Kowalski v Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd

[2002] FCA 1153

FEDERAL COURT OF AUSTRALIA

Kowalski v Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd [2002] FCA 1153

Federal Court of Australia Act 1976 (Cth), s 19
Industrial Relations Act 1988 (Cth), s 170EA
Workplace Relations Act 1996 (Cth), ss 170CE(1), 298K(1)(a), (b) and (c), 298L(2)(h), (l), (j) and (k), 298L(2)(a), (b) and (c), 298U(b)(c) and (d), 298T, 412
Industrial Relations Reform Act 1994 (Cth)
Workplace Relations and Other Legislation Amendment Act 1996 (Cth), Sch 7, item 17(1)
Superannuation (Resolution of Complaints) Act 1993 (Cth)
Federal Court Rules, O 20 r 2(1)
Workers Rehabilitation and Compensation Act 1986 (SA)

Kowalski v Mitsubishi Motors Australia Limited (1998) 88 FCR 55 - discussed
Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 – referred to
Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 – referred to
United States Surgical Corp v Hospital Products International Pty Ltd (1981) 148 CLR 457 – referred to
Fencott v Muller (1983) 152 CLR 570 – referred to
Re Wakim; Ex parte McNally (1999) 198 CLR 511 – referred to
Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572 - discussed
Dey v Victorian Railways Commissioners (1949) 78 CLR 62 – referred to
Walton v Gardiner (1993) 177 CLR 378 – referred to
Blair v Curran (1939) 62 CLR 464 – referred to
Jackson v Goldsmith (1950) 81 CLR 446 – referred to
Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290 – referred to
Theo v Official Trustee in Bankruptcy (1996) 70 FCR 317 – referred to
Administration of the Territory of Papua and New Guinea v Guba (1973) 130 CLR 353 – referred to
Ex parte Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SR (NSW) 13 – referred to
Miller v University of New South Wales [2002] FCA 882 – referred to
Craine v Colonial Mutual Fire Insurance Co. Ltd (1920) 28 CLR 305 – referred to
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 – referred to
Thompson v Palmer (1933) 49 CLR 507 – referred to
Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 – referred to
Kowalski v Mitsubishi Motors Australia Ltd [2001] SA WCT 93 – discussed
Burney v Burney [1956] SASR 171 – referred to
Scott v Avery [1856] 5 HL Cas 811 – distinguished
Finch v Sayers [1976] 2 NSWLR 540 - distinguished
Development Assessment Commission v Macag Holdings Pty Ltd (2001) 80 SASR 104 – referred to

KAZIMIR KOWALSKI v MITSUBISHI MOTORS AUSTRALIA LTD STAFF SUPERANNUATION FUND PTY LTD AND MITSUBISHI MOTORS AUSTRALIA LTD

S.190 of 2001

MANSFIELD J
17 SEPTEMBER 2002
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S.190 OF 2001

BETWEEN:

KAZIMIR KOWALSKI
APPLICANT

AND:

MITSUBISHI MOTORS AUSTRALIA LTD STAFF SUPERANNUATION FUND PTY LTD
FIRST RESPONDENT

MITSUBISHI MOTORS AUSTRALIA LTD
SECOND RESPONDENT

JUDGE:

MANSFIELD J

DATE OF ORDER:

17 SEPTEMBER 2002

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.The Application of Kazimir Kowalski against Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd and Mitsubishi Motors Australia Ltd be dismissed.

2.Kazimir Kowalski pay to the Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd and Mitsubishi Motors Australia Ltd costs of the Application.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S.190 OF 2001

BETWEEN:

KAZIMIR KOWALSKI
APPLICANT

AND:

MITSUBISHI MOTORS AUSTRALIA LTD STAFF SUPERANNUATION FUND PTY LTD
FIRST RESPONDENT

MITSUBISHI MOTORS AUSTRALIA LTD
SECOND RESPONDENT

JUDGE:	MANSFIELD J
DATE:	17 SEPTEMBER 2002
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1. Before the Court are motions of each respondent for an order that the applicant’s claim be dismissed under O 20 r 2 of the Federal Court Rules on the grounds that the Application discloses no reasonable cause of action against either respondent, or that it is frivolous or vexatious as it has no chance of success, or that it is an abuse of the process of the Court.  The first respondent (the Superannuation Trustee) also claims that the applicant’s claim should be dismissed because the Court has no jurisdiction to hear it.  The Superannuation Trustee administers the Mitsubishi Motors Australia Ltd Staff Superannuation Fund (the Fund) in accordance with its Trust Deed and its Rules (the Trust Deed and Rules).

   BACKGROUND

2. The principal Application is now expressed in the amended Application dated 9 January 2002 (the Application).  Subsequent to the hearing of the two motions, on 11 February 2002 the applicant purported to file and serve yet a further amended Application.  He did not have leave to do so.  In any event, I do not consider that the purported further amended Application advances the applicant’s position in the determination of the two motions currently before the Court.

3. The Application seeks orders against the Superannuation Trustee and the second respondent (the Employer) for compensation and punitive damages arising out of the Employer’s termination of the applicant’s employment.  The timing and reasons for the cessation of that employment relationship are issues disputed between the applicant and respondents.

4. The Application claims to be made:

   “… pursuant to clause A.19 and Section C of the Mitsubishi Motors Australia Staff Superannuation Fund Trust Deed and Rules and s 298K(1)(a), (b) and (c), s 298L(1)(h), (i), (j), (k) and s 298L(2)(a), (b) and (c) and s 298U(b), (c) and (d) of the Workplace Relations Act 1996 as amended under Part IV of the Federal Courts Act 1976 and the Courts accrued jurisdiction”.

