Lacherdis v Huynh
[2021] FedCFamC2G 143
•15 October 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)Lacherdis v Huynh [2021] FedCFamC2G 143
File number: SYG 1092 of 2021 Judgment of: JUDGE CAMERON Date of judgment: 15 October 2021 Catchwords: PRACTICE & PROCEDURE – Summary dismissal – relevant considerations. Legislation: Fair Work Act 2009 (Cth), ss 51, 52, 340, 345,
Federal Circuit Court of Australia Act 1999 (Cth), s 17A
Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 8, 10, 143
Federal Court of Australia Act 1976 (Cth), s 31A
Federal Circuit Court Rules 2001 (Cth), r 13.10
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), r 13.13, item 14, sch.1
Federal Court Rules 2011 (Cth), r 16.21
Cases cited: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Dey v Victorian Railway Commissioners (1949) 78 CLR 62
Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920
J & A Vaughan Super Pty Ltd (Trustee) v Becton Property Group Limited [2014] FCA 581
Spencer v Commonwealth (2010) 241 CLR 118
Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1
Division: Division 2 General Federal Law Number of paragraphs: 33 Date of hearing: 28 September 2021 Counsel for the Applicant: The applicant appeared in person Solicitor for the Respondent: Mr J. Hor (People + Culture Strategies) ORDERS
SYG 1092 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: PETER LACHERDIS
Applicant
AND: WILLIAM HUYNH
Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
15 OCTOBER 2021
THE COURT ORDERS THAT:
1.The proceeding be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
INTRODUCTION
The applicant commenced this proceeding by an application filed on 17 June 2021 which was supported by his affidavit sworn or affirmed 22 April 2021. The applicant sets out his claims against the respondent in a statement of claim annexed to his affidavit. Those claims are based on alleged contraventions of the applicant’s terms and conditions of employment found in the Mercer Administration Services Enterprise Agreement 2019 (“EA”), misrepresentations as to the applicant’s workplace rights contrary to s.345 of the Fair Work Act 2009 (Cth) (“FW Act”) and adverse action taken against the applicant contrary to s.340 of the FW Act. The respondent is the applicant’s manager and they are both employed by Mercer (Australia) Pty Ltd (“Mercer”).
The matter has come before the Court at this point for consideration of the respondent’s interlocutory application filed on 16 August 2021 seeking summary dismissal of the proceeding pursuant to s.17A(2) of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”) and r.13.10 of the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”) or alternatively an order striking out the application.
STATEMENT OF CLAIM
The applicant’s claims were not expressed as clearly as they might have been. Drawing largely on the summary of them set out in the respondent’s written submissions, they may be described as follows:
(a)the respondent breached his obligations to the applicant under the EA by:
(i)excluding the applicant from participation in a salary review in accordance with the EA;
(ii)failing to provide the applicant with a minimum salary increase that the applicant was entitled to receive under the EA;
(iii)making salary payments to the applicant on a monthly basis, instead of on a fortnightly basis in accordance with the EA;
(iv)failing to pay the applicant for overtime worked by the applicant in accordance with the EA;
(v)failing, through the respondent’s own manager Ms Peterson, to respond to a letter of demand;
(vi)failing to provide the applicant rest breaks in accordance with the EA; and
(vi)failing to consult with the applicant in relation to a major business restructure which was implemented on or around 4 December 2020;
(“EA Claim”)
(b)the respondent breached s.345(1) of the FW Act by making misleading representations in connection with the applicant’s workplace rights in that he:
(i)failed to provide the applicant with requested employee records;
(ii)provided the applicant with a compensation statement which lacked important details;
(iii)failed to respond to the applicant’s requests for information regarding the terminology of his payslip and his sick leave entitlements; and
(iv)advised the applicant that salary increases were discretionary and that the EA did not apply to the applicant’s employment with his employer Mercer (Australia) Pty Ltd (“Mercer”);
(“s.345 Claim”)
(c)the respondent breached s.340 of the FW Act, in that he:
(i)failed to provide the applicant with a salary increase in accordance with the EA because the applicant had exercised a workplace right;
(ii)is attempting to terminate the applicant’s employment as “a result of … repeated attempts to organise a Zoom meeting with senior HR staff and other Senior Leaders”; and
(iii)has pressured the applicant to complete work unnecessarily.
(“GP Claim”)
The applicant sought the following relief by way of civil penalties, compensation and other orders:
I am therefore requesting a court order be made to the defendant to pay me the sum of $1,409,600 and conduct an Annual Salary Review. I seek a court order to the defendant to refrain from termination of my employment as a result of raising queries to him about my pay and entitlements. I seek a court order to the defendant to comply with all terms of the Enterprise Agreement and refrain from further contravention of Enterprise Agreement terms.
