Kearns v Access Elevators Australia Pty Ltd
[2017] FCCA 689
•7 April 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KEARNS v ACCESS ELEVATORS AUSTRALIA PTY LTD & ORS | [2017] FCCA 689 |
| Catchwords: PRACTICE AND PROCEDURE – Application for leave to amend claim concerning title to a vehicle – whether proposed claim is one that falls within the accrued jurisdiction of the Court – whether as a matter of discretion leave to amend should be granted – leave granted subject to terms that the applicant pay the respondents’ costs thrown away because of the amendment. |
| Legislation: Federal Circuit Court Rules 2001 (Cth), r.7.01(1) |
| Cases cited: Amponsem v Laundy (Exhibition) Pty Ltd (No.2) [2016] FCCA 91 Re Wakim; Ex parte McNally[1999] HCA 27; (1999) 198 CLR 511 |
| Applicant: | GARRY JOHN KEARNS |
| First Respondent: | ACCESS ELEVATORS AUSTRALIA PTY LTD |
| Second Respondent: | WARREN HANSON |
| Third Respondent: | ANTON OKORN |
| Fourth Respondent: | ROBERT PIRONA |
| File Number: | SYG 1597 of 2016 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 29 March 2017 |
| Delivered at: | Sydney |
| Delivered on: | 7 April 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr K G Bennett |
| Solicitors for the Applicant: | JP Miskell & Associates |
| Counsel for the Respondents: | Mr R Moore |
| Solicitors for the Respondents: | Clyde & Co |
ORDERS
Subject to orders 3 and 4, the applicant have leave to file an amended claim in the form or substantially in the form of the draft claim which is annexure “JM2” to the affidavit of John Patrick Miskell sworn on 28 February 2017.
By 10 April 2017 the applicant file and serve the amended claim referred to in order 1.
The applicant pay the respondents’ costs, if any, thrown away because of the granting of the leave referred to in order 1, such costs to include costs the first respondent may have incurred in Local Court of New South Wales case number 2016/00200151 that are exclusively referable to the first respondent’s claim for relief in relation to the goods described in paragraphs 1(a) and 1(aa) of the statement of claim filed in that proceeding (Local Court Costs).
To the extent any of the costs thrown away because of order 1 include Local Court Costs, such costs are to be assessed in the manner they would have been assessed in the Local Court of New South Wales.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1597 of 2016
| GARRY JOHN KEARNS |
Applicant
And
| ACCESS ELEVATORS AUSTRALIA PTY LTD |
First Respondent
| WARREN HANSON |
Second Respondent
| ANTON OKORN |
Third Respondent
| ROBERT PIRONA |
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
The applicant, Mr Kearns, applies for leave to amend his claim.
In that claim Mr Kearns alleges the first respondent (Access Elevators) took adverse action by dismissing him from his employment because Mr Kearns had, or exercised, or proposed to exercise, certain workplace rights. Mr Kearns consequently alleges Access Elevators contravened s.340, s.346, s.351, and s.352 of the Fair Work Act 2009 (Cth) (FW Act), and that the second, third, and fourth respondents were involved in those contraventions. In addition, Mr Kearns alleges Access Elevators failed to pay to Mr Kearns amounts due to him under the Long Service Leave Act 1955 (NSW) (LSL Act), and also contravened s.117 of the FW Act because Access Elevators dismissed Mr Kearns from his employment without giving him the notice required by that section.
Mr Kearns seeks leave to amend his claim in three ways. First, he proposes to make minor amendments to the claim based on the LSL Act. Second, he wishes to introduce a new cause of action in which Mr Kearns proposes to allege Access Elevators terminated his contract of employment without giving him the reasonable notice which, under the terms of his contract, he was entitled to receive. Third, Mr Kearns wishes to add a cause of action based on an agreement he alleges he entered into with Access Elevators under which Mr Kearns alleges he became entitled to the ownership of a Toyota Hilux Workmate Ute (Vehicle). That includes a claim that Mr Kearns holds an equitable interest in the Vehicle.
The respondents do not object to Mr Kearns being granted leave to make the first two of the three proposed amendments. They do object, however, to his being permitted to make the third amendment. They object because the ownership of the Vehicle is the subject of proceedings Access Elevators commenced against Mr Kearns in the Local Court of New South Wales, and they submit this Court does not have jurisdiction to determine that question. The respondents also object because they submit Mr Kearns elected not to include in his claim the claim concerning ownership of the Vehicle which he now seeks leave to include in his claim.