5. The primary claim of the applicant is then expressed as follows:

   “…the applicant’s contract of employment was not frustrated on 16 March 1994 by operation of law before he was constructively dismissed on 27 October 1998, therefore, the Court must order the respondents to make a payment to the applicant for the purpose of restoring the applicant to the same position that he would have been in if the first and the second respondents had complied with the terms and conditions of the Mitsubishi Motors Australia Limited (Supervisory and Technical Employees) Award 1987, the Mitsubishi Motors Australia Limited (Enterprise Agreement) 1993 [Print K9656] which was ratified by the AIRC on 27 January 1994 and the Mitsubishi Motors Australia Staff Superannuation Fund Trust Deed and Rules during the period from 16 March 1994 up to an including 27 October 1998”

6. In effect, the applicant wants his entitlements to be determined as at 27 October 1998, when he says he was constructively dismissed, rather than as at 16 March 1994.

7. The affidavit accompanying the Application asserts the applicant’s employment was not terminated on 16 March 1994 because he was, at the time, still entitled to 189.25 hours sick leave.  He says his contract of employment could not have been “frustrated” until his sick leave entitlement was exhausted.  He annexed some correspondence to his affidavit.  One letter from the Department of Industrial Relations dated 19 February 1997 contains conclusions by an officer of that department that the applicant then had an outstanding entitlement of 1.4 weeks of long service leave, which the Employer had agreed to pay, and 189.25 hours accrued sick leave.  The officer pointed out that, on termination of employment, no entitlement to a lump sum payment for accrued sick leave hours arose.

8. The claim that the applicant’s employment with the Employer was not terminated on 16 March 1994 because he had unused accrued sick leave at the time is repeated, with references to many other documents, in a further affidavit of the applicant sworn on 9 January 2002.  I have also considered the applicant’s two further affidavits sworn on 9 January 2002 responding, partly by way of argument, to the affidavits filed in support of the two motions now before the Court.

9. The picture which, with some difficulty, emerges is as follows:  the applicant claims “all of his legally entitled benefits up to and including the date that he was constructively dismissed” on 27 October 1998.

10. As against the Superannuation Trustee, the claim includes a claim for punitive damages for the loss of the applicant’s entitlement to superannuation benefits “for a period of 14 years from the date that he was constructively dismissed on 27 October [1998] to the age of 65,” and punitive damages for the loss of a Total and Permanent Disability Benefit (TPDB) to which he claims he was legally entitled by reason of his suffering a heart attack on 26 December 1997 and by reason of a depressive illness which developed in January 1998, and compensation for pain and suffering.  He asserts having made a claim for TPDB under under the Trust Deed and Rules on 26 October 1998, as well as for punitive damages for past economic loss and loss of superannuation benefits from 16 August 1991 to 27 October 1998.  His affidavit in support of the Application includes reference to a letter from the Superannuation Trustee dated 20 August 2001 pointing out that the applicant did not claim total and permanent disablement in respect of the condition that actually caused him to cease work on 19 August 1991, and his claim made in 1998 was in respect of disablement following a heart condition in December 1997 that arose after his employment had ceased, so that he was at that time no longer a member of the Fund nor entitled to benefits under it in respect of that condition.

11. Against the Employer, the applicant claims compensation for pain and suffering, punitive damages for past economic loss and loss of superannuation benefits from 16 August 1991 to 27 October 1998, and punitive damages for future economic loss and loss of future superannuation benefits calculated from the date of his ‘constructive dismissal’ to his reaching the age of 65.

12. It is not immediately apparent why the damages sought are punitive and not compensatory.  The expression may represent a misconception by the applicant.  That issue, however, is not relevant to the present motions.

    BACKGROUND

13. The applicant began employment with the Employer on 16 January 1964.  He last physically attended work on 16 June 1991.  On 16 March 1994 the Employer notified the applicant in writing that it considered his employment contract frustrated.  The notice was in the following terms:

    “As you continue to be unfit for your normal duties with us, your contract of employment with the company is frustrated.  On that ground, your contract of employment with the company is now at an end, and accordingly you are no longer required to report for work.”

14. On 6 April 1994 the applicant’s union gave notice to the Australian Industrial Relations Commission (the AIRC) of an industrial dispute concerning the alleged termination of the applicant’s employment contract.  The dispute was the subject of a number of hearings before a Commissioner of the AIRC but does not appear to have been concluded by any formal order.  The applicant has not complied with a direction given on 4  December 1997 that he provide a “cogent reason for the continuation” of the proceedings by 30 January 1998.

15. On 18 December 1997 the applicant lodged an application in this Court for an extension of time in which to institute proceedings against the Employer for unfair dismissal purportedly pursuant to s 170EA of the Industrial Relations Act 1988 (Cth) as then in force. In that application he alleged that his employment with the Employer was terminated on 16 March 1994. His application was dismissed on 16 October 1998 because the Court had no jurisdiction to entertain the application, as s 170EA of the Industrial Relations Act had no operation on the date the application was filed: see Kowalski v Mitsubishi Motors Australia Limited (1998) 88 FCR 55.

