Lanyon, Genevieve v Billiecart Clothing Pty Ltd

[1998] FCA 62

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VI 1346 of 1997

BETWEEN:	GENEVIEVE LANYON APPLICANT
AND:	BILLIECART CLOTHING PTY LTD RESPONDENT

COURT:	NORTHROP J
DATE:	6 FEBRUARY 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

This is a motion brought by the respondent seeking an order under O 20 r 2 of the Federal Court Rules that the application be struck out or stayed on the ground of it being an abuse of process of the court. The essence of the matter is this: the applicant has commenced proceedings in this Court under ss 127A and 127B of the Workplace Relations Act 1996 in relation to relief which can be granted to her, if she establishes she is an independent contractor, in relation to the contract for services being reviewed by the Court.

The independent contractor concept, a contract for services, is not unusual and in her claim she pleads that she was engaged under a contract for services, namely as an independent contractor.  The formal documents, the defence by the respondent, admits that she was at all relevant times employed under a contract for services and therefore is an independent contractor.  Normally the trial of the application would have proceeded on that basis and the substantive issues would have been determined by the court in due course in the normal way.  The question of whether she was in fact an independent contractor or not would not have been an issue at the hearing.

Subsequently the applicant filed her on own petition in bankruptcy, a debtor's petition under s 55 of the Bankruptcy Act 1966. In accordance with the requirements of s 55 and the regulations, she filed with the Official Receiver a document, being a statement of affairs, a document which in its form contains a declaration “......so far as I am aware, the particulars set out in the statement are correct.” This is not a statement of declaration on oath. It does not need to be on oath but it is said that there are statements in that statement of affairs which suggest that she claims to be an employee. It is said that this is inconsistent with the claim in the application, a claim which was admitted and, at the present stage, is still being admitted by the respondent.

The respondent contends that to allow this action to proceed with the inconsistent statement set out in a document which is available to the public generally would constitute an abuse of process and therefore the application should be dismissed or stayed.  In support of the contention reference was made to Sea Culture International Pty Ltd v Scoles & Others (1991) 32 FCR 275 where at p 279 to 280 French J makes some comments by way of dicta which would, on the face of it, tend to support the submission made on behalf of the respondent in this case. In my opinion that dicta has no application to the facts of this case. In any event, there may be problems associated with it, having regard to the principles of law that a pleading not verified by affidavit cannot be used as an admission in other proceedings. I refer to what was said in Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (1993) 43 FCR 510 at 521-522. See also Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 per Mason CJ and Brennan J at 84-86. No reference is made by French J to that line of authority but, in any event, here there is no affidavit or statutory declaration sworn by applicant which gives rise to the confusion, if any, or inconsistency, if any. It is not for me to determine in these proceedings whether there is any such inconsistency.

The authorities relating to the application of O 20 r 2 of the Federal Court Rules are very clear and very strong.  They are set out by Sir Garfield Barwick in the case of General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. In that judgment the Chief Justice referred to many other authorities, including that of Sir Owen Dixon in Dey v Victorian Railways Commissioner (1949) 78 CLR 62 and many other cases. It is quite clear that the court will only exercise its power of preventing a litigant from proceeding with the normal hearing of a case in extreme cases when, on consideration of all relevant material the case being made is bad beyond measure, completely hopeless and there is no basis for success at all.

In the General Steel case the issue arose as to the proper construction and application of a written document. In those circumstances the Chief Justice said the mere fact that lengthy legal argument was necessary to understand the issues would not prevent the Court from determining the matter, namely whether there was a claim which should be struck out or not.  Prima facie if there is any question of fact in dispute, that of itself is sufficient to prevent an application being struck out on a basis of O 20 r 2 of the Federal Court Rules.

In the present case, on any view, the issue of whether Mrs Lanyon was an independent contractor or an employee could well depend upon disputed questions of fact, but at the moment there is no dispute about that issue.  For the purposes of the application in this court it is accepted that she is an independent contractor.  As far as what appears to be or may be inconsistent statements made by her in the public document, being the statement of affairs filed with her debtor’s petition, that again would involve a determination of disputed questions of fact, whether she used the words as a final conclusion of fact and law or not.  In my view, this cannot be used to support a contention that here there is an abuse of process of the court.

It is also suggested that a subsequent affidavit which has been filed after the election by the trustee in bankruptcy to continue this action has been made is relevant on this issue.  The affidavit of the solicitor suggests that at the relevant time Mrs Lanyon was an employee.  Of necessity this is a question of fact and law.  It is not for the solicitor to make a final conclusion on that.  It cannot be used against the applicant and, in my view, cannot be used as supporting an argument or contention that this constitutes an abuse of process of the court.  It may well be that in due course the respondent might want to amend its defence to deny that Mrs Lanyon was an independent contractor.  That is something that would need to be determined if the matter is raised.

In the meantime, in my opinion, and applying the general principles referred to above, this is not a case where the court should exercise its extreme power of preventing an applicant from proceeding with a case on the basis of an abuse of process, particularly when the issue on which the jurisdiction of this court is based has been admitted and is still admitted.  Accordingly the motion by the respondent is refused.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice R M Northrop

Associate:

Dated:            6 February 1998

Counsel for the Applicant:	Mr Mark Klemens
Solicitor for the Applicant:	Messrs Baker & Johnson
Counsel for the Respondent:	Mr Brian Lacy
Solicitor for the Respondent:	Russell Kennedy
Date of Hearing:	6 February 1998
Date of Judgment:	6 February 1998