Before leaving this aspect of these reasons, I note that the respondent characterised much of what I have classified as the s.345 Claim as an allegation of breach of the National Employment Standards (“NES”). I do not agree with that characterisation as the statement of claim made no reference to provisions of the NES and did not allege contraventions of it, focussing instead on the EA and conduct said to relate to or contravene that instrument.
RELEVANT LAW
Summary dismissal, striking pleadings out
Since the interlocutory application was filed the Court has been renamed the Federal Circuit and Family Court of Australia (Division 2): ss.8(2), 10 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”), and the FCCA Act has been repealed and replaced with, relevantly, ch.4 of the FCFCOA Act. Section 143 of the FCFCOA Act is not relevantly different from s.17A of the FCCA Act and, as far as is material, provides:
143 Summary judgment
…
(2)The Federal Circuit and Family Court of Australia (Division 2) may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
The FCC Rules have been also repealed and have been replaced with the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (“FCFCOADiv2 GFL Rules”). Rule 13.13 of the FCFCOADiv2 GFL Rules is not different from r.13.10 of the FCC Rules and provides:
13.13 Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b)the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of the process of the Court.
By item 14 of sch.1 to the FCFCOADiv2 GFL Rules, r.16.21 of the Federal Court Rules 2011 (Cth) is adopted for use in this Court, that is to say in the court now known as the Federal Circuit and Family Court of Australia (Division 2), but not in another court called the Federal Circuit and Family Court of Australia (Division 1). Rule 16.21 provides:
16.21 Application to strike out pleadings
(1)A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:
(a) contains scandalous material; or
(b) contains frivolous or vexatious material; or
(c) is evasive or ambiguous; or
(d) is likely to cause prejudice, embarrassment or delay in the proceeding; or
(e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f) is otherwise an abuse of the process of the Court.
(2)A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court.
An application to strike some or all of a pleading out is concerned with the adequacy of the pleading as a matter of law in that, assuming the truth of the allegations it makes and drawing all inferences in favour of the non-moving party, the Court must decide whether the pleading discloses a reasonable cause of action. The question is whether the allegation(s), even if proved, cannot succeed as a matter of law: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. Further, an action will not be dismissed as frivolous or vexatious and an abuse of process if there is to be determined a real question of fact or law on which the rights of the parties depend: Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91 per Dixon J.
An application for summary dismissal under r.13.13 is concerned with the substance of the claim, not with the form in which it is pleaded. The Court is concerned with whether the case raises a real or genuine dispute as to any material fact that might reasonably be resolved in the applicant’s favour: cf Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920 at [4]-[6]; J & A Vaughan Super Pty Ltd (Trustee) v Becton Property Group Limited [2014] FCA 581 at [6].
The operation of provisions such as s.143 of the FCFCOA Act, principally the analogous provision in the Federal Court of Australia Act 1976 (Cth), s.31A, has been discussed in several cases, most significantly in Spencer v Commonwealth (2010) 241 CLR 118. In that case, the plurality in the High Court held that no paraphrase of the expression “no reasonable prospect” can be adopted as sufficient explanation of its operation, let alone as a definition of its content, saying:
… full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. (per Hayne, Crennan, Kiefel and Bell JJ at 141 [60])
Their Honours were of the view that the elucidation of the term would best proceed by decided cases giving it content over time, noting that it was already apparent that authorities such as General Steel could not be relied on to define the scope of the term. In a separate decision, French CJ and Gummow J identified circumstances in which a finding that a case lacked reasonable prospects of success would not reasonably be available. Their Honours said:
Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.
Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact. (at 132 [25]-[26])
Their Honours were referring to the speech of Lord Hope in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 where, when considering a provision similar to s.17A, his Lordship said:
… it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf MR said in Swain v Hillman [[2001] 1 All ER 91] at 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all. (at 261 [95])
In J & A Vaughan Super v Becton Property Group at [6]-[7], Pagone J summarised principles relevant to the application of a provision such as s.143 as:
a)the court is concerned with substance and not form or deficiencies in pleadings;
b)the enactment of the section lowered the bar for obtaining summary judgment and permits summary judgment where an applicant fails to identify a valid claim on the material before the court;
c)caution must be exercised before concluding that a claim lacks reasonable prospects of success, especially where evidence can give colour and content to allegations which are best left to be heard and determined at trial;
d)the court does not conduct fact finding but must assess the strength of the allegations made by reference to the pleadings, affidavits and any other evidence adduced, in order to determine whether the claim is sufficiently strong to warrant a trial;
e)in assessing whether there are reasonable prospects of success, the court should draw all reasonable inferences in favour of the party whose pleading or action in question; and
f)as the section requires in effect a prediction as to the outcome of a claim, the court should be more reluctant to summarily dismiss a claim where real questions of fact and credit arise. In those cases, the court will not have all material evidence before it until trial, the credit of important witnesses will not have been tested and it will as a consequence be very difficult if not impossible to fairly assess the prospects of the claim.