16. Then, on 16 October 1998, the applicant instituted further proceedings in the AIRC against the Employer pursuant to s 170CE(1) of the Workplace Relations Act 1996 (Cth) (the WR Act) for restitution and compensation in respect of the termination of his employment on the grounds that the termination was harsh, unjust or unreasonable, was motivated by discrimination, and that he had not been given written notice of the termination. On that application, he again stated the date on which the termination of his employment took effect was in March 1994. Soon after the institution of those proceedings, the applicant and Employer participated in a private mediation, resulting in the settlement of the dispute. The mediation agreement was dated 26 October 1998, one day before the applicant now claims his employment was terminated. One topic of the mediation was any entitlement the applicant had as a result of the termination of his employment with the Employer including “superannuation, sickness benefits or otherwise”. The mediation agreement, as noted, clearly refers to a past termination of employment.

17. The terms of the settlement were recorded in a signed document dated 27 October 1998 entitled ‘Heads of Agreement’ to which the applicant and the Employer were parties (the Heads of Agreement).  It is partly by reason of that mediation and the Heads of Agreement that the Employer now seeks to have the Application dismissed.

18. The Heads of Agreement records the applicant and the Employer having agreed to resolution “of all issues both current and future in dispute between them”.  It relevantly provides:

    1.Kowalski on behalf of himself and his dependants hereby agrees to accept the sum of $200,000 in full and final settlement of any entitlements he may have to superannuation, sick leave, compensation and damages arising out of or in the course of his employment with MMAL.  In particular, the said sum to be paid with a denial of liability, includes payment in full and final settlement of:

    1.1Any injuries or disabilities in respect of an eye injury in December 1986, a middle finger injury in May 1988, a back and or left leg injury in May 1989, stress or mental breakdown in August 1991 and a heart attack in December 1997

    1.2Any outstanding sick leave

    1.3Any matters related to the termination of his employment with MMAL

    1.4Any superannuation payable by the MMAL Staff Superannuation Fund.

    2.The said sum of $200,000 is to be paid to Kowalski as follows:

    2.1The sum of $64,691.43 to be paid from the Superannuation Fund by way of an ill health benefit being the entitlement with respect to the period from 7 March 1970 to the date of cessation of his employment

    2.2The sum of $125,308.57 to be paid by MMAL as an ex gratia payment as compensation for permanent disability impairing his future earning capacity arising from the injuries and disabilities mentioned above

    2.3The sum of $10,000 to be paid by MMAL in consideration of Kowalski forgoing any claims or future claims in any way arising from his employment.

    3.In consideration of the matters set out in paragraphs 1 and 2 above, Kowalski and his dependants agree:

    4.1Not to constitute any legal proceedings and or legal complaints with Any Court, Tribunal or body in respect of the matters set out in paragraph 1 hereof nor to join MMAL as a defendant in the Action against R J Cole & Partners and, Dowd.”

    Clauses 4.2 – 4.5 refer to other action agreed to be taken by the applicant.  Clause 5 deals with the means by which the payment of monies payable under the Heads of Agreement were to be made.  They were duly made on 9 November 1998, including the sum payable by the Superannuation Trustee under cl 2.1 of the Heads of Agreement.

19. On 23 November 1999, the applicant commenced further proceedings against the Employer in the AIRC apparently again under s 170CE of the WR Act, seeking an extension of time to do so. The grounds on which the extension of time was sought included that the Heads of Agreement were not entered into in good faith by the Employer. On 20 November 2001 the AIRC dismissed the application. The Commissioner concluded the Heads of Agreement bound the applicant not to bring the proceedings, that there was no evidence to support the assertion that the Heads of Agreement was not negotiated in good faith, and that the employment relationship between the applicant and the Employer ended on 16 March 1994 and not by any constructive dismissal on 27 October 1998. An appeal from that decision was dismissed by the Full Commission of the AIRC on 1 March 2002. It upheld the finding the applicant’s employment ceased on 16 March 1994. The AIRC therefore had no jurisdiction to entertain the application, as Part VIA of the WR Act, including s 170CE, commenced and applied only to terminations of employment occurring after 30 March 1994: see Industrial Relations Reform Act 1994 (Cth) and Workplace Relations and Other Legislation Amendment Act 1996 (Cth), Sch 7, item 17(1).

20. On 24 September 1999, the applicant commenced proceedings against the Superannuation Trustee by complaint dated 20 September 1999 to the Superannuation Complaints Tribunal.  Relevantly, his complaint was about the Superannuation Trustee’s decision of 9 June 1999 to reject his claim for a TPDB under the Fund, following his claim for such a benefit made by letters of 19 and 24 July 1999 (the apparent lack of sequence of those events is not explained) and its alleged failure to respond to his request that it review its decision.  The Superannuation Complaints Tribunal, on 23 November 2001, found it had no jurisdiction to deal with the complaint under the Superannuation (Resolution of Complaints) Act 1993 (Cth). It had notified the applicant of that position in earlier correspondence going back to 8 October 1999.

    THE MOTIONS

21. The Superannuation Trustee seeks an order that the Application be dismissed on the ground that the Court does not have jurisdiction to hear the claims against the Superannuation Trustee.  In the alternative, the Superannuation Trustee seeks orders that the Application be dismissed on the grounds that the Application discloses no reasonable cause of action against the Superannuation Trustee, that the proceedings are an abuse of the process of the Court, and that the proceedings against the Superannuation Trustee are frivolous and vexatious and have no chance of success.