To be in a position to assess Mr Kearns’ application to amend, it will be necessary to set out the allegations made in the proceeding before me and in the Local Court.
Background
Mr Kearns commenced proceedings in this Court on 23 June 2016. In the schedule to the claim that accompanied his application, Mr Kearns makes allegations including the following allegations:
a)Mr Kearns commenced his employment with Access Elevators on 7 July 1994.
b)As a consequence of s.96 of the FW Act, Mr Kearns had a substantial entitlement to personal leave.
c)From 4 January 2016 to 10 March 2016 Mr Kearns suffered from a stress-related workplace injury for which he was entitled to be paid personal leave and to make a workers compensation claim.
d)On 10 March 2016 Mr Kearns made a claim for workers compensation and injury management.
e)Further, Mr Kearns was an officer and member of the Lift Engineering Society of Australia Inc (LESA), and in that capacity organised and coordinated a Christmas party for LESA members.
f)By letter dated 14 March 2016, the solicitors for Access Elevators stated Mr Kearns’ services as managing director were removed on 4 February 2016, and that his employment was at an end.
g)The letter referred to in (f) was not a valid notice of termination pursuant to s.117 of the FW Act.
h)Access Elevators took the action referred to in (f) for reasons that included Mr Kearns’ having, or exercising, one or more workplace rights, these being the right to personal leave, the right to make a claim for workers compensation and injury management, the right to be given the notice required by s.117 of the FW Act, and the right to be a member of an industrial organisation.
i)Because of the matters alleged in (h), Access Elevators contravened s.340, s.346, s.351, and s.352 of the FW Act.
In their response filed on 15 July 2016, the respondents say as follows:
a)Although they admit Mr Kearns was and is a shareholder of Access Elevators, the respondents do not accept Mr Kearns was an employee of Access Elevators.[1]
b)On 4 February 2016 the board of directors of Access Elevators and of an associated entity, Lift Fix Pty Limited, removed Mr Kearns from the position of managing director of Access Elevators.[2]
c)On 17 February 2016 Mr Kearns submitted to Access Elevators a medical certificate to the effect that Mr Kearns was unfit for work.[3]
d)On 24 February 2016 Mr Kearns was removed from the office of director of Access Elevators.[4]
e)The reason for Mr Kearns’ removal as managing director and director arose directly from Mr Kearns’ “alleged misconduct concerning improper use of the funds” of Access Elevators “and other misconduct in the performance of the position of Managing Director and as a director and possibly employee”.[5]
f)By letter dated 14 March 2016, after Access Elevators had received a “WorkCover NSW – Certificate of Capacity” indicating Mr Kearns had “no current work capacity for any employment from 16/02/2016 to 07/04/2016”, and that the “[p]atient stated date of injury” was “04/01/2016”,[6] the solicitors for Access Elevators informed the solicitor for Mr Kearns that “whatever the relationship had been and if an employment relationship had existed post 4 February 2016 it was now “regarded by the company as at an end””.[7]
g)By letter dated 18 March 2016 the solicitors for Access Elevators requested Mr Kearns return property of Access Elevators that had remained in his possession.[8]
[1] Schedule to Response, [29]
[2] Schedule to Response, [3]
[3] Schedule to Response, [6]
[4] Schedule to Response, [7]
[5] Schedule to Response, [8]
[6] Schedule to Response, [14], [15]
[7] Schedule to Response, [17]
[8] Schedule to Response, [20]
In the meantime, on 1 July 2016 Access Elevators commenced proceedings in the Local Court of New South Wales against Mr Kearns in which it claims an order that Mr Kearns deliver goods to Access Elevators (Local Court proceeding).[9] The goods to which this claim relates includes the Vehicle. In its statement of claim, Access Elevators claims it is the owner of the goods, that until 17 March 2016 Access Elevators entrusted Mr Kearns with possession of the goods, and that on 17 March 2016 Access Elevators demanded Mr Kearns return the goods, but Mr Kearns refused to deliver them.[10]
[9] Affidavit of J P Miskell, 1.03.2017; annexure JM3 (Statement of Claim)
[10] Statement of Claim, [2]-[3]
On 9 August 2016 Mr Kearns filed a defence in the Local Court proceeding.[11] In his defence, Mr Kearns alleges:
a)Mr Kearns entered into an agreement with Access Elevators under which, in consideration of Mr Kearns contributing $30,000 to the purchase price of the Vehicle,[12] Access Elevators would purchase the Vehicle for Mr Kearns’ sole and exclusive use.[13]
b)In further consideration of Mr Kearns’ contributing $30,000 to the purchase of the Vehicle, Access Elevators agreed Mr Kearns would retain possession of the Vehicle until the first of three events to occur, one of which was the cessation of Mr Kearns’ employment with Access Elevators.[14]
c)It was further agreed that the consideration of $30,000 would be met by Mr Kearns foregoing interest of $13,223.60 and $16,800 Access Elevators owed to Mr Kearns that arose from loans Mr Kearns made to Access Elevators; and that, in addition to the $30,000 Mr Kearns would reduce interest payable to him from 9% to 4.5%.[15]
[11] Affidavit of J P Miskell, 1.03.2017; annexure JM4 (Local Court Defence)
[12] Which Mr Kearns refers to as including the “1300w Inverter” referred to in paragraph 1(aa) of the Statement of Claim filed in the Local Court proceeding.
