions Pty Ltd v Say-Dee Pty Ltd, it was commented that there was potential for unjust enrichment as a principle to distort equitable doctrine and to generate new fictions [73]. (citations omitted)
88 It is clear then that in Australia unjust enrichment is not a ground for liability of 'direct application'. As the Chief Justice stated at the outset of AFSL, the rule of direct application is simply:
[w]hen money is paid under a mistake of fact, the person paying the money may recover it from the recipient in a common law action for money had and received [1].
89 The AFSL decision was recently canvassed by Edelman J in Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd [No 3] [2014] WASC 162, see particularly [45] - [50].
90 At this point I draw a core distinction as between the nature of a restitutionary claim effectively for a return of all monies paid over as remuneration to an employee for services received, under a consultancy or employment scenario, by way of contrast to the conceptually far different claim by Health Solutions for unliquidated damages for breach of contract. The distinction is fundamental. Here the plaintiff's primary action seeks the return of $132,707.51 (see pars 15 and 73 of the ASOC for relief). For those funds to be reclaimed from her in 2013, as funds held without any entitlement by Ms Foley, there first needs to be an order for rescission. This, in my view, is not a Rowland v Divall [1923] 2 KB 500 scenario, where the character of a benefit received by Health Solutions (use of a vehicle for a four-month period, albeit unknown to the user/beneficiary a stolen car) is, in truth, totally different in character to the fundamental benefit thought to be received (good title in a car itself).
91 Here the personal services sought from Ms Foley by Health Solutions were provided by her and accepted to the benefit of Health Solutions. The personal services received by Health Solutions were of the character as had been expected, even if their provider's CV may have been 'padded' to get her job.
92 I also distinguish as conceptually distinct a claim for common law damages under the tort of deceit, on the basis of what is assessed to be a fraudulent representation: see Cheshire & Fifoot at [11.6].
93 It is easy to envisage circumstances in which a person hired under an employment contract might misrepresent the level of their qualifications, then later, through incompetence, or ineptitude or the revealed lack of a represented qualification or experience under their 'padded' CV, that such a situation may cause some outcome of loss or damage to the employer. But that damages outcome is far from the present situation with Ms Foley. By all accounts, she was a satisfactory employee during her tenure, indeed was promoted.
94 I express my prima facie view that where personal services which are contracted for have actually been provided and received without grievance, common law damages for the tort of deceit will not permit the damages to be quantified on the basis of complete recoupment of the remuneration paid over to the employee or contractor.
95 The plaintiff's particulars of loss and damage, as identified under pars 14, 15 and 20 of the ASOC in the amount of $132,707.51 represent the funds paid to the defendant as all her remuneration whilst engaged. That amount does not present to me as conceptually justifiable or recoverable as damages. The plaintiff's case for a summary judgment to 'claw back' all remuneration ever paid out to Ms Foley is not so clear or straightforward that it can sustain an O 14 application. Rather, the pursuit of such a claim seems to me to carry considerable conceptual difficulties. Applying a touchstone of unjust enrichment, the employer still holds the benefit of the received personal services and would be unjustly enriched if from there it, in effect, by a recoupment, got the services for nothing.
96 Nor from the plaintiff's materials is there anything that I can assess as supporting an order for summary judgment in respect of an award of unliquidated damages to be assessed, as alternatively asked for by Health Solutions. Any damages of that ilk would seem to bear a wholly different basis of assessment, unrelated to a summation of the aggregate funds paid over time to Ms Foley as her remuneration, even assuming the plaintiff could establish its knowingly false representations, as alleged.
97 That leaves the plaintiff's O 16 attack against the defendant's counterclaim, which I can now address.
The defendant's counterclaim
98 Before embarking upon an assessment of the O 16 application brought by Health Solutions against Ms Foley's counterclaim, it is necessary to note that the pleaded counterclaim as contended for under Ms Foley's first amended counterclaim of 25 November 2013, presents as incompatible with a key foundational premise of her defence. I have already set out passages from Ms Foley's defence and from her written submissions - where she contends that there was no employment or consultancy agreement whatsoever - as between herself and Health Solutions. Yet the whole character of her counterclaim seeks what are inherently contractual benefits, including superannuation entitlements, payment in lieu of annual leave or personal days, and payment in lieu of notice of dismissal. She also seeks damages for bullying, harassment, and intimidation in breach of implied terms. This presents as wholly inconsistent with the defence and, thus, conceptually flawed.
99 This grating conceptual inconsistency is not a matter of a disadvantaged litigant in person being simply confused over the need to raise a pursuit of such matters on the basis of a plea made in the alternative. What squarely emerges under Ms Foley's counterclaim is a premise of her contractual employment by Health Solutions which, given all that has gone on before it to the contrary, is untenable.
100 It is inconsistent and, in my view, an abuse of the processes of this Court, for Ms Foley to proceed by a counterclaim in such a fundamentally inconsistent way whilst, at the same time, robustly refuting Health Solutions' claim on the basis that there was no contractual relationship. The dramatic inconsistency as between claiming entitlements under a contract, whilst contemporaneously denying such a contract's very existence, is stark and ultimately, untenable.
101 I will address the O 16 application of Health Solutions, although it was advanced in rather scant terms.
102 The preferable course, bearing in mind what I assess as a flagrant and irreconcilable inconsistency of position as seen under the counterclaim, is to strike out the counterclaim. Ms Foley's counterclaim is an abuse of process, by RSC O 20 r 19(1)(d) and, as well, by the inherent jurisdiction of the court to address abuses of its processes: see generally PNJ v The Queen [2009] HCA 6; (2009) 83 ALJR 384.
103 I will strike out her counterclaim on the basis that if at some future point Ms Foley can ever identify an entity other than Health Solutions (WA) Pty Ltd which she contends was her employer or her contracting principal, she is allowed to pursue that entity for the subject grievances she had raised here, most likely in the Magistrates Court, District Court, or possibly the WA Industrial Relations Commission. But what Ms Foley has contended for in this court by her counterclaim simply cannot be allowed to stand alongside the current defence in her document of 25 November 2013.
104 In those terminal circumstances for her counterclaim, it is unnecessary to determine the residual RSC O 16 application.
105 I would dismiss Ms Foley's counterclaim as an abuse of the process.
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