22. The Employer contends that the applicant is estopped from prosecuting any action against it arising out of or in connection with his employment by reason of:

    ·    his agreement that any past and future claims he may have against the Employer would be the subject of a mediation;

    ·    his participation and conduct in the mediation held on 26 October 1998;

    ·    the execution of the Heads of Agreement on 27 October 1998, the terms of that agreement, the acceptance by the applicant of payments referred to in it, and his subsequent discontinuance on 9 November 1998 of the proceedings against the Employer in the AIRC commenced on 16 October 1998.  In the alternative, the Employer contends that the institution of the current proceedings is an abuse of the process of the Court, having regard to the terms of the Heads of Agreement.

23. It is convenient to consider first the question of whether the Court has jurisdiction to hear the proceedings against the Superannuation Trustee.

    JURISDICTION

24. The Superannuation Trustee contends that the Court has no jurisdiction to entertain the claim simply because it has no jurisdiction to grant to the applicant the relief claimed against it in the Application.

25. The Application identifies the foundations for invoking the Court’s jurisdiction as Part IV of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), the accrued jurisdiction, ss 298(1)(a), (b) and (c), 298L(1)(h), (l), (j) and (k), 298L(2)(a), (b) and (c) and 298U(b), (c) and (d) of the WR Act, and finally clause A.19 and section C of the Trust Deed and Rules.

26. It is obvious that the reference to Part IV of the FCA Act is erroneous. That Part deals with appeals from this Court to the High Court of Australia. It does not confer any original jurisdiction on the Court. I take the reference to be Part III of the FCA Act, which contains s 19. Section 19(1) provides that the Court has “such original jurisdiction as is vested in it by laws made by the Parliament”: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 161. In addition, where a matter is before the Court in accordance with its original jurisdiction, the Court has an accrued jurisdiction to entertain associated matters: Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 (Philip Morris); United States Surgical Corp v Hospital Products International Pty Ltd (1981) 148 CLR 457; Fencott v Muller (1983) 152 CLR 570 (Fencott).

1. The applicant has been unable to identify any enactment which vests in the Court original jurisdiction to entertain any of the applicant’s claims against the Superannuation Trustee. Senior counsel for the Superannuation Trustee submitted there is none. The Application does not seek to challenge the ruling of the Superannuation Complaints Tribunal under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth). Nor could the applicant’s present concerns fall within that provision.

2. Section 412 of the WR Act provides as follows:

   "The Court has jurisdiction with respect to matters arising under this Act in relation to which:

   a)Applications may be made to it under this Act; or

   b)actions may be brought in it under this Act; or

   c)questions may be referred to it under this Act; or

   d)appeals lie to it under section 422; or

   e)penalties may be sued for and recovered under this Act; or

   f)prosecutions may be instituted for offences against this Act."

   Section 298T enables an application to be made to the Court for orders under s 298U of the WR Act in respect of conduct in contravention of Part XA of that Act. The particular section of the WR Act identified by the applicant which is said to amount to an alleged contravention of the WR Act is s 298K(1). It relates to conduct of an employer. The Superannuation Trustee is not, and is not alleged to be, an employer of the applicant. Consequently, a jurisdictional fact upon which the Court might make orders against the Superannuation Trustee under s 298U does not exist.

3. Nor does the Court have jurisdiction to deal with the applicant’s claims against the Superannuation Trustee by reason of the existence or terms of the Trust Deed and Rules.  Jurisdiction cannot be conferred on the Court by agreement:  Re Wakim; Ex parte McNally (1999) 198 CLR 511. The Court has not been referred to any enactment by which it is given jurisdiction generally to adjudicate between members of a superannuation fund and the trustee of the fund.

4. Subject to consideration of whether the applicant’s claim against the Superannuation Trustee falls within the Court’s accrued jurisdiction, in my judgment the Application against the Superannuation Trustee does not invoke any jurisdiction of the Court, and must be dismissed.

5. The Employer accepts that the Court has jurisdiction to entertain the applicant’s claim against it. That must be under the WR Act. The Court has jurisdiction to entertain the applicant’s claim against the Superannuation Trustee if it arises out of “a common substratum of facts” with that upon which the claim against the Employer is made, so that there is in substance one controversy: Philip Morris at 512. To the extent to which the applicant’s claims against the Employer are made under the common law, they no doubt fall within the Court’s accrued jurisdiction. But the relationship between the claims against the Employer and the claims against the Superannuation Trustee is nowhere near as close, and the claims do not clearly arise out of the same substratum of facts. It is not necessary for the facts giving rise to the claims against the Superannuation Trustee and against the Employer to entirely coincide: see the consideration of Mason, Murphy Brennan and Deane JJ in Fencott at 602-610. But it is necessary that the claims are in essence part of the one justiciable controversy.

6. The claims against the Employer under s 298U(b), (c) and (d) of the WR Act, based upon alleged contraventions of s 298K because the proscribed conduct was for reasons prohibited by s 298L, relevantly involves:

   ·the existence of the relationship of employer and employee at the times in issue,

   ·conduct by the Employer affecting the applicant’s status or position as an employee, including the issue about the date the applicant ceased to be employed by the Employer,

   ·         the reasons for the Employer’s conduct, and

   ·if any of the contraventions are made out, factors as to whether the Court should make an order under s 298U.