Fair Work Act
Section 51 of the FW Act provides:
51 The significance of an enterprise agreement applying to a person
(1)An enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person.
(2)An enterprise agreement does not give a person an entitlement unless the agreement applies to the person.
Section 52 of the FW Act relevantly provides:
52 When an enterprise agreement applies to an employer, employee or employee organisation
When an enterprise agreement applies to an employee, employer or organisation
(1)An enterprise agreement applies to an employee, employer or employee organisation if:
(a) the agreement is in operation; and
(b) the agreement covers the employee, employer or organisation; and
(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.
…
EVIDENCE
The applicant
In addition to the statement of claim, the applicant’s affidavit annexed a number of other documents, namely:
(a)an email to the respondent dated 31 March 2021 entitled “Letter of demand-debt” claiming unpaid salary and referring, amongst other things, to the EA;
(b)a Mercer email to the applicant dated 17 November 2020 inviting him to prepare for an end of year review;
(c)a letter from Mercer to the applicant dated 9 April 2021 recording his unwillingness to participate in the end of year review and advising him of Mercer’s assessment of how he had performed in various performance categories;
(d)a “Compensation Statement” for 2020-2021 recording the applicant’s salary for that financial year and the preceding year. It also said in connection with “Benefits”:
In addition to providing a competitive compensation package, MMC offers a variety of employee benefit packages to colleagues and their families. Depending upon your business and location, you may be eligible for a wide range of coverage, such as competitive health and welfare plans, annual paid time off, a pension or retirement plan and life insurance programs;
(e)emails passing between the applicant and Mercer staff, including the respondent, touching on salary reviews, rest breaks and workload and including an email from the respondent which relevantly said:
As stated in our employment contracts all merit increases are at the discretion of the organisation. The Mercer Services Agreement does not apply to you as this covers a section of the employees employed in Wollongong.
I have already scheduled our weekly one on one meetings with all of my reports, and I am happy to further discuss this with you at our next one on one.
The respondent
The respondent filed an affidavit affirmed on 13 August 2021, which has been treated as a statement as it was not witnessed, in which he deposed that he is employed by Mercer as a practice manager and is not a Mercer shareholder or a member of its senior leadership team. He reports to Mercer’s Financial Advice Leader, Ms Peterson, is authorised to make decisions with respect to the staff who report directly to him, including the applicant, but is required to consult with Mercer's Human Resources department if he proposes to make a decision that may materially impact the employment of those staff. He deposed that he communicated to the applicant about his workplace rights to the best of his knowledge and belief and had never knowingly or recklessly made a false or misleading representation to him about a workplace right or the exercise, or the effect of the exercise, of a workplace right. In relation to the applicant’s concerns about the future of his employment, the respondent deposed:
18. With respect to paragraph 4 of the Statement of Claim, I:
(a)have not taken steps to terminate Mr Lacherdis' employment unlawfully or at all;
(b)do not have the authority to make any unilateral decision to terminate Mr Lacherdis' employment; and
(c)have not pressured Mr Lacherdis to complete work unnecessarily nor conspired with others to do so.
Ms Peterson
In an affidavit dated 13 August 2021, which was also treated as a statement as it was not witnessed, Ms Petersen relevantly deposed that the applicant is employed by Mercer and that the EA to which he refers applies to persons employed by a different company in the Mercer group, namely Mercer Administration Services (Australia) Pty Ltd (“Mercer Administration Services”). She also deposed that the respondent is the applicant’s manager, not his employer. Annexed to Ms Peterson’s affidavit was:
(a)a letter of offer of employment addressed to the applicant and dated 15 August 2019 which relevantly said:
I am pleased to be able to make you an offer to join Mercer (Australia) Pty Ltd (“Mercer”) in the role of Data Collection – Client Service Officer as level D in the Mercer Financial Advice business group. The position will be based in the Melbourne office, reporting to … We would be pleased if you are able to commence on 2 September 2019 …
(b)the EA which relevantly stated:
4. DEFINITIONS AND INTERPRETATION
4.1In this Enterprise Agreement, unless the contrary intention appears and where the term is otherwise not defined already:
…
(f)Mercer means Mercer Administration Services (Australia) Pty Ltd.