[13] Local Court Defence, [5(i)]
[14] Local Court Defence, [5(ii)(A)]
[15] Local Court Defence, [5(iv)]
On the basis of the agreement he alleges he made with Access Elevators about the Vehicle, Mr Kearns also alleges in the Local Court proceeding that he holds an equitable interest in the Vehicle.[16]
[16] Local Court Defence, [8]
Parties’ submissions
Mr Kearns submits the issues arising in the Local Court proceeding (Vehicle Claims) and the issues that arise on the claim Mr Kearns makes in the proceeding before this Court (FW Claims) form part of the one justiciable controversy and, for that reason, form part of the “matter” that is currently before this Court. The one justiciable controversy of which Mr Kearns submits the Vehicle Claims and FW Claims form part is the rights and liabilities of the employment relationship Mr Kearns alleges existed between him and Access Elevators and which he claims Access Elevators unlawfully terminated. Mr Kearns also submits the FW Claims and the Vehicle Claims share common issues and, therefore, to permit Mr Kearns to raise the Vehicle Claims in this proceeding would avoid the duplication of costs and the potential for inconsistent findings.
The respondents, on the other hand, submit the FW Claims and the Vehicle Claims do not form part of the one justiciable controversy. They submit the Vehicle Claims are distinct and unrelated to the FW Claims. The respondents submit the Vehicle Claims concern alleged loan arrangements Mr Kearns entered into with Access Elevators in his capacity as director of Access Elevators. The respondents also submit Mr Kearns has failed to explain why he did not initially include the Vehicle Claims in the proceeding he commenced in this Court.
One “matter”?
This Court does not have jurisdiction to determine a claim concerning title to goods unless such claim forms part of a single “matter” that includes claims over which the Court does have jurisdiction. The circumstances in which two or more claims are to be taken to form part of a single “matter” were identified by Gummow and Hayne JJ in Re Wakim; Ex parte McNally:[17]
There is but a single matter if different claims arise out of “common transactions and facts” or “a common substratum of facts”, notwithstanding that the facts upon which the claims depend “do not wholly coincide”. So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are “completely disparate”, “completely separate and distinct” or “distinct and unrelated” are not part of the same matter.
Often, the conclusion that, if proceedings were tried in different courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.
[17] [1999] HCA 27; (1999) 198 CLR 511 at [140], [141] (Gleeson CJ and Gaudron J agreeing ([25] and [26]) (footnotes omitted))
It is true there are issues that arise on the FW Claims that do not arise on the Vehicle Claims; but the issues are not completely separate and distinct. Mr Kearns’ claim to title to the Vehicle turns on a number of essential matters. One is Mr Kearns’ employment with Access Elevators being terminated. An essential issue that must be determined as part of the determination of the Vehicle Claims, therefore, is whether Mr Kearns was employed by Access Elevators. That is an essential issue that arises on the FW Claims. It follows, therefore, that unless the FW Claims and the Vehicle Claims are heard in the one proceeding, there is the potential of two courts making inconsistent findings on one of the essential issues in each proceeding.
For these reasons, I am satisfied the FW Claims and the Vehicle Claims form part of the one matter and this Court, therefore, has jurisdiction to entertain the Vehicle Claims.