7. In my judgment, the applicant’s claims against the Superannuation Trustee do not fall within the “matter” in which the Court has jurisdiction under the WR Act. The justiciable controversy between the applicant and the Employer is quite different from that between the applicant and the Superannuation Trustee. The orders which are available under the WR Act in the applicant’s claim against the Employer are distinct from those sought, and based upon different facts from those alleged, against the Superannuation Trustee. Any entitlement to such orders against the Employer would follow from a determination about when and why the applicant ceased to be employed. The claims against the Superannuation Trustee are of a different character. They depend upon the terms of the Trust Deed and Rules. In essence the claims are firstly that the applicant did not receive the benefits to which he was entitled under the Trust Deed and the Rules, whenever his employment was terminated, and secondly that the applicant became totally and permanently disabled in or from December 1997 in circumstances which, because he was then still employed by the Employer, he was entitled under the Trust Deed and the Rules to ongoing benefits for such a disability. The facts or issues common to his claims are the existence of the employment relationship, and its continuance up to 27 October 1998. There may also be an overlap to the extent that the Heads of Agreement may be relevant to the terms upon which any relief might be granted against the Superannuation Trustee. Otherwise, the legal basis for his claimed entitlements is different. The party said to be liable is different. The factual inquiries required by the Court in relation to the claim against the Superannuation Trustee involve a series of considerations different from those required in the claims against the Employer. It would be necessary to construe the Trust Deed and the Rules. It would be necessary to inquire into the nature and extent, and arguably the cause, of the applicant’s claimed disability. In my view, the claims and the issues to which the claims against the Superannuation Trustee and against the Employer give rise are disparate, and they are largely independent of each other. The claims against the Superannuation Trustee are clearly severable from the claims against the Employer. The factual background of the two claims is not so dependent on common transactions and facts that they can be said to arise out of a common substratum of facts.

8. French J in Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572 at [92] explained that determining the content of the Court’s accrued jurisdiction is an evaluative exercise, rather than a discretionary exercise. In this matter, for the reasons I have given, I have reached the view that the claims against the Superannuation Trustee are not so related to the claims against the Employer as to fall within its accrued jurisdiction.

9. Accordingly, I consider the Court does not have jurisdiction to entertain the applicant’s claims against the Superannuation Trustee, and his claims against it must be dismissed.

   THE CLAIM AGAINST THE EMPLOYER

10. The Court must be mindful that it should dismiss a claim under O 20 r 2(1) only in the clearest of cases:  Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Walton v Gardiner (1993) 177 CLR 378.

11. The Employer’s contentions in this matter are based in part upon the terms of the Heads of Agreement and the events leading up to the agreement it records. It contends that the applicant is estopped from asserting that his employment was terminated on 27 October 1998 by reason of its terms. It also contends that the issue as to the date of his employment ceasing was determined in the proceedings in the Court resulting in the judgment given on 16 October 1998 (in which the applicant alleged he had been dismissed in March 1994 and sought relief under s 170EA of the WR Act): Kowalski v Mitsubishi Motors Australia Ltd (1998) 88 FCR 55, and in the AIRC proceedings commenced on 23 November 1999, in which judgment was given on 20 November 2001, later affirmed on appeal on 1 March 2002. It contends, alternatively, the applicant’s claim must be dismissed either because it has no prospect of success or because it is an abuse of the process of the Court, because it is beyond dispute that the applicant’s employment with the Employer came to an end on 16 March 1994.

12. In my judgment the proceedings culminating in a judgment on 16 October 1998 do not give rise to any issue estoppel as between the applicant and the Employer about the date upon which his employment came to an end.  That is because following the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), the application was unsuccessful because the Court did not have jurisdiction at the time the application was made on 18 December 1997 to entertain the claim that he was wrongfully dismissed on 16 March 1994. Although the applicant asserted in that proceeding that he had been dismissed in March 1994, it was not in the event necessary for the Court to determine that question: cp Blair v Curran (1939) 62 CLR 464; Jackson v Goldsmith (1950) 81 CLR 446.

13. I am also not persuaded that the issue as to the date upon which the applicant’s employment with the Employer came to an end was decided in the AIRC proceedings in which judgment was given on 20 November 2001 so as to give rise to an issue estoppel that the employment ceased on 16 March 1994.  Although the Commissioner found as a fact that the employment relationship came to an end on 16 March 1994, he dismissed the application expressly on the basis that its maintenance was in breach of the Heads of Agreement.  The finding about the date of termination of the applicant’s employment was not legally indispensable to the ground upon which the application failed:  see Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290; Theo v Official Trustee in Bankruptcy (1996) 70 FCR 317.

14. However, in my view, such a finding was a foundation for the decision of the Full Commission of the AIRC of 1 March 2002 on appeal from that decision.  Its recital of the issues argued on the appeal indicate clearly the applicant argued the finding at first instance that he had been dismissed on 16 March 1994 was wrong, and that his employment continued until 27 October 1998.  The Full Commission found:

    “On our consideration of the materials and evidence before McCutcheon C and the Full Bench, McCutcheon C was correct in that the employment of the appellant came to an end on 16 March 1994.

    This finding is supported by the 16 March 1994 letter from a representative of the respondent to the applicant:

    ‘As you continue to be unfit for your normal duties with us, your contract of employment with the company is frustrated.  On that ground, your contract of employment with the company is now at an end, and accordingly you are no longer required to report for work.’

    In our view, the terms of the letter made it clear that the employment was at an end.  It is immaterial whether the termination occurred as a result of frustration or at the initiative of the employer.  The letter made it plain to the appellant that his employment was at an end and he was not required to report for work.
    …
    There is no doubt in our view that the employment ceased in March 1994, not October 1998, and the 16 March 1994 letter provides evidence that the date of termination was 16 March 1994.”