…
5. COVERAGE
5.1 This Enterprise Agreement applies to:
(a) Mercer;
(b) employees of Mercer:
(i)working in the city of Wollongong, New South Wales; and
(ii)whose work is covered by the classifications contained within this Enterprise Agreement as set out in Schedules A and B; and
(c) the CPSU;
Other parts of the EA referred to “Consultation regarding major workplace change”, “Annual salary review”, “rest breaks”, “Overtime and penalty rates”, classifications and salary ranges;
(c) a letter from the respondent’s solicitors to the applicant dated 27 July 2021 contending that this action is misconceived and lacks reasonable prospects of success; and
(d)a letter from Mercer to the respondent dated 17 December 2015 offering him employment.
Ms Peterson also deposed that the applicant’s job is based at Mercer’s premises in Sydney, although he has been working from his Sydney home since March 2020, when Mercer implemented a remote working policy in response to the COVID crisis.
DISCUSSION
The EA Claim
The applicant would only have a claim based on the EA if he was a party to it or otherwise covered by it: ss.51 and 52 of the FW Act. The evidence indicates clearly that neither of those preconditions is satisfied. The respondent has led evidence, that has not been contradicted by evidence led by the applicant, which demonstrates that the EA relevantly applied to employees of Mercer Administration Services and to only those of that cohort who worked in Wollongong. The respondent’s evidence of the applicant’s employment contract also shows that the applicant is employed by Mercer, not Mercer Administration Services, and that he works in Sydney not Wollongong.
Moreover, the applicant has brought this proceeding against a person who, on the evidence, is not a party to the EA and so cannot be sued on it.
For those reasons, the claim based on the EA is misconceived and lacks any prospect of success.
The s.345 Claim
Although in some circumstances silence might amount to a representation that was misleading, no such circumstances have been asserted in this case. Therefore, none of the alleged failures to provide information amounted, in the circumstances, to a false or misleading representation.
Further, it seems to be implied that a refusal by Mercer and its employees to acknowledge that the EA applied to the applicant amounted in some way to misleading conduct. However, as I have found, the EA did not cover the applicant and so that failure or refusal did not misrepresent the situation. This misunderstanding by the applicant of the terms and conditions of his employment also informs his allegation that the respondent’s advice to him, that salary increases were discretionary and that the EA did not apply to his employment with Mercer, was misleading. That contention was misconceived.
The applicant also alleges in his statement of claim that the “Compensation Statement” amounted to an “intentional misleading representation made by the respondent about [his] workplace rights” but gives no indication of how the document was misleading, other than saying that it lacked important details. Absent any particularisation of the manner in which the statement is said to have been misleading it must be presumed, given the applicant’s belief that the EA applied to him, that his complaint is that the statement did not refer to EA entitlements. For the reasons already given, the statement’s lack of reference to the EA was not erroneous.
But in any event, the “Compensation Statement” did not purport to be an exhaustive statement of the applicant’s workplace rights or entitlements, as the passage quoted from it earlier in these reasons makes clear, and so it did not purport to represent that entitlements not expressly mentioned were not appurtenant to the applicant’s employment. It was therefore not misleading for having misrepresented the unavailability of such perquisites.
For these reasons the s.345 Claim, in its various particulars, has no reasonable prospects of success.
The GP Claim
The first element of the GP Claim is an allegation that the applicant had been denied a pay increase in accordance with the EA because he had exercised a workplace right. As the EA did not cover the applicant’s employment he had no entitlements under it. Consequently, the denial or unavailability of EA-based entitlements was not adverse action.
If the other particular of the allegation, that the respondent wished to dismiss the applicant, had identified any injury to the applicant in his employment or prejudicial alteration of his position as an employee then there might have been an arguable general protections claim. However, no such allegation is made.
The applicant also alleges that he has been pressured to complete work unnecessarily, causing stress and anxiety. However, he has not identified what provision of the FW Act provides him with a general protections cause of action, presumably based on stress and anxiety being an injury to him in his employment or a prejudicial alteration of his position as an employee, against the respondent as a principal. In the absence of such a provision being identified, I am not persuaded that such a cause of action exists.
For these reasons the GP Claim has no reasonable prospects of success.
CONCLUSION
I find that none of the allegations made by the applicant in his statement of claim have reasonable prospects of success. It is not necessary therefore to consider the respondent’s alternative prayer that the statement of claim be struck out.
The proceeding will be dismissed.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Dated: 15 October 2021