Discretionary matters
That the Vehicle Claims and the FW Claims form part of the one matter does not necessarily mean Mr Kearns is entitled to be granted leave to amend his claim to introduce the Vehicle Claims in this proceeding. Under r.7.01(1) of the Federal Circuit Court Rules 2001 (Cth), the Court has power to “allow or direct a party to amend a document . . . in the way and on the conditions the Court . . . thinks fit”; but the exercise of that power is within the discretion of the Court. In the case of applications to amend pleadings, the discretion is exercised according to the following principle:[18]
[L]eave to amend should be granted unless the proposed amendment is obviously futile or would cause substantial prejudice or injustice which could not be compensated for. These considerations require the Court to take account of the nature of the proposed amendment, whether it is made in good faith, the stage in the proceedings at which leave is sought, the nature of the prejudice that may be caused and the means by which such prejudice might be redressed. The question of delay is relevant to these considerations however it is not the purpose of the Court to punish a party for delay in seeking an amendment.
[18] Medich v Bentley-Smythe Pty Ltd [2010] FCA 494 at [8] (Stone J)
Mr Kearns’ proposed amendment to include the Vehicle Claims is not obviously futile, and there is nothing to suggest Mr Kearns makes it in bad faith. To allow the proposed amendment, however, may cause some prejudice to Access Elevators. In his application to the Fair Work Commission which he lodged on 31 March 2016, Mr Kearns stated he sought a “[d]eclaration that the Applicant’s work vehicle is the property of the Applicant and the provision of any consequent transfer papers”.[19] It is possible that, had Mr Kearns included the Vehicle Claims in the claim he filed in this proceeding, Access Elevators may not have included in the Local Court proceeding the claim it there makes in relation to the Vehicle. Thus, it is possible that Access Elevators may have incurred costs that are exclusively associated with its having included the Vehicle in the Local Court proceeding.
[19] Affidavit of S E Weeks, 16.03.2017, [11]; annexure “SW-4” at page 76
Given the number and nature of the goods that Access Elevators has included in its claims in the Local Court proceeding, I find it is unlikely Access Elevators would not have commenced the Local Court proceeding had Mr Kearns included the Vehicle Claims in the claim he filed in this proceeding. Thus, any costs Access Elevators incurred in the Local Court proceeding that will be thrown away if I grant Mr Kearns leave to include the Vehicle Claims in the proceeding in this Court will be costs that are exclusively associated with Access Elevators including the Vehicle in the claims it makes in the Local Court proceeding. These costs, to the extent they are capable of being identified, are likely to be minimal. Nevertheless, if I were otherwise satisfied that Mr Kearns should be granted leave to amend his claim by including the Vehicle Claims, it would be appropriate to grant that leave on terms that he pay Access Elevators’ costs thrown away because of the amendment.
The respondents also submit I should not grant Mr Kearns leave to amend his claim by introducing the Vehicle Claims because, having regard to my decision in Amponsem v Laundy (Exhibition) Pty Ltd (No.2),[20] Access Elevators’ ability to recover costs will be limited by s.570 of the FW Act and, for this reason, it will suffer prejudice. Whether or not Access Elevators will suffer this prejudice, however, depends on whether it will succeed on the Vehicle Claims. If it does not succeed, Access Elevators will benefit from Mr Kearns’ ability to recover costs also being limited by s.570 of the FW Act. The evidence does not permit me to make any reasoned assessment of the likelihood of Access Elevators succeeding on the Vehicle Claims. It is, therefore, not possible to assess whether Access Elevators will suffer prejudice because the costs of the Vehicle Claims will be regulated by s.570 of the FW Act.
[20] [2016] FCCA 91
Also relevant when considering whether Access Elevators will suffer prejudice because the costs of the Vehicle Claim will be regulated by s.570 of the FW Act is whether Access Elevators will save costs if the amendment is made. In my opinion, Access Elevators and Mr Kearns will avoid the costs of litigating twice the question of whether Mr Kearns was an employee of Access Elevators.
Disposition
I propose, therefore, to order that Mr Kearns be granted leave to amend his claim by including the Vehicle Claims. I propose to grant leave on terms that Mr Kearns pay the respondents’ costs, if any, that will be thrown away because of the amendment. To the extent these include the costs Access Elevators incurred exclusively in connection with its having included the Vehicle in the claims it makes in the Local Court proceeding, such costs are to be assessed in the manner they would have been assessed had the Vehicle Claims remained in the Local Court.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Date: 7 April 2017
0
4
4