15. Consequently, the Full Commission concluded that the application itself was beyond the jurisdiction of the AIRC. That was because s 170CE of the WR Act (under which the application was brought), which was introduced by the Industrial Relations Reform Act 1994 (Cth) operative from 30 March 1994, was expressly said to apply to terminations of employment occurring only on or after 30 March 1994: Item 17(1) of Sch 7 to the Workplace Relations and Other Legislative Amendment Act 1996 (Cth).  The Full Commission did not therefore address the other reasoning of the Commissioner at first instance for refusing the application.

16. I observe that the AIRC is competently charged under the WR Act with giving a final judgments making an enforceable determination on such a matter. It has jurisdiction to finally decide rights as between employers and employees in proceedings under s 170CE of the WR Act, derived from the WR Act: see e.g. Administration of the Territory of Papua and New Guinea v Guba (1973) 130 CLR 353; Ex parte Amalgamated Engineering Union (Australian Section); Re Jackson (1937) 38 SR (NSW) 13. See also the discussion by Branson J in Miller v University of New South Wales [2002] FCA 882 at [68] – [77].

17. It follows, in my judgment, that the applicant is now estopped against the employer from asserting that his employment with the Employer ceased other than on 16 March 1994, and from asserting that his employment continued until 27 October 1998.

18. In addition, in my judgment, the applicant is clearly estopped by his conduct in entering into, and leading up to, the mediation agreement dated 26 October 1998 and by the terms of the Heads of Agreement from asserting that his employment with the Employer came to an end later than 16 March 1994.  The context in which the mediation took place, as noted earlier, was a proceeding in the AIRC in which he sought a remedy for his termination in March 1994.  The mediation agreement recognised his claim resulted from the termination of his employment.  It clearly refers to the termination he then alleged to have taken place in March 1994.  The settlement terms recorded in the Heads of Agreement involved the Employer paying a substantial sum to him to discharge any liability it might have had to the applicant in respect of that termination, as well as in respect of other potential or alleged sources of liability to the applicant.  It paid the agreed sum.

19. In those circumstances, the applicant’s conduct clearly induced the Employer to make a payment of money to him upon the basis that his employment with the Employer came to an end on 16 March 1994, and the Employer has made that payment upon that factual basis or assumption.  The legal relations of the parties were thus adjusted as reflected in the Heads of Agreement by that commonly understood state of affairs.  The applicant is therefore estopped from asserting a different state of affairs, namely that his employment with the Employer did not come to an end until 27 October 1998:  see e.g. Craine v Colonial Mutual Fire Insurance Co. Ltd (1920) 28 CLR 305; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. The applicant has not brought proceedings directly seeking to set aside the Heads of Agreement. Nor has he made any proposal to repay to the Employer the amount he received pursuant to the Heads of Agreement. It is likely, if he wished to have the Heads of Agreement set aside (assuming some proper ground for doing so could be made out) that it would be a condition of the setting aside that he reimburse the amounts he received under its terms. At present, it would in my view be unjust to permit the applicant to depart from the factual assumption about the date of the termination of his employment upon which the Heads of Agreement was entered into, and moneys paid under it; see Thompson v Palmer (1933) 49 CLR 507; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641.

20. The applicant has in fact sought to show in certain other proceedings that the Heads of Agreement were entered into in circumstances which should lead to its terms, or some of its terms, being set aside.  In proceedings in the Workers Compensation Tribunal (SA), he alleged that he should be permitted to pursue various claims for workers compensation under the Workers Rehabilitation and Compensation Act 1986 (SA) against the Employer, notwithstanding the Heads of Agreement. He alleged the Employer had not acted in good faith in entering into the Heads of Agreement, and that the Employer had also acted fraudulently and unconscionably in relation to the Heads of Agreement, and that the Employer had misrepresented significant matters relevant to him entering into the Heads of Agreement. None of those grounds was made out: see Kowalski v Mitsubishi Motors Australia Ltd [2001] SAWCT 93. I was informed by senior counsel for the Employer that the applicant had appealed from that decision. I am not aware of its outcome.

21. The applicant submitted at one point in his oral submissions that he wished to go behind the Heads of Agreement in this proceeding.  But no evidence was adduced which could go the smallest distance towards establishing a ground upon which the Heads of Agreement might be set aside, or (as the applicant confined himself) upon which clauses 2.1 and 2.3 of the Heads of Agreement might be set aside.  It is not therefore necessary to determine formally whether the decision of the Workers Compensation Tribunal (SA) on the matter gives rise to a further issue estoppel as between the applicant and the Employer.

22. I have accordingly reached the view that, on this Application, the applicant is estopped as against the Employer from asserting that his employment continued after 16 March 1994 and that it did not cease until he was “constructively” dismissed on 27 October 1998.

23. The claims of the applicant against the Employer must be those expressed as being under the identified provisions of the WR Act or at common law.

24. As noted above, s 298U of the WR Act empowers the Court to make orders against the Employer in certain circumstances. The applicant relies on s 298K and 298L as providing those circumstances. There is no material at all upon which the applicant could show that his dismissal from employment on 16 March 1994 was for any prohibited reason specified in s 298L. I am satisfied that he has no prospect of succeeding on such a claim. Moreover, and more significantly, Part XA of the WR Act including ss 298K, 298L and 298U was inserted into the WR Act by the Workplace Relations and Other Legislation Amendment Act: s 3 and Sch 15. The amendments took effect only after 25 November 1996. It does not apply with respect to the termination of the applicant’s employment on 16 March 1994. The applicant cannot rely upon its terms in this proceeding.

25. The applicant’s claim against the Employer at common law, in the face of the Heads of Agreement, has no prospect of success.  Any rights he may have had against the Employer arising from the termination of his employment on 16 March 1994 are expressed in the Heads of Agreement, or alternatively became converted into rights under the Heads of Agreement.  He has received the monies to which he was entitled under the Heads of Agreement.  The Heads of Agreement clearly record an agreement that any rights of the applicant against the Employer arising out of or in the course of his employment are to be satisfied by the payment of a lump sum.  It is “in full and final settlement” of his entitlements.  There is no room for any reading down of its terms.

26. Accordingly, I am persuaded the applicant has no prospect of success in his claim against the Employer.

27. I have not overlooked the oral submissions made by the applicant or the further evidentiary material he sought to adduce on the hearing of the motions.  The proposed evidentiary material comprised part of the transcript of the examination on 3 December 2001 of the claims manager of the Employer and of a manager of the WorkCover Corporation in proceedings in the District Court of South Australia, a letter from certain accountants to the applicant dated 5 March 1999, part of the transcript of submissions of senior counsel on behalf of the Employer in the proceedings in the Workers Compensation Tribunal (SA), letters from the Superannuation Complaints Tribunal to the applicant dated 7 November 2001 and 13 December 2001, a copy of a facsimile from the applicant to the Superannuation Complaints Tribunal dated 22 January 2002, and a copy of the written response of the Employer to certain submissions of the applicant in the proceedings in this Court resulting in the judgment given on 16 October 1998.  I received in evidence all but the letter from certain accountants dated 5 March 1999 but only to show the fact of those communications having occurred.  The material necessary to show the truth of the communications, and to the extent they were said to be in particular respects admissions of the Employer the authority to make those admissions was not adduced.

1. The applicant also contended that the Heads of Agreement are not enforceable because cl 4.1 “is a ‘Scott v Avery’ clause”.  It is not.  It is a term which, consistently with the other clauses of the Heads of Agreement, records the applicant’s agreement not to bring further proceedings against the Employer in respect of any claims arising out of or in the course of his employment.  It does not profess to oust the jurisdiction of the courts:  cp Burney v Burney [1956] SASR 171. It reflects the agreement that any right of the applicant against the Employer arising out of or in the course of his employment are submerged in, or expressed in, the Heads of Agreement. The Heads of Agreement does not itself contain a clause excluding the courts from adjudicating upon its terms. Scott v Avery (1856) 5 HL Cas 811 is not to the point. It recognised that an arbitration agreement which makes the award of an arbitration a condition precedent to any recourse to the Courts is not contrary to public policy.

2. The applicant placed considerable reliance upon the decision of Wootten J in Finch v Sayers [1976] 2 NSWLR 540. I do not consider that case advances the applicant’s position. It concerned the proper construction of a deed for a superannuation fund, and consideration of the circumstances in which a contract of employment was brought to an end. It does not touch upon whether this Court has jurisdiction to entertain the applicant’s claims against the Superannuation Trustee. It may touch upon the applicant’s claims against the Employer, or more particularly as to whether he has rights against the employer by reason of the circumstances in which his employment came to an end on 16 March 1994. But, as I have found, any such rights were subsumed into the rights which he obtained under the Heads of Agreement. The Employer does not contest the proposition that, arguably, the applicant may have had such rights. Its position, which I have concluded is in effect irresistible on the material before me, is that any such rights are now contained in the Heads of Agreement.

3. The balance of the applicant’s contentions against the Employer assert matters which, he contended, demonstrate that his employment with the Employer did not cease on 16 March 1994.  I have adverted briefly to certain of that material earlier in these reasons.  It is material which does not entitle the applicant to go behind the issue estoppel which I have concluded exists.  The material he refers to has, in various ways, been advanced in the proceedings recorded in the “Background” section of these reasons.  The determination of the Full Commission of the AIRC reviewed certain of that material.  The material to which the applicant has referred includes extensive reference to certain awards and industrial agreements which the applicant says bound the Employer, and which he further says were contravened by the Employer.  It is not necessary to see if those allegations are arguable.  That is because the applicant is estopped from claiming against the Employer that his employment did not come to an end on 16 March 1994.  If the termination of his employment at that time gave rise to any rights on his part, the evidence indicates that those rights were merged into the rights which he acquired under the Heads of Agreement.  In my view, those matters do not support any contention that he now has any additional rights against the Employer beyond those reflected in the Heads of Agreement.

   THE CLAIM AGAINST THE SUPERANNUATION TRUSTEE

4. In view of my decision that the Court has no jurisdiction to entertain the applicant’s claim against the Superannuation Trustee, I shall deal only briefly with the alternative attack of the Superannuation Trustee against the claims of the applicant under O 20 r 2 of the Rules.

5. The Superannuation Trustee is not a party to the AIRC proceedings which, I have concluded, give rise to an issue estoppel against the Employer.  Nor is it a party to the Heads of Agreement. 

6. It did pay to the applicant the amount of $64,691.43 payable under cl 2.1 of the Heads of Agreement. I note that payment is expressed to be “by way of ill health benefit being the entitlement with respect to the period from 7 March 1970 to the date of cessation of his employment”. On the proper construction of the Heads of Agreement, I have concluded that it is clear that the date of cessation of his employment is 16 March 1994. The Trust Deed and Rules are not in evidence. I am not able to conclude that it is beyond doubt that the applicant has no further entitlement to benefits under the Trust Deed and Rules simply by reason of cl 2.1 of the Heads of Agreement. However, I note that the applicant’s complaint to the Superannuation Complaints Tribunal, inter alia, about the level of benefits he received was withdrawn by the Tribunal as notified to the applicant on 23 November 2001 and that, the applicant has not brought any appeal from that decision under s 46(1) of the Superannuation (Resolution of Complaints) Act, and it appears plain that he could not now do so.

7. The complaint by the applicant to the Superannuation Complaints Tribunal of 24 September 1999, and his application to the AIRC on 23 November 1999, both involved the claim that the applicant’s employment with the Employer persisted until 27 October 1998.  The issues of fact and law the applicant raised, to that extent, overlap with issues of fact and law he now seeks to re-ventilate in this proceeding.  As noted, those issues were resolved adversely to the applicant.  The material which the applicant has identified as making out his claim against the Superannuation Trustee is essentially the same as that relied upon in those two proceedings.  The resolution of those issues in favour of the applicant, as he acknowledges, is fundamental to his present claims against the Superannuation Trustee succeeding.  In my judgment, the applicant is foredoomed to fail on those issues.  The relevance and weight of the applicant’s material, in the context of other material which the Superannuation Trustee and the Employer have identified, has been addressed not simply in those two proceedings but variously in the other proceedings to which I have referred.  It has uniformly been found not to lead to resolution of the issues in the way the applicant contends.  The applicant has not suggested, to my mind, any feature of his material or of the approaches to it by decision makers, which could expose any flaw in the respective processes of reasoning.  In the light of my conclusion on that score, I consider the claims against the Superannuation Trustee should in any event be dismissed under O 20 r 2 (1)(c) of the Rules:  see Walton v Gardiner at 393; Development Assessment Commission v Macag Holdings Pty Ltd (2001) 80 SASR 104.

8. Clauses 1 and 1.4 of the Heads of Agreement record the payment of $200,000 being a full and final settlement of any entitlements the applicant may have, inter alia, to superannuation and of any superannuation payable under the Trust Deed and Rules.  The payment of the sum provided for in cl 2.1 was then duly paid by the Superannuation Trustee.  It formed part of the $200,000 payment.

9. Senior counsel for the Superannuation Trustee contended that the Superannuation Trustee, although not privy to the Heads of Agreement, could take the benefit of those provisions by two alternative routes.  First, he contended that it constituted part of a separate agreement relevantly in the same terms between the applicant and the Superannuation Trustee, entered into when the applicant indicated a preparedness to accept from the Superannuation Trustee the payment provided for by cl 2.1 of the Heads of Agreement and the Superannuation Trustee agreed to make the payment on the basis of the general terms of the Heads of Agreement.  Alternatively, he contended the applicant by accepting the payment provided for by cl 2.1 of the Heads of Agreement, represented a preparedness to accept it upon the terms in the Heads of Agreement and the Superannuation Trustee agreed to make the payment on that basis.

10. Consequently, it was argued, the applicant is estopped by his conduct from asserting that there are any facts which might give rise to any further claims against the Superannuation Trustee under the Trust Deed and Rules.  There may be considerable merit in those contentions.  I am not, however, satisfied that they are so clearly made out on the material before me on the motion that it is appropriate to summarily dismiss the applicant’s claims against the Superannuation Trustee on either of those grounds.

11. I note the general allegation by the applicant of some form of conspiracy between the Superannuation Trustee and the Employer to prevent the applicant from receiving the benefits to which he claims to be entitled under the Mitsubishi Motors Australia Limited (Supervisory and Technical Employees) Award 1987, The Mitsubishi Motors Australia Limited (Enterprise Agreement) 1993, and the Trust Deed and Rules.  No facts are identified or pleaded upon which any conspiracy could be made out.  Nor could the Superannuation Trustee be directly liable to the applicant for any amounts under either the award or the enterprise agreement.  I have dealt with the possibility of the Superannuation Trustee being liable to the applicant under the Trust Deed and Rules above.  In my judgment, the general allegation of a conspiracy does not enhance the applicant’s position in any way.

    ORDERS

12. Following the hearing, the applicant notified the Court (and solicitors for the Superannuation Trustee and for the Employer) that he proposed to apply to the High Court for special leave to appeal from the decision of the Full Commission of the AIRC given on 1 March 2002.  He requested that judgment not be given on the two motions until the High Court had dealt with his application.  So far as I am aware, he has not obtained special leave to appeal from that decision.  A search of the judgments and of the transcript of the High Court during 2002 does not disclose that any such application has been entertained, or granted.  I consider it is appropriate in the circumstances to proceed to deal with the motions at this point in time.

13. For the reasons given, I order that the Application against each of the Superannuation Trustee and against the Employer be dismissed.  I see no reason why the normal order as to costs should not follow.  I also order that the applicant pay the costs of the Superannuation Trustee and the costs of the Employer of the proceedings.

I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate:

Dated:             17 September 2002

Counsel for the Applicant:	The applicant appeared in person.
Counsel for the First Respondent:	Mr D Clayton QC
Solicitor for the First Respondent:	Thomson Playford
Counsel for the Second Respondent	Ms R Layton QC with Mr R Bonig
Solicitor for the Second Respondent:	Fountain & Bonig
Date of Hearing:	5 February 2002
Date of Judgment:	17 